Forbes Chairman Advocates Gold Standard

Steve Forbes, Forbes magazine’s chairman and editor-in-chief, is concerned about the erosion of the U.S. dollar through artificially low interest rates and enslavement to the fiat currency system, …

Steve Forbes, Forbes magazine’s chairman and editor-in-chief, is concerned about the erosion of the U.S. dollar through artificially low interest rates and enslavement to the fiat currency system, and he has an idea of how to turn things around. He advocates a revised gold standard that pegs the dollar to a set value for gold ($1,500 per ounce), then allowing the Federal Reserve to raise or lower rates based on the dollar’s performance against that price. The U.S. has utilized the gold standard in the past, but now there are trillions of dollars in circulation and the country faces a mountain of debt, which Forbes argues is a sign to take action rather than remain mired in old ways. For more on this continue reading the following article from TheStreet.

"No one would say the dollar is strong today, all currencies are weak," says Steve Forbes, Chairman and editor-in-chief of Forbes Media.

Forbes has been a long-time proponent of a strong U.S. dollar. "When you do harm to your currency, when you keep interest rates artificially low, which is a way of subsidizing government debt, it hurts small businesses." Although the U.S. Dollar Index has only fallen .6% during President Obama’s tenure at the White House, Forbes says high gold prices are saying something different about the currency, "fluctuating between $1,500-$1,900 an ounce, that is hardly a vote of confidence."

Gold tends to move inversely to the U.S. dollar with the main reason being that a lack of confidence in the paper currency leads people into gold, as a hard asset. Gold becomes physical property and helps to anchor wealth.

Claim up to $26,000 per W2 Employee

  • Billions of dollars in funding available
  • Funds are available to U.S. Businesses NOW
  • This is not a loan. These tax credits do not need to be repaid
The ERC Program is currently open, but has been amended in the past. We recommend you claim yours before anything changes.

Forbes believes that a stable dollar is key to a sustainable economic recovery. "Imagine if we floated the hours. It’s 60 minutes an hour one day then 80 the next then 20 the next. You would soon have to have hedges and derivatives to figure out how many hours you are working each day."

Forbes’ solution is to use gold in his own version of the gold standard. A "true" gold standard where every U.S. dollar in circulation is backed by gold is literally impossible. The amount of money in circulation is $9.6 trillion, that’s counting cash, deposits, traveler’s checks, savings and money market deposits. The amount of gold the U.S. holds using a $1,650 gold price is $429 billion. So a true gold standard would require the gold price to hit $5,000 and that the government takes $8 trillion dollars out of circulation or we buy all the bullion in the world, 82,500 tons which would still only equal $4.4 trillion, and cut our money supply in half.

Forbes wants to set the U.S. dollar to a fixed rate in gold, say $1,500, when the price rises above that level the Federal Reserve must raise rates and when it falls below the Fed can loosen monetary policy. "If you can read a speedometer, you can do the gold standard." Forbes said it would take a few months for the economy to transition but it would create "a steady measure of value for the dollar."

Forbes says citizens should be free to carry gold and silver around in their pocket, pay for goods and/or exchange their dollars for gold with the Federal Reserve but that such drastic actions wouldn’t be necessary just knowing the dollar price was fixed in a small price range would be all that is needed.

The U.S. has been on a gold standard several times with the most recent being the Bretton Woods system between 1945-1971. During that time there were limited banking crises as world currencies were linked to the dollar, which was linked to gold, but the U.S. economy faltered during the Vietnam War. The U.S. didn’t have enough money to pay for the war and President Nixon dissolved the gold standard in 1971 in favor of floating currency rates and the possibility of creating more cash.

The U.S. has, since then, adopted a more Keynesian approach, that pumping money into the economy will stave off recessions. The U.S. government is butting up against its debt ceiling, with the national debt topping $15 trillion, and is having to content with a $1.3 trillion deficit, which makes it even more urgent to take action. "Don’t try to recreate the past," says Forbes, "what you do is you try to stop the bleeding."

This article was republished with permission from TheStreet.


Does Your Small Business Qualify?

Claim Up to $26K Per Employee

Don't Wait. Program Expires Soon.

Click Here

Share This:

In this article