Steve Forbes Warns Of Economic "Catastrophe" Due To Fed’s Dollar Debasement

GoldCore's picture

Today’s AM fix was USD 1,262.50, EUR 932.63 and GBP 751.76 per ounce.

Yesterday’s AM fix was USD 1,253.50, EUR 924.62 and GBP 746.22 per ounce.

Gold ended with a gain of just 0.016% to close at $1,261/oz today. Silver ended with a loss of 0.1% at $19.21/oz.

Gold and silver rose strongly yesterday on short covering and speculation that Indian demand is picking up.

Prime Minister Narendra Modi's new government has signalled a loosening of gold import rules and this morning India’s Trade Secretary said that India needs to rationalise import duties on gold bullion. Gold may also have been bid higher due to concerns about commodity financing deals in China.

Gold held near the highest in almost two weeks and palladium traded near over a three-year high at $852 per ounce. Palladium has surged 19% this year due to concerns regarding Russian supply and continuing, significant industrial unrest in South Africa, the second-largest producer after Russia. Labour talks ended acrimoniously again two days ago in South Africa.

The global gold price setting benchmark or "fix" is open to manipulation, said the head of the London Metal Exchange (LME), which is competing to offer an alternative to the silver fix when the system is disbanded in August.

Gold in U.S. Dollars - 1 Year (Thomson Reuters)

Fed’s Dollar Debasement Could Lead To “Economic Meltdown” - Steve Forbes
The chairman and founder of one of the world’s top financial magazines and former presidential candidate Steve Forbes’ has issued a warning that the Federal Reserve and other central banks ultra loose dollar policies could trigger an “economic meltdown.”

The Fed’s "vastly misguided monetary policies are now setting the stage for a new economic and social catastrophe -- one that could rival the financial crisis and horrors of the 1930s,” Forbes warns.

His warnings come at a time of important recent monetary and geopolitical developments regarding the increasing use of the renminbi in the international payments system, as a trade currency and as a reserve currency. In 2000, the U.S. dollar made up 71% of all reserves held by governments around the world. Today it accounts for just 62% and this number is expected to fall this year and in the coming years.

Overnight came news that Azerbaijan’s sovereign wealth fund plans to invest up to $1.8 billion in renminbi this year, in what would be one of the largest investments in the Chinese currency to be made public – and a further indication of its rapid move towards reserve currency status.

Shahmar Movsumov, chief executive of the $37 billion State Oil Fund of Azerbaijan (Sofaz), told the Financial Times that the fund hoped to start investing in the currency by the end of the year.“It’s one of the currencies that are becoming important, so why not invest in renminbi?” he said.

Forbes warns about this trend and advises a return to a “gold standard” as the only way to avoid disaster in his new book, ‘Money: How the Destruction of the Dollar Threatens the Global Economy -- and What We Can Do About It’ (McGraw Hill, May 2014).

He says that U.S. economic success and prosperity will only return if the dollar is fixed to gold bullion and not subject to the Fed’s arbitrary liquidity hydrants.

The book is co-authored by the respected Elizabeth Ames. It says that a gold standard would “lower interest rates,” provide for “cheaper capital” and lead to “gangbuster growth,” Forbes says, adding:  “If the American economy had the growth rates it once achieved under a gold standard, it would be three times -- instead of two times -- the size of the Chinese economy today.”

Steve Forbes believes that a new gold standard would curtail reckless government spending and make government more accountable. Alas, today’s Fed is now abetting the reckless spendthrifts in government by buying and monetizing U.S. debt.

Forbes adds that those inflation fears could be assuaged by a gold-based currency board, which he adds have been around for more than 150 years. In fact, Hong Kong, Denmark, Lithuania and Bulgaria use a currency board, a basket of currencies, euros and euro bonds along with gold, to back their national currencies.

Gold is not a strict, unwavering standard, as critics suggest as the price can change. “Gold is far less rigid than people realize. It is both flexible and stable,” Forbes wrote. “A gold standard no more means a fixed supply of money than a use of the metric system means there has to be a fixed number of rulers.”

The Fed’s easy money policies could end up being the black swan event that leads to market meltdown. Interest rate spikes and inflation hikes frequently lead to economic crises. Currently, economists note inflation is not a problem, but once the trillions in bank reserves, created by the Fed, come pouring into the U.S. economy, that will change.

Higher commodity prices are the canary in the coal mine for inflation, notably food price spikes.

There is also the fact that the Fed and other central banks have again created significant and dangerous bubbles in certain stock, bond and property markets.

The size and complexity of the U.S. economy would make the conversion to a gold standard difficult  to do, analysts have noted. In order to back the dollars now in circulation and on deposit -- about $2.7 trillion -- with the approximately 261 million ounces of gold believed to be held by the U.S. government, gold prices would have to rise as high as $10,000 an ounce.

Gold Bars At 1.6% and 6 Months Free Storage In Singapore Or Zurich 

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Herdee's picture

We already know that the amount of gold passing through London cannot be accounted for through the mining and recycling numbers.The only possibility is that western bullion banks are supplying the demand that's going to China.Alaisdair Macleold who posts on SilverDoctors explains it better and so does the GoldenJackAss.Everyone in America needs to wakeup to the con artists and shisters  running Washington.America is a Fascist State run as a Corporation.

atthelake's picture

A little known fact of the Great Depression is that 5 million Americans starved to death. Today, the population is much larger, we have a lawless society, the farms are gone, morals are gone and our government is working against us as we do nothing. To those of you who want this collapse to happen now, I hope you have several years of food, drink, meds and supplies because, if you don't, you and yours will die or suffer terribly. While you're at it, dig a large, deep, strong, self-contained bunker. You'll probably need it

SamAdams's picture

China will set the value of gold, not the USSA.

HenryHall's picture

Not feasible. The gold simply does not exist, it was stolen years ago.

Azerbaijan proposed to Russia that the Ruble should be anchored to the price of electricity. That seems like a good idea on a worldwide basis. Electricity power systems are everywhere. Each country just has to agree that ALL consumers and industry within the country pay the same price for electricity and that the price of electricity for locals never changes - as expressed in local currency.

It is a very feasible thing to make happen, especially if it saves the world.

Jethro's picture

China is just as corrupt as anybody else these days. Look at the recent rehypothication debacle. Paper anything is only worth the paper it's printed on.

Comte d'herblay's picture

I wish the hell Steverino was right.  I've been short the dollar for months and it's not weakening, it's getting stronger or remarkably stable.


Obamanism's picture

The Game changer will be the first Currency to be linked and backed by gold, real gold not paper gold.

With all the Copper and Aluminum "Missing" in Chinese ports, Paper copper and Aluminum, once governments figure out the scam worked and no revolution happen, then they will issue paper certs to be linked to gold then back the fiat paper to the paper gold and the Ponzi scheme continues. This will be when  gold is not GOLD and silver is not SILVER.

TeethVillage88s's picture

Reprint. Saw this last week it had a video of Steven Forbes which was years old. Could be the same article with the dates removed when Forbes predicted collapse in 2013 or 2012 or something.

falconflight's picture

Hurry up and collaspe, I'm tired of waiting.

Tall Tom's picture

You do not have to wait. It is already collapsing.


You can help it along. Withdraw your support. (Financial support is support.)

Ned Zeppelin's picture

Nonsense night on ZH. China is not strong at all and has huge problems about to reveal themselves. I am not arguing USD is the best but it is better than the Yuan.

COSMOS's picture

Stop comparing worthless fiat and compare proven gold reserves either in a vault or in a mine...

the tower's picture

"proven gold reserves either in a vault or in a mine"...


you actually still believe that any gold is stashed in some bank's vaults?


Greetings from Davos

messymerry's picture

Well, let's see, the Asians have been snapping up all the gold they can get their hands on. They know and are planning accordingly. Besides, I don't for a second believe that we have anywhere near the gold we claim to have and when all is said and done, it will be established that there is Ft. Knox gold all over the world. The spendthrift bastards are spending your and my future.

Saltaire's picture

Currency has been decoupled from gold with leasing via paper gold market, exchanging dollars for gold has not been a good trade.

KingTut's picture


The dow has lost 80% of its value since 2000 when priced in gold.

Panafrican Funktron Robot's picture

A better metric is to compare the performance of the Dow, our GDP, or whatever standard benchmark you want to use, vs. the number of US dollars represented in the monetary base calculation.

You'll see pretty plainly that in real terms (by real, I mean the increase in the supply of dollars vs. the increase in the nominal value of the Dow or GDP), the stock market, for example, crashed another 40% since 2008.  

Comte d'herblay's picture

And if we bought and sold stuff to and from each other in gold ducats, that would be relevant. But it's a Trojan Horse argument for now. 

Until fiat becomes increasingly obsolete, it will have to do as a medium of exchange. 

I don't see that changing since the Wall Street Mafia, the Fleet Street Internationalists, and the Asian Tigers all seem content with the FRN or if not content, tolerating the Buck.

You would do well to grab as much fiat as you can hold on  to, unless you live off the grid, with your suppliers willing to exchange what you want for gold. 

OC Sure's picture

The govt outlawed gold and replaced it with paper. Why can't the citizens outlaw paper and replace it with gold?

BringOnTheAsteroid's picture

How dumb are the citizens. They can use gold and silver now in exchange for goods and services but we are so subservient to authority that it doesn't even seem to register as a posiibility. 

Tall Tom's picture

First most citizens do not own ANY Gold.


Second...Have you ever heard of Gresham's Law? Bad Money chases out Good Money?


As long as people are foolish enough to accept those Limited Edition, Serial Numbered Artprints of dead US Presidents and Statesmen I will continue to trade those away as fast as I possibly can for Goods and Services. When people no longer accept those then I will have another medium of exchange to trade for Goods and Services (Gold and Silver).


It is a shame that people continue to place their faith into Government and the currency issued by that Government. It will be a very rude awakening...for most.

KingTut's picture


You're a little short on reality.  95%+ of money is NOT created by the government, its created by banks.

The paper money you hate, is MUCH better thatn the bank credit vapor that we all think is money. 

If all the banks closed you could not buy groceries with checks or credit cards.  But good old dead presidents would work just fine.

Crocodile's picture

Citizens do not make laws, they only vote the crooks into office and now the electorate are broken into red & blue by design and that leaves only two states needed for electronic voting fraud, which is Florida & Ohio.  That is what the 2000 "hanging-chad" election was all about.  See "

Computer Programmer testifies "US ELECTIONS RIGGED".
OC Sure's picture

Yup. Maybe time to reboot the system?

SMC's picture

Thought the US Government was down to 2.61 oz, which has been re-hypothecated one million times... LOL

BringOnTheAsteroid's picture

Interview with Jim Rickards, for all the gold bugs out there, very interesting:

I love Rickards point of view that the manipulation in gold will continue until there is a demand shock. It could not be explained any more sensibly than this. It will just continue until it can't anymore. The salient point is that TPTB, the oligarchs, the elite, the so called expert financiers are nothing of the sort. They are just a bunch of crooks who cheat the system until it blows up. They are onlt clever insofar as their ability to game the system for awhile. 

Crocodile's picture

If you are given the authority to print "money" out of thin air and then buy real assets; how much "gray-matter" does that take?  I feel sorry for those who actually believe that man is evolving; he is devolving and will continue to.  The love of money is indeed the root of all kinds of evil.

dmger14's picture

Love the devolution part, but not the last sentence.  Check out this rant against money being the root of all evil in Atlas Shrugged.  Ayn Rand knocked it out of the park:

Comte d'herblay's picture

I agree with all but your last sentence.

Money is no more a root of evil than guns, knives and bombs kill people.  These are all specious, lazy arguments to avoid laying the blame where it belongs: At the feet of avaricious subhuman animals that have no thought for their actions' monstrous effects against even their own self-interest in the long run. 

I love money and all the good it can do.  It is a small miracle what paper can accomplish in the right hands.  Unfortunately, like everything else beneficial in the world, it can kill you if mishandled.

And that's what is going on. The malfeasance of governors and more specifically in the Banks, especially the Jewish Mafia ones worldwide. Why this one entity is in so much control of money and its criminal misuse everywhere is the real culprit we should be after. 


TVP's picture

The average, good person, is evolving, but cheaters will always cheat.  As the masses evolve and awaken, their ways become more desperate and stupid.  

Just because the world is run by sociopaths who are running the planet into the ground does not give one grounds to lose faith in all humanity.  

There are forces for good in the world.  They just tend to desire less attention than the evil ones.  

OC Sure's picture

The solution then is to take that authority away.

OC Sure's picture

Fractional reserve arrangements are necessarily theft. Is that the crux of the manipulation argument?

BringOnTheAsteroid's picture

I wish I fully understood it OC, but I don't. I don't even fully comprehend the movement of money between the federal reserve and the US treasury even though it has been explained with cartoon simplicity by Mike Maloney. No matter how many times I read and watch documentaries like this the moment pieces of paper start being exchanged between organisations with numbers written on them, I'm lost. It just seems like a giant facade and so ridiculously contrived and over complicated.

My understanding amounts to this. Gold, silver, platinum and palladium are tangible assets. They are also rare meaning that:

  1. They cannot be reproduced by anyone, by any means.
  2. Their supply is limited and predictable.
  3. Owning these assets levels the playing field meaning that everyone needs to expend the same amount of kilojoules to obtain it. Whether by prospecting and expending the energy directly or exchanging their kilojoules expended in another field of endeavour for the gold dug up by someone else. No one can gain unfair advantage.
  4. TPTB know this and also know that fiat money provides the unfair advantage they want. Rothschild himself summed it up: "Give me the control of a  nations money and I care not who makes its laws". Why did he say this, because he knows he could print money while evryone else had to work for it.
  5. TPTB deperately what to erase from the collective conscious the notion of a level playing field and thus the use of gold as money.
  6. People could at this very moment start exchanging goods and services for gold and silver and if this were to occur it would be completely outside the control of the government. It would be an instant black market, untaxable, untraceable as most gold owners lost all their gold in a boating accident, myself included (but I don't want to talk about it as it was a painful time).
  7. The Plunge Protection Team do their darndest to suppress the price of gold in the hope of maintaining the US dollar as the pre-eminent monetary unit. HAHAHAHAHAHA, the US dollar a pre-eminent monetary unit - comic genius. 
  8. The exact mechanics of this suppression I do not understand. 

That's it. That's all I've got to show after reading every single article posted on ZH every single day for the last five years.

OC Sure's picture

Well, I can explain to you how the machinations between the Fed and the Treasury are necessarily theft once you know the difference between money and counterfeit and I do that here

 Fractional reserve banking reminds me of what may be considered manipulation in the pm markets as the loans go against phantom collateral. I don't see how a large sale of gold though that suddenly pushes the price down is manipulation. It seems like it is just a large sale of a want to be buyer in search of the bottom.

BringOnTheAsteroid's picture

I'm a strong supporter of gold as a portion of your assets but this notion of a gold backed currency solving all the problems is ridiculous. It assumes that a government is not going to simply lie about their gold bullion reserves. It's probably going on right now and the US doesn't even have a gold backed currency. If there were a few thousand tonnes of gold in Fort Know then the Germans would have their gold back by now. There aren't a few thousand tonnes, there might not even be any for all we know and there's the rub - "FOR ALL WE KNOW". 

Anyone care to explain ??????????

JustUsChickensHere's picture

I know I will get slammed here, but Bitcoin (yes Bitcoin) has an interesting attribute that Gold does not have. It is easily audited with declared holdings.

If for example, the US declare that it's Bitcoin reserves were held at this address: 1HGwgfvPDXiMjyjsxyNtZHEJ1Hkb8gPw61 then everone can audit that reserve.

If it moves... it can be traced (at present) ... and citizens could demand that the Bitcoin reserves for a national government remain publicly declared - that is separate from using other Bitcoin wallets for other government activities - equally visible, public and accountable.

Just saying ... and that would not be separate from holding Gold (and Silver) reserves ...  more accountable though.

lasvegaspersona's picture


In some gold based systems such as the one the Euro was developed for , a country would never need the 'show' it's gold. It would only need to use some of it to intervene in the market place if say..a Soros was attacking the currency. The country (or whatever entity is running the currency like the ECB) takes enough gold and buys up paper until the currency run is over. To weaken the currency it sells it and buys gold.

In fact consider what would happen if the ECB went into the market tomorrow and announced it would buy (physical only) gold in quatities of 10 tons or more and would pay what ever price was offered. It could announce it would buy unlimited amounts of gold. Overnight it could increase its gold and broaden its currency cause the POG to rocket and yet still have a viable currecny (it would have gold on its balance sheet as it does now only lots more.) Overnight we would have a new kind of monetary system that is 'gold backed'.

The difference between this and the classic gold standard would be that gold would be physical only and at market prices. This is the way that the ECB holds it gold now in fact. If the dollar starts to fail as the center of the monetary system this is where I see the world going for international trade.

Ghordius's picture

+1 this is the current consensus among the national banks that form the ECB: a neutral, market based stance on gold being preferrable to a fixed, "classic" gold standard

there is two key issues to be kept in mind: trade balance and foreign reserves

- a positive trade balance (like the eurozone's) means that in general the currency does not have to be defended (sadly, a theory only, then there is always a hyperleveraged Soros-wannabe likely to stage a currency attack. the other way of defending a currency from that is... currency size)

- meanwhile a positive trade balance often results in foreign reserves being accumulated (that's btw how a global reserve currency is formed, by others)

whenever a national bank has to defend it's currency it usually spends first it's FX reserves, and then it's gold


"Steve Forbes believes that a new gold standard would curtail reckless government spending and make government more accountable. Alas, today’s Fed is now abetting the reckless spendthrifts in government by buying and monetizing U.S. debt."

there is only one serious antidote to reckless gov spending: political will. a gold standard would only be one of the many possible tools to achieve that

"Forbes adds that those inflation fears could be assuaged by a gold-based currency board, which he adds have been around for more than 150 years. In fact, Hong Kong, Denmark, Lithuania and Bulgaria use a currency board, a basket of currencies, euros and euro bonds along with gold, to back their national currencies."

eh? Forbes is just describing the concept of currency reserves in the framework they are used. it's not wrong to explain it so, yet slightly misleading

the Hong Kong dollar is in practice pegged to the USD. Denmark's national bank has currently "soft pegged" to the EUR. Lithuania, too, a policy that is part of their accession / soon adoption to the EUR. Bulgaria is a bit further away from Lithuania, yet on the same trajectory

TheReplacement's picture

Technically it is the FR's problem about Germany's gold.  Technically they cannot give Germany US gold just because they were supposed to hold both.  That doesn't mean they didn't already sell both German and US gold illegally. 

I wonder what the punishment is for screwing an entire population of a country...

StormShadow's picture

"What is war, Alex?...Holocaust for $400 please...

OC Sure's picture

Presumably, the gold standard would be a step toward the decentralization of the banking system. The closer toward total decentralization then the less of a problem is your concern.

BringOnTheAsteroid's picture

But who holds the gold? The gold has to be absolutely centralized and centralized by whom?

Sound money can't exist as far as I am concerned while humans are involved because we will simply lie, cheat and steal given enough time. I realize the argument may be that a gold backed currency is not perfect, just better but the real question is how much better. 

Currently the federal reserve prints money with no concern for gold backing. Under a gold backed currency why can't the government just increase the gold reserves by lying. There is no motivation to stop what the federal reserve is currently doing, so neither would there be motivation to stop the government lying about their gold reserves.

OldPhart's picture

You don't do a gold backed currency. 

You do gold money. 

Buy something, you pay in gold or equivalent silver. 

No one holds the gold but you unless you're dumb enough to put it in a bank.

That is the basics of a gold based economy.

TheReplacement's picture

Why would it have to be absolutely centralized?  If gold is money and the currency represents gold you would be free to ignore the paper and just use metal. 

That and pinching an ounce from the public purse would be punishable by public execution.  That should deter most.

BringOnTheAsteroid's picture

+ 1 The Replacement

+1 OCSure

Overlooked that possibility. It also means that the integrity and resilience of the bank is handed over to market forces and if they cheat and there is a run on the bank the bank goes bust and the customer lose their money.

agstacks's picture

Correct, people today do not look closely at their bank because "it is guaranteed by the FDIC".  If people underatood there is risk in loaning a bank money, they would be more careful who to do business with.

OC Sure's picture

I suppose it would be similar to how the banking system worked from 1836 to 1913. You can hold you own gold or leave in a bank that you trust.

During the transition to total decentralization, any paper that is backed by gold is therefore redeemable by the bearer for the gold. This is what paper dollars used to be. This payable to the bearer on demand is the safety valve that kept banks from the temptation of making more loans than they had the physical wealth to afford. Those that could not resist the temptation would suffer a "run" of their bank.

COSMOS's picture

Well just like we and the Russians inspect each others nuclear stockpiles why cant we have a body made up of major industrial countries going around an inspecting gold stockpiles.