I was cheerfully minding my own business, on the 6:53 into Paddington this morning, when I was startled into alertness by the following quote on Gordon Brown. This was buried within an article by Dr Gary North, a regular columnist on Lew Rockwell’s web site, entitled Why Gold is Rising.
Here’s the quote:
The Legacy of Gordon Brown
When Gordon Brown, as the Chancellor of the Exchequer for Great Britain, sold off half of the bank of England’s supply of gold in the late 1990s and early years of this century, he provided an enormous subsidy to those of us do not trust paper money. He in effect subsidized those of us who are gold bugs. I certainly am very grateful for Mr. Brown for being a Keynesian idiot, and also a Keynesian idiot in a position to implement his idiocy by selling off half of the gold of Great Britain. He certainly did me a great favor, and did a great favor to my subscribers who bought gold under $300 an ounce.
We have not seen any other national figure equally ignorant of economics, equally committed to Keynesianism, and equally powerful. Gordon Brown was unique in the late 20th century. It would be hard to find any other political figure who cost his government more money in forfeited assets in peacetime than Gordon Brown.
We should not expect to see any national political figure as economically ignorant as Gordon Brown. It is unlikely that any of them wants to wind up as Gordon Brown did. No politician wants to run for national office after having sold half of his nation’s gold reserves at the bottom of the market two decades after the peak. In the history of finance, no other decision-maker at the senior level matched what Gordon Brown did. Nobody lost that much money on the basis of setting a single policy that backfired more loudly than he did.
Because of this, we should not expect to see governments and central banks selling off large quantities of gold in order to depress the price. Brown did it for ideological reasons, for he took seriously the words of Keynes, namely, that gold is a barbarous relic. Gordon Brown is now a political relic. Other politicians are not interested in matching his legacy.
There is much else in the piece that makes it worth reading, but I think this particular quote is worth its weight in a certain elementary metal.
Personally, I am still waiting for Gordon Brown to apologise for this grievous error. Obviously, he won’t, even when he becomes head of the IMF and starts making similarly stupid mistakes with global gold reserves rather than merely British ones.
However, I always try to live in hope.