This page has been archived and commenting is disabled.
Steve Forbes: How To Bring Back America
Steve Forbes has a message for a nation dominated by increasingly short-term decisions made on Wall Street and in Washington D.C., and by ever greater economic, financial and currency instability. As long as America continues moving away from sound money; away from sound financial and economic policies; and, ultimately, away from freedom, its future grows more dim. The dot-com and housing bubbles followed by the 2008 financial crisis and the most severe economic decline since the Great Depression serve as powerful lessons. A future of bigger government, higher taxes, more burdensome regulations, less consumer choice and more unrealistic government promises requires more and more Federal Reserve play money.
Steve Forbes has a quintessentially American policy prescription rooted in American history. The answer to America’s economic problems is—and has always been—new wealth creation. New wealth creation doesn’t come from the government or from the Federal Reserve’s printing press. New wealth creation is what happens naturally with stable money based on the gold standard, lower taxes on individuals, a simplified tax code, reduced bureaucracy and free markets.
Interview: Steve Forbes: How To Bring Back America
The Hera Research Newsletter is pleased to present an incredibly powerful interview with Steve Forbes, Chairman and Editor-in-Chief of Forbes Media. The company’s flagship publication, FORBES, is the leading business magazine. Combined with international and licensee editions, FORBES reaches more than 6 million readers worldwide. The Forbes.com website is a leading destination for senior business decision-makers and investors with more than 30 million unique visitors per month.
Hera Research Newsletter (HRN): Thank you for joining us today. With the U.S. economy struggling to recover from recession and financial crisis, what policies would you recommend?
Steve Forbes: The only way to recover is to stabilize our money, have a gold backed dollar, simplified tax code and return to a free market.
HRN: You advocate the gold standard?
Steve Forbes: If there’s any better system to ensure a stable value for money, it’s yet to be found. For nearly all of America’s first 200 years, the dollar was linked to gold. Since we went off the gold standard, we’ve had more and more financial, economic and banking crises. For example, if the Federal Reserve hadn’t started to print so much money ten years ago, we wouldn’t have experienced the housing bust or the commodities boom or the sovereign debt crisis in Europe. Eventually, events become a persuasive teacher.
HRN: Don’t we need a flexible money supply?
Steve Forbes: That’s like saying that changing the number of minutes in an hour would be a great tool to increase productivity in the economy. Manipulating weights and measures, whether it’s the number of ounces in a pound or minutes in an hour, is a false way to think that you can achieve prosperity. All gold does is serve as a yardstick to measure the value of your currency.
HRN: Doesn’t increasing the money supply help to stimulate the economy?
Steve Forbes: The only way to increase prosperity is through innovation and productivity. Attempts to manipulate the value of money invariably fail. We’ve had numerous devaluations, and not once has it created lasting prosperity.
HRN: Under the gold standard, would there still be a lender of last resort to backstop the banking system?
Steve Forbes: The gold standard doesn’t prevent lending during a panic. The Bank of England pioneered acting as a lender of last resort in the 1860s under the gold standard.
HRN: Wouldn’t the gold standard prevent financial innovation?
Steve Forbes: No. Financial innovation has been with us for hundreds of years in terms of new financial instruments to meet expanding needs as the global economy becomes more complex. Many of the innovations of recent years, however, have come about in response to the instability of the dollar and other currencies, which has increased volatility in currency and commodity markets. New instruments have been designed either as insurance against volatility or to take advantage of it. If you had stable money, there would be much less hedging and financial speculation.
HRN: Can governments function under the gold standard?
Steve Forbes: Certain countries feel free to spend money whether they have it or not. Fiat money, which can just be printed up, has disguised the real cost. We would never have experienced the kind of government borrowing we’ve had in recent years if we’d had stable money. The gold standard would keep the government honest.
HRN: Doesn’t government deficit spending smooth over recessions?
Steve Forbes: The bottom line for the U.S. is that a weak dollar means a weak recovery. Stability is good for the economy. The simplest thing to do is to re-link the U.S. dollar to gold.
HRN: Wouldn’t that tie the hands of the Federal Reserve?
Steve Forbes: Tie their hands to do what, further harm to the economy? I don’t think that’s such a bad thing.
HRN: Isn’t the price of gold volatile like other commodities?
Steve Forbes: The reason to return to the gold standard is that gold maintains a stable, intrinsic value over time. Stable money meets all conditions. Gold doesn’t change in value. Currencies change in value. Gold is Polaris.
HRN: How would re-linking the U.S. dollar to gold work?
Steve Forbes: You simply peg the value of the dollar to gold. Let’s say, for argument’s sake, you peg the dollar to gold at $1,600 per ounce. If gold goes above $1,600, you tighten up on money creation. If it goes below $1,600, you ease up. You keep it around $1,600 by tightening or easing up on money creation. The gold standard doesn’t preclude a booming economy having more money or a stagnant economy having less money.
HRN: Isn’t the gold standard deflationary?
Steve Forbes: No. The gold standard is neither inflationary nor deflationary. It’s like the mile: There are 5,280 feet in a mile; it’s a fixed length. That doesn’t restrict the number of miles of highway you can build. Between 1776 and 1900 the U.S. grew from a small, agricultural nation of 2.5 million people to a nation of 76.2 million people, and it became the greatest industrial power on earth. The money supply went up about 160-fold while the dollar was pegged to gold.
HRN: Wouldn’t the gold standard severely limit leverage in the financial system?
Steve Forbes: If you’re a worthy borrower, you can borrow at the market interest rate; if you’re an unworthy borrower, you have to pay a higher interest rate or you can’t get money. The gold standard would have prevented the wild lending and money creation we’ve experienced in the last few years, which has led to disaster. You can see it in the housing bubble and in the European government debt bubble. None of these things could have happened had we had stable money.
HRN: Is the Utah Legal Tender Act, which makes gold and silver legal in Utah, helpful?
Steve Forbes: I’m in favor of the states trying to get away from the Federal Reserve’s play-money approach. The key is for the next President to institute a gold-linked dollar policy.
HRN: Do competing currencies make sense?
Steve Forbes: The idea of a parallel currency is a perfectly good one. People would come to prefer a dollar based on gold rather than a dollar based on politicians.
HRN: Do you also suggest using silver as money?
Steve Forbes: The Chinese and other cultures have used silver as money, but silver doesn’t maintain its value the way gold does. Over time it takes more silver to buy an ounce of gold. About 120 years ago it took 15 ounces of silver to buy 1 ounce of gold. Today it takes more than 50 ounces. That’s why the U.S. moved away from a bi-metallic standard to the gold standard. One metal becomes more valuable than the other at different times. Silver is better than fiat money, but there’s only one gold standard.
HRN: Would the gold standard help the U.S. economy to recover?
Steve Forbes: In the 1980s, when we had very high unemployment and a stagnant economy, the way out was through a strong dollar, lower income taxes, entrepreneurship and new wealth creation. Remember, the values of assets go up when people see a future. They don’t today.
HRN: We didn’t have the gold standard in the 1980s.
Steve Forbes: Ronald Reagan killed the terrible inflation of the 1970s and sharply reduced income tax rates. Reagan wanted a return to the gold standard, but none of his advisors believed in it. Inflation was effectively killed by high interest rates. Deregulation was pushed forward, and America roared. In 1982, the Dow bottomed at 776; over the next 18 years it went up 18-fold.
HRN: You advocate cutting taxes?
Steve Forbes: Yes, and we should put in a flat tax. The advantage of the flat tax is that it enables people to focus on real things. Abraham Lincoln’s Gettysburg Address, which defines the character of the American nation, is all of 272 words. The Declaration of Independence is a little more than 1,300 words. The Constitution of the United States and all of its amendments are a little more than 7,000 words. The Bible, which took centuries to put together, is a mere 773,000 words. The U.S. federal income tax code—with all of its cross-references, descriptions of amendments and effective dates—is probably now in excess of 4,000,000 words. Nobody knows what’s in it. Last year the IRS announced that Americans spent 6.1 billion hours filling out tax forms and $300 billion on tax preparation. This is a huge waste of resources and brain power. Not to mention that it’s a corrupting influence. It’s a huge source of government power, and it brings out the worst in us. The sooner we get simplicity—and a flat tax would give us that—the more energy we can devote to productive pursuits.
HRN: How could the U.S. transition to a flat-tax system?
Steve Forbes: Since people get hung up on their deductions, we would institute a flat tax and give people the option of filing either under the new, simple system or the old, horrific system. If you’re a masochist and want to punish yourself, you can file under the old income tax system. If you want the simplified one, you can go with that. I think 99% of Americans, out of sheer convenience, would quickly switch to the new system.
HRN: You mentioned deregulation. How would that help the U.S. economy?
Steve Forbes: Take health care, for example. We don’t have a free market in health care. There’s a disconnect between patients and health care providers. If you go to a hospital and ask how much something costs they’ll look at you strangely because they think you’re either uninsured or a lunatic. How many hospitals put the prices of procedures on their websites? It’s like going into a restaurant and having no idea how much anything on the menu costs. It’s a crazy system.
HRN: How would you go about deregulating health care?
Steve Forbes: First, we should repeal the Patient Protection and Affordable Care Act—Obamacare—which is an abomination. Patients should have more choice. The insurance companies don’t compete freely for business. We should allow people to shop nationwide for health insurance. I live in New Jersey, which has a lot of senseless regulations. Why can’t I buy a health insurance policy in Pennsylvania that costs less? We should equalize the tax treatment of health care expenses. If you’re a business or are self-employed, you should be able to deduct the expense. And individuals should be free to go into the market and pay with after-tax dollars. We should make it easier for small businesses to form a collective to buy health insurance. There are a lot of simple things that could be done.
HRN: Do free markets really work?
Steve Forbes: Free markets, with sensible rules of the road, can do all the things that big government advocates say the government does but that it really can’t do. Free markets enable people to move out of poverty and break down barriers between ethnic groups and between nations. Free markets increase cooperation and foster a sense of humanity. Everything that big government says it will do, you get more from free markets than from government bureaucracies. Which one has a better future, FedEx or the U.S. Post Office? Do you want food stamps or paychecks? Big government makes a lot of promises, but it’s short sighted. Government is about meeting its own needs at the expense of the nation, and it’s immoral. Free markets have gotten a bad rap, which happens to be the subject of my new book.
HRN: The Federal Reserve recently announced that it will extend its “Operation Twist” program by $267 billion through the end of 2012. Will that help the U.S. economy?
Steve Forbes: No. The more Federal Reserve Chairman Ben Bernanke messes up, the more he’s hailed as a savior. The Federal Reserve’s programs—quantitative easing 1 and 2 and Operation Twist—are just fancy words for printing up more money. It’s a bunch of smoke and mirrors. They’ve done a lot of damage already, and they’re continuing to. What they’re doing is dangerous. Not only has the Federal Reserve created a lot of money and vastly expanded its balance sheet but, along with the U.S. Department of Treasury, it has dramatically shortened the maturity of U.S. government debt.
HRN: What do you mean when you say that the Federal Reserve has done a lot of damage?
Steve Forbes: By keeping interest rates artificially low, Chairman Ben Bernanke is cheapening the dollar, which punishes savers and harms future investment. It distorts financial markets and misdirects investments into things like creating the housing bubble. It subsidizes government borrowing at the expense of the rest of us. It’s the equivalent of a cut in pay for workers. Let’s say you’re earning $20 per hour and the government cheapens the dollar; then, in effect, you’re making $15 per hour. It violates contracts and undermines social trust.
HRN: What should Chairman Bernanke do instead?
Steve Forbes: Other than resign, Chairman Bernanke should realize that the gold standard works and that when you deviate from it, you create more and more uncertainty. He should re-link the dollar to gold. Doctors used to treat patients by bleeding them. Bernanke just keeps bleeding the economy.
HRN: Thank you for being so generous with your time.
Steve Forbes: Thank you.
Hera Research, LLC, provides deeply researched analysis to help investors profit from changing economic and market conditions. Hera Research focuses on relationships between macroeconomics, government, banking, and financial markets in order to identify and analyze investment opportunities with extraordinary upside potential. Hera Research is currently researching mining and metals including precious metals, oil and energy including green energy, agriculture, and other natural resources. The Hera Research Newsletter covers key economic data, trends and analysis including reviews of companies with extraordinary value and upside potential.
»
- 24971 reads
- Printer-friendly version
- Send to friend
- advertisements -
Suggesting that a dollar should be equivalent to 1/1600th ounces of gold is no more problematic than saying that three feet should be equal to a yard. Outside factors such as the fact that 4 quarts make a gallon are irrelevant.
********
Maybe you should re-read what he actually said-
"Let’s say, for argument’s sake, you peg the dollar to gold at $1,600 per ounce. If gold goes above $1,600, you tighten up on money creation. If it goes below $1,600, you ease up. You keep it around $1,600 by tightening or easing up on money creation."
**********
Now are you going to tell me that by printing or not printing they can "keep" the POG at 1600 without a solid lock-not some imaginary price target-
You're looking at it backwards. It's an attempt to control the price of dollars in relation to gold not the other way around. Gold would still trade on the free market. Folks could bid it up or down. If gold goes up that means that too much money is being created and is flowing into various assets with gold being the benchmark asset. When gold goes over the target amount money creation would be slowed and the price of gold as the benchmark (as well as other assets, goods and services) would then go down. This would control monetary and general price inflation. If the price of gold in the free market dropped below the target that would indicate a need to increase the money supply but not so much as to make the gold benchmark rise above the target. This would control deflation.
If gold goes up that means that too much money is being created and is flowing into various assets with gold being the benchmark asset.
*************
No it does not mean that-you have it backwards-
Why did gold go up between 2001-2008 while money printing was in decline?
http://bit.ly/N8Zh8Q
The rate of printing grew at a somewhat slower rate for a portion of that period. Nevertheless the money supply continued to grow throughout those years and did not shrink.
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=M1&scale=Le...
I do not have it backwards. Increasing the money supply eventually increases prices. You're not suggesting that monetery inflation leads to price deflation are you?
Sorry--M1 does not reflect money supply in any way-
Scroll down to the bottom of your M1 chart and read the components within M1 and you'll find out that it does not track money supply-
If you don't like M1 how about the Fed's chart of the Adjusted Monetary Base?
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=AMBNS&scale...
This chart also shows an increase over the period in question. There is no decline. Can you provide a chart which shows that the money supply shrank from 2001 through 2008? The chart you posted showed a decline in the rate of increase for a period of time but it does not indicate a decrease in the actual supply of money. The rate of growth does not drop below zero at any point between 2001-2008 on your chart.
chart which shows that the money supply shrank from 2001 through
*************
I did that-and i never said it shrank-
I said "printing was in decline"
How in fuck can you shrink currency??
Well then you have your answer. The money supply continued to grow and despite the fact that the rate of growth slowed somewhat for a short period of time the overall effect of all previous printing could no longer be restrained by attempts to suppress the gold price through means such as Gordon Brown's sale of half of Britain's gold reserves.
What Forbes proposes would not be an exact science. I would prefer to see competing currencies but assuming that a dollar would still exist then Forbes plan to link the value of the dollar to gold (and not the other way around) would seem be a reasonable way to have some control over inflation and deflation. While everything would depend on execution the basic premise that a money supply can be monitored by using the free market price of gold as a benchmark for deciding when to print and when to refrain from printing is sound.
you completly dumb fuck
It didn't grow 500% like the price of gold did you stupid fuck
I said "printing was in decline"
The vast majority of our money supply is created by commercial bank lending, not by the Fed expanding the monetary base, and, yes, the former broadly expanded through the naughties... up until the crash.
The only thing wrong with Forbes' idea is that the price is way too low to reflect the current money supply.
And yes, you do have it backwards. In a gold standard, $10,000 per ounce of gold is not the price of gold - it's the price of the dollar, because gold is the money. The dollar is just a bit of paper (or electronic bit) representing 1/10,000 of an ounce of gold physically sitting in a vault somewhere.
Claiming that the price of gold is too volatile to use as money... Jesus, are people really that fucking dumb? Take a ten dollar bill out of your pocket. Does its value directly reflect the vagaries of the paper and ink industries? No, because its value arises from dollars being the primary exchange commodity against the vast array of goods in our economy (as well as being how you pay your taxes to avoid being thrown into a cage).... not from the 'price' of the underlying commodity.
Steve hasn't been right since he lost his key to the Playboy mansion.
A lot of this is crap. Especially coming from a dude who only has a voice because he is a member of the lucky sperm club.
Effective corporate tax rates are the lowest in 40 years. Effective individual tax rates ALL BRACKETS were higher under Clinton than they are now.
Health care....don't even get me started. Free market in healthcare? Yes, that is going to solve everything....duh. So for the 50% of the population that is underinsured or not insured, the answer is being able to live in Texas and buy health insurance in New Jersey. Brilliant solution.
Asset back money..Absolutely. Federal reserve as the largest WMD that threatens the USA, YES.
Regulations out of control....yes. Bring back failure, and accountibility. Also capping punitive damages would probably go a long way to bringing back some personal responsibility.
But guess what, there never was a free market in the USA, and cutting tax rates on the "job creators" is an often repeated political line without any evidence in practice of actual truth.
But hey Steve Forbes is selling a new book on "free markets" booyah.
None of this matters.
Only oil matters.
Population is increasing and flow rate out of the ground is not. Nothing else anyone can do matters as long as this is so, and it will remain so forever.
Right on! Oil*is*Gold.
The dollar is already based on "gold" => Black Gold.
I can "redeem" my FRNs for Black Gold on many corners (at a gas station) throught the "great" United States. .
Until a few years ago, the flow of Black Gold increased along with the money supply. Lately, the flow of Black Gold has not risen as fast as in the past; however at the same time, the flow of digital FRNs has risen must faster than the flow of Oil.
Iow, the Fed should just stop printing faster than oil is flowing, and (I believe) that would solve some problems. Of course, if the Fed would just stop printing as fast as they are, that would be simply cool too.
Common lizzy you couldn't possibly make a coherent argument on why health care is a human right. Might as well say that any service or good should be free, after all people got to eat, watch their t.v. and have a roof over the head.
How about an enlightened self-interest in not being infected with TB by every cashier you exchange debt tokens with, "half-as-long"?
Simplistic and populist, loosing readers that fast ey Forbes? The guy is making more sense than the likes of Benocide (not that hard) but i still question his motives.
We can't go back to the gold standard now. Its too late. Its been 40 years already. Although the rational for going off the gold standard was to make America competitive with the rest of the world it failed miserably in that aspect, since we have been in decline ever since (in terms of debt, not market value, but just recently with market value as well thanks Bush). Another thing from LOTUS (Liar of the United States of America), I do not see how we implement this, and why the 1600 dollar number? Why not $460 the price to mine an ounce? What amount do you peg the dollar to? How would the people of the USA accept this new peg once its done? What would the result be? Does he explain this? Of course if we did the rest of the world would go into a tailspin because they would have to rely on internal demand.
This is the same idiot who publishes a list of the Billionaires who represent complete inequality in our country. Why should I listen to this man?
Although the rational for going off the gold standard was to make America competitive with the rest of the world it failed miserably in that aspect, since we have been in decline ever since (in terms of debt,
**********
The reason for going off gold standard was to engage in a foreign war # 1-
The reason for going back on GS was to appease the people-who they promised they would when the war was won and over-
The reason they went back off of it/manipulated it (1922) was because war reparations were draining the country of gold (deflation)
The US founding fathers knew that foreign wars could not be fought on GS without bankrupting the country and the same would hold true today-
Nixon who unpegged withdrew troops from Vietnam?
Watch this video. It will help you understand Nixon and what he tried to do in the time. As you can see he had good intentions, but his experiment failed because we buy all our stuff from China now.
http://www.youtube.com/watch?v=iRzr1QU6K1o
You go buy anything made in the USA and I guarantee you you will pay the lowest price in the world.
Look at this chart for a Big Mac. I am from Chicago, and even though lunch in Tokyo would run me about 40 bucks, I work less for a Big Mac than anybody in the world.
http://www.buzzfeed.com/peggy/working-time-needed-to-buy-a-big-mac
"Federal Reserve & their desire to print more money charged at interest when borrowed by the Government & abandoning Gold Standard guarantees inflation.
Under the gold standard, a government is limited – both legally and practically – as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves.
Under the gold standard, governments that print too much paper money risk runs on their gold reserves. Runs occur as holders of the paper seek to convert to gold before the vaults are empty. A run on the dollar is what happened in the late 1960s, which culminated in President Richard Nixon closing the gold window in 1971.
"Closing the gold window" is a euphemism for the U.S. defaulting on its promise to other countries to redeem dollars for gold. As an alternative, Nixon could have devalued the dollar and continued to redeem. In effect, he chose a one hundred percent devaluation, a de facto default on the promise to redeem.
In the 34 years before Nixon closed the gold window, the money supply in the U.S. grew less than two fold. In the 34 years after Nixon’s action, the money supply expanded 13 fold and the Fed Reserve has taken the US gold."
source
You mad bro? You want more Chinese stuff or what? You lazy?
Burn the whole fucking thing down and start over...............
BTW, the House of Saud has our gold..........we traded it for cheap oil..........
If they have all our gold, then it wasn't so cheap, was it?
They have title to what was our gold, but it is still stored in NYC, or at least it is alleged to be.
STFU Steve Forbes!
Isn't he just cunnin'? So cute! (But he should definitely STFU)...
(and that was sarcasm, of course).
Here is inflation before the dollar was unpegged from gold:
What cost $1 in 1931 would cost $2.66 in 1971.
What cost $1 in 1971 would cost $5.32 in 2010.
Whats going on here? We still have inflation with a gold standard. How can this be?
Although I would rather pay 2.66 for something than 5.32 (assuming a huge portion of this is energy), we will still have inflation and historic information isn't always representative of future numbers.
Whats going on here? We still have inflation with a gold standard. How can this be?
*********
That would be because there was no gold standard from 1931-1971
That would be because there was no gold standard from 1931-1971
My thoughts precisely.
Under the terms of Bretton-Woods the US dollar was redeemable in gold by other nations from the late 1940s until 1971.
forbes is a problem child.....he was one of the wunderkinds voluably calling for end of mark to market when at the time, 2008, it was the ideal time to liquidate and rennovate....the loser manager of the tbtf should have been put out to pasture and barred from banking ever again, along with plowing under their insolvent shit bricks.
his defense of the gold standard is admirable but a bi-metallic money is essential not only for small transactions but for the less advantaged.
the flat tax sounds fair but it is abysmal - the wealthy are the ones who benefit most from government and therefore should shoulder its costs without regulatory capture, which is where higher rates on them and capital come in.
less regulation yes, but not at the expense of protection from predatory and evil plutocrats....
“I lean toward a flat tax. But I want to make it real flat, like zero.”--Ron Paul
The bi-metallic standard fails because you are strictly dictating an exchange ratio between two natural commodities that do not get mined at precisely that ratio. So coins made of the 'more expensive' of the two (in terms of actual scarcity vs dictated ratio) get exported to be melted down and exchanged for the 'cheaper' one. This happened in England after Isaac Newton fucked up the ratio - silver coins vanished from the economy and they had to adopt a mono-metallic standard. Nice work Isaac.
Forbes advocated competing currencies, so, in that situation, you could have a silver currency running alongside a gold one. They just couldn't each represent a fixed quantity of the same currency, that's all.
But this is all irrelevant now, anyway. We pay by using cash and electronically. The 'less advantaged' would be no worse off under a gold standard, because the money they use could represent any amount of gold, down to tenths of grams. Under a gold standard, people aren't wandering around with gold in their pockets - they use paper money or debit/credit cards, but the money being exchanged is limited by the amount of gold the issuer (bank, or government) has.
There Will Never Be Enough Jobs In America Again
http://investmentwatchblog.com/there-will-never-be-enough-jobs-in-americ...
Enough jobs for whom?
There is just enough for "business."
If you're trying to say that there won't be enough jobs for EVERYONE which can support EVERYONE's totally unsustainable lifestyles, then yes.
Growth is dead (resource extraction has slowed and is stalling because there aren't enough resources to maintain PERPETUAL GROWTH!). All "solutions" are meaningless in the face of this.
If you've been watching Keiser, Steve Forbes was in Greece trying to vulture up some state assets for pennies on the dollar, while the police was gassing demonstrators.
If so, then his theory is ass-backwards. Vulturing, cheating and stealing are the business of America. So, it's on the right track.
Forbes has made so many stupid pronouncements that I've come to realise that there is seemingly no cost for him in behaving like an idiot in public. He's still raking in bucks.
Like the other guy said, if Forbes wasn't born rich, he'd be at the back of the insurance office behind piles of papers. He's the poster child for 100% inheritance tax for the super wealthy.
Steveie boy would make a great politician.
Mr. Forbes' 'gold standard' would not work and would give gold a bad name, especially if he thinks $1600/ounce is anything close to the correct price.
For a gold standard to 'work' the price would have to be set to at least $5000/ounce or whatever it takes to make every 'printed' dollar convertible. This would initially cause price inflation as everyone holding an ounce of gold would suddenly have $5000+ instead of only $1600 - and gold miners would go into overtime to dig up more 'dollars', thus causing the money supply to rise dramatically. After some time, other prices and wages would catch up to gold and there would be some mild price deflation. This would be OK as long as prices and wages are flexible enough to fall and people are not weighted down with long term loans.
You're right. All our money would have to be equal to the price of gold currently to what the price is now. The price of gold would be insanely high and in effect would destroy gold as an investment. That is what he wants.
All our money would have to be equal to the price of gold currently to what the price is now.
Er, what?
The price of gold would be insanely high and in effect would destroy gold as an investment.
Is it idiot night tonight? If we monetise gold then of course it's no longer an 'investment'. It's money, you fucking retard. Do you rush out to invest your USD in... USD?
LOL you just summarized what I said. Haha thanks for the laugh.
$1600 is just an example used to illustrate his point. He could have said $x but he used $1600 instead.
You already said this 5 times without ever any clarification.
Forbes said:
Do I have to call attention to what the man actually said a seventh time or has Fight Club stopped actual sparring in favor of putting up straw men?
I got your point immediately, Crockett. It seems some people are used to having things repeated multiple times before they either understand them or believe them.
Thanks, Zero. I can be a little slow at times myself but I try to be intellectually honest in my arguments. It's sad to say that I question the motives of some others here in that regard.
It's troll tag-team action!
I guess they get paid overtime Saturdays.
Without restoring the rule of law to the country and to the world, pegging the dollar to gold won't be of any use.
Steve Forbes for president.
Steve Forbes: The world's richest moron.
From the guy who couldn't bring back a magazine.
How's your magazine coming along?
Didn't inherit one.
I remember when he was saying the Fed should keep gold in a band around $350. He made some sense then . . . But lately has revealed himself in too many ways as the establishment media hack he is. Perry, RUFKM? Next . . .
As long as the thieves [bankers, financiers] are coddled by TPTB and the rule of law is scoffed at, what change can occur? And these two glaring problems are only the tip of the iceberg!
Spot on Mr. Forbes!
No hesitation or quibbling going on in this interview. That could be Ron Paul giving those answers. Gold standard, sound money, cripple the FED, reduce regulations, flat tax, more freedom -- WTF is not to like?
Good analogy: printing mony is like declaring more minutes in an hour to increase productivity. Who cares if Forbes is rich? His dad, Malcom, was a cool dude who rode a Harley and knew how to live! Steve has always been for a flat tax, way before it was cool.
Honestly, some of the negative comments gotta be from Bath Salt face-eating cannibals.
That could be Ron Paul giving those answers.
Exactly what I was thinking. I found the "more minutes in an hour" analogy to be very effective, too. I also like the way he compares requesting medical services to ordering from a restaurant menu without prices. A lot of folks seem to want to disagree with what Forbes said in this interview based on some hatred they've developed for him in the past. I don't know much about Forbes but what he says in this interview is on the mark and well explained.
You sure don't know much about Forbes. Forbes magazine made a lot of money by writing puff pieces on businesses that advertised with them. Those that did not might suffer an investigation. Steve inherited all the money and magazine and it has gone downhill since then. He has created zero wealth. His whole life is like ordering from a menu without prices.
Can you explain how that relates to a call for a simplified tax code and sound money? Do you believe that those things are bad ideas in and of themselve?
Silly Crocket! He should have given all his money away before he uttered his opinions.
Then we could have taken him seriously.
But is Steve Forbes correct in this article, or not??
Who cares if he's loaded? Only a bigoted Moneyphobe would judge him by his wallet. Malcolm Forbes was the third son of Scottish immigrants. The immigrant father started the magazine in 1917. It didn't take off and make good until Malcolm took over. Steve inherited the biz and appears to be a worthy successor.
Isn't that the American Dream? Obama's father was a British citizen, bigamist, and a marxist who gave us a multimillion dollar anchor-red-diaper-baby-in-chief. Kenya believe it? I don't hold that against Obama.... much.
Very well put, Space ghost! Thank you for fighting the trolling 1% in the comments!
Honestly, some of the negative comments gotta be from Bath Salt face-eating cannibals.
***********
Maybe the neg comments are from people who actually have a clue?
***********
For example, if the Federal Reserve hadn’t started to print so much money ten years ago, we wouldn’t have experienced the housing bust or the commodities boom or the sovereign debt crisis in Europe.
*********
http://research.stlouisfed.org/fred2/series/TCMDO
10 years ago the Fed had hardly printed any money-from 1980-2008 they printed a paltry 600 billion-
Forbes is like most wrong sided economists-he totally leaves out the credit money market which makes the base supply look tiny and it was "credit" that drove the boom and now it's debt (with not enough money) causing the bust-
http://research.stlouisfed.org/fred2/series/BASE
JJ, lay off those balth salts! Sorry, but you're the clueless idiot who did not bother to read the article.
Forbes is neither a member of the Federal Reserve nor a Wall Sreet banker, he's a private civilian. Everything Forbes says would have prevented the things you mention, and he's been saying it for years, way before the bubbles. He's always been dismissed by TPTB and been given the Ron Paul fringe treament for it.
Forbes is against FED printing and notes that a gold standard would have prevented the irrational exuburence of credit money expansion and everything else you lament! And he's right! The credit money markets are based on the same USD valuations as the M1, and are included in sound money. Douche much?
But I really do especially like his notion of a parallel currency to get the ball rolling which is very wise, just like the Swiss and others have recently discussed, because it would force sound money everywhere. I would have also added that bankers ought to have their own personal assets on the line if their bank goes tits up, like the Swiss already do, because then we'd would have zero bank failures (and no more unlimited taxpayer liabilities). I do not understand opposition to such common sense solutions.
Curious: Are bath salts addictive, or is it the face eating part?
JJ, lay off those balth salts! Sorry, but you're the clueless idiot who did not bother to read the article.
And he's right! The credit money markets are based on the same USD valuations as the M1, and are included in sound money.
********
Ridiculous-M1 tells you nothing about printing-
Why do you rant on about the Fed and about the fact that he doesn't like money printing and all the other useless drivel?
My post was only about the fact that the Fed was "not" excessively printing 10 years ago as he claims and the base chart i posted proves it-
Sounds like you need to build a strawman to defeat in order to look like you understand something-
btw..i did read the article-the difference is-i understood it-
Jack says: A gold standard precludes money printing and deficit spending by limiting the amount of money that can be printed by the amount of gold held by central banks, at an agreed upon valuation of said gold.
Don't know Jack? Apparently not.
Ridiculously lowering interest rates and debasing the price of money, like Greenspan did 10 years ago, is the same as printing money and has the same effect on currency and credit markets. A Gold standard would have prevented that by demanding a fair price for currency settlements. That is why the gold price has exploded since 10 years ago, or should I say, the USD has been devalued in terms of gold just as surely as if the FED had printed. Gold doesn't lie. It's all connected. A gold standard stops the floating currency bullshit and keeps the FED from manipulating things to benefit the chosen few.
Definition of M1:
A category of the money supply that includes all physical money such as coins and currency; it also includes demand deposits, which are checking accounts, and Negotiable Order of Withdrawal (NOW) Accounts.
Read more: http://www.investopedia.com/terms/m/m1.asp#ixzz1zzC1wHkN Jack says: Bath Salts not good for you. .Read more: http://www.investopedia.com/terms/m/m1.asp#ixzz1zzC1wHkN Jack says: Bath Salts not good for you.
Definition of M1:
*********
Sorry clown but Wiki doesn't fly in this game-
Here ya go-learn something and save yourself from looking like such a fool-
*****
M1 includes funds that are readily accessible for spending. M1 consists of: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) traveler's checks of nonbank issuers; (3) demand deposits; and (4) other checkable deposits (OCDs), which consist primarily of negotiable order of withdrawal (NOW) accounts at depository institutions and credit union share draft accounts. Seasonally adjusted M1 is calculated by summing currency, traveler's checks, demand deposits, and OCDs, each seasonally adjusted separately.
http://research.stlouisfed.org/fred2/series/M1
Tell me smart ass-how do traveler checks and checkable deposits (existing money) MZM figure into your elementary grasp as to what constitutes money supply-
I have seen a few paid trolls around :-)
Steve may or may not be a guy to be trusted..
but the story makes good sense.
And Ron Paul is the only one that make a lick of sense.
We have wars and killing all over the globe and we don't stop them because??
they don't cost us.
Got some news they do!
Steve nailed it your 20.00 dollars is now worth 10 because we doubled the paper money.
PL
All you guys are thinking about a one dimensional gold standard. What we need is to just repeal the legal tender laws. Let any two parties use what ever they choose as currency.
It's called freedom.
And along with it you no longer have capital gain taxes of any kind.
While your at it, eliminate taxes on dividends.
Then eliminate the mortgage interest deduction and corporate interest expense and we are well on our way to a system no longer strangled by stupid capital cost arbitrage and debt bubbles and busts.
But, but, but.......who will pay for Obamacare?
Robert Reich already explained that the young will be forced to pay more but that they will be left to die when they grow old and need services. That leaves plenty of cash for those that Obamacare really takes care of!
http://www.youtube.com/watch?v=IT7Y0TOBuG4
I have not read the article, I have not watched the vidio or bought the T-shirt with matching baseball hat.
Steve Forbes sez ?
So what,
Not one Prick, Dickhead banksta responsible for this global financial abortion has even been invited to the local police station to make a statement regarding a suspicion of fraud ! For crying out loud ! How long is this bad movie going to continue?
We know (at ZH) that is can not be sustained , do we not ? and THEY know that the whole theatrical/theoretical/Kabuki/Horse-shit ,smoke and mirrors,dog and pony show, whorhouse trickbag is Doomed!?
A collapse and re-set is inevitable,is it not ? So why will they not let loozers lose? As In, You ate shit and you died, we will bury you as you represent a bio-hazard and a threat to the community, adios. This stinks of utter Cowardice, Treason, Bribery, Fraud, Conspiracy,Collabaration, and denial of all that is decent. How the F**** did this happen? and why should it ? Who Profits ?
Where the F**** are the FBI ?!!!! Busy getting ammo to the ATF I suspect, DOJ ? Do not apply, it is not part of the Pogrom.
WTF ? How long will this Historical Psychotic Break last ? Can I get 5 congressmen killed by lightning or a building collapses on a gang of Wall street Munchkins ? How about a fucker dies in a sailboat accident and the paperwork washes up on the beach proving that the Pope is Catholic and is long Silver. Fook, this script is getting old and will not fly much longer ?
I guess they figure we need more drama in our lives so they will drag this out for as long as they can, which isn't too long anymore. We are getting closer to the big crash. I am so tired of this waiting. Bring. It. On.
Many of these Wall St fraudsters & banksters know what will happen to them when it all goes down. Gonna be a whole lot of people looking for their sorry asses and wanting justice to be served. They can run, but they can't hide! We'll find you bastards and it won't be pretty!!
I highly suggest watching Money Masters on youtube before declaring you want a gold standard. The answers are in the documentary.
The gold standard...hmmm....who owns and manipulates almost all of the gold in the world? Would being on a gold standard make all that manipulation magically disappear?
The real enemies of prosperity, amongst others, are fractional reserve lending and a credit-based monetary system run by private banks for profit.
Money masters is the most ignorant pack of half truths on Youtube. All money dies without gold. There is no credible argument against gold in that show. It is historically inaccurate to the point of being retarded.
The central claim is that we should have pure paper money with no backing. This is something that has never ever worked anywhere. They flat out lie about how we did it in the early USA successfully. No. We never did that. Never successfully. Not anywhere. All of our colonial money died as soon as it was found out that it was not backed by something of value, mainly gold and silver.
And, I bet, Stevie Forbes wouldn't be against fractional reserve banking!
Folks need to keep in mind that it's been derivatives that have really fucked things up (well, the model was based on the false premise of perpetual growth, for which there can NOT be, but anyway). Doesn't matter whether anything makes sense as a "solution" or not, this bitch IS going to unwind, and the unwinding will wipe EVERYTHING out: no more System. And in that case, WTF would I CARE what some future non-existent govt or set of banksters (or other criminals) would LIKE? All of them are OUT when the bomb-bay doors open: Uncle Warren was right about derivatives being WMD (and we know the US has a penchant for using WMD).
I don't know if S. Forbes, is good or bad...
The man sure makes alot of sense in this interview.
Run for president...If you turn sour, we get to stone you!
"Everyone knows where we have been. Let's see where we are going!" -Another
http://fofoa.blogspot.com/2012/07/interview.html
Maybe he doesn't understand what the Federal Reserve is or maybe he doesn't want to. The problems were going on before the gold standard was removed. There were ups and downs like always in a situation where private concerns are controlling the money supply of a nation.
It's like forgeting all history and wanting the same mistakes over and over. EU have very much effectively as gold standard. Did it save them, LOL.
USA pre Great Depression had gold standard, so what happened? Stupid
Same prescription to fix what that same prescription caused. Idiots
Repeal Obamacare? Was there Obamacare before crisis hit? Save me from repeating the history.
Learn your history before trying to solve this crisis, that is the real prescription to solving the crisis
I like Steve Forbes, he seems like a decent guy, but he was at the helm of his magazine (he no longer controls Forbes) during all the bubbles and saw nothing wrong with all the debt piling up, the crony capitalism, The Fed etc.
He cheered on Greenspan non stop.
Free market by Adam Smith ment free from rentier seeking deformation of the market. If one corporation was started by debt and another corp isn't under any debt, given all else equal, then corp A is uncompetitive with the corp B because of higher production cost and less productive, hence it distorts the market.
Corp A have to compensate by reducing other cost, for example, workers wages, but since workers are also consumers, Then corp B will have more customers since we all know that workers tend to buy their own company products and Corp A market share will be taken over by B.
Workers are consumers too.
Wasn't he running for president a couple of years back and whoring himself out for a few endorsements because he wanted to be more popular? I guess he hired new PR that convinced him he needs be taken more seriously first, then go for more popularity for his next presidential run.
Christ, he didn't expect the bloody Spanish Inquisition!
Steve Forbes is right in most things, but he has his history wrong. The US dollar was legally based on the Spanish 8 Reale, a 90% Silver coin of 451 Troy grains of Silver. It circulated within the US before the Civil war and was considerd legal tender.
Where Bimetalicism went wrong was in tying both Silver and Gold to Dollar banknotes. The banknotes were just a receipt for metal coins. The trouble was that the ratio was constantly changing between Gold and Silver. If Gold coins had been created of specific weights, rather than dollar denominations, then the market would have sorted out the differences.
Gold was used to settle differences in the balance of trade between countries while Silver was used internally. Thus, a Gold Standard was an agreement between foreign countries.
This Standard was overturned at the Genoa Conference of 1922 when the 23 largest nations agreed to accept the British Pound, and then US Dollar, as being as good as gold for their Central Bank reserve requirements.
Thus, rose the “Gold Exchange Standard” which prevented gold from fleeing countries which over printed their banknotes. All that followed, the Breton Woods agreement, the creation of the International Monetary Fund and the Bank of International Settlements along with Nixon closing the gold window, was an attempt to keep the Gold Exchange Standard from collapsing.
Steve is also wrong about the relative ratio between Gold and Silver, now. Central Banks manipulate the paper Silver market to control the price of gold. They intentionally keep Silver’s ratio below 40 to one. Currently, it is at 58, which indicates a buying opportunity for Silver. If there were a free market in Precious Metals, their relative scarcity would be around ten Silver ounces to one Gold.
If Gold were monetized to reflect the number of dollar and treasury notes in existence, then, an ounce of Gold would be worth 50 thousand paper dollars. This would be unwieldy even in a moderate hyper inflation, so Silver, at 5000 paper dollars per ounce, will trade well for smaller items. So, a loaf of bread could cost again a pre-1965 Silver dime (0.0715 ounces of Silver.)
$5000 x .0715 = $357.50.
a gold based world reserve currency would be massively deflationary
is the real criminal usury?
There is nothing wrong with deflation when your money is not debt based and you don't use insane fractional reserve ratios. It is only a problem in an idiotic fiat debt based system like we have now or when banks create a credit bubble.
"is the real criminal usury?"
YES! And think of it as being the same as perpetual growth.
Then "usury" ("interest") was first coined (is that a pun?) it's basis was in something REAL, something PHYSICAL- calves (born in transit; shipped claimed them). Now it's based on MONEY/currency, and has no corresponding value as pertains to the creation of real wealth (on real goods). As I've come to believe (I ask anyone to correct my ignorance here) "interest" PLUS principle isn't really possible (not collectively for all loans*).
* Will fractional reserve crash as people pay off loans (and not get back in) and or default?
As Churchil once correctly observed- you can always count on the americans to do the right thing, after they have exhausted all other ways. So keep that "hope"- the right thing will be done- but not before the great reset.
Churchill's maxim did not take account that after running through too many bad choices, the American people might no longer be the American people that he once knew and admired.
Churchill was a US citizen who lamented the lack of war and the opportunity given for him to rise.
Since US of A looks for war as one of their priority, they do not make many things wrong before triggering a war.
How about taxing INHERITED WEALTH at a higher rate Steve? We're creating a new 'aristocracy' - a new class of rentiers where fewer and fewer own more and more - and Steve's one of the poster children. The 6 Walton heirs are worth more than 30% of the WHOLE US POPULATION???? - while Walmart keeps most employees 'part-time' to avoid paying benefits.
I love how all those born with silver spoons in their mouths - who inherited all they have - are such experts on 'wealth creation' and what's 'best' for the country. Newsflash - What's best for Steve Forbes is not what's best for the country and the majority of its inhabitants. BTW - I've been on the Highlander, been to the Forbes 'farm' in Jersey... met Steve.....and a bunch of his ilk. They have very nice lives - not at all typical of what the rest of the country has. They're all bent on keeping what they have (all unearned) and getting MORE. Doubt any of them ever did a hard - or honest - day's work in their lives.
Pure luck - who your parents were - should not give ANYONE endless wealth. Let anyone have a couple million - then tax any more at progressively higher rates so the MOST anyone can ever inherit is limited to ten million or so. 99.9% of the world woule be more than happy with such limits.
How about you set about creating your own wealth, rather than just dreaming up ways to steal somebody else's?
The only thing you seem to be producing is hot air and jealousy!!
You can't legislate away success. Even if the economy only comprised two little girls with competing lemonade stands, one would be successful and the other would require a bailout from daddy ... because one made better tasting lemonade than the other!
You fucking socialists would then demand that the successful little girl hand over all her profits to be distributed among the other little girl, all her brothers, and the rest of the townspeople!!
For fuck's sake ... give it up and go do something productive!
Wealth depends on the environment.
As shown by US citizens, stealing an environment helps to 'create' wealth.
But yep, when you top the world robbers, maybe time to outlow theft because other people are no other solution but steal from you.
Bitcoins bitches
Here we go again with the bitcoin BS.
Mr. Forbes,
This would require a DOW to Gold Ration of around 1. So, either Gold goes to $12K per ounce or the DOW to 1600. Otherwise it is all leveraged play money.
Sincerly,
NOPOMO
Maybe they meet at 5000
Charge to 300
PWAFT!
Again!
"Docktor, Uncle Sam is just too old, let him be..."
I'll take the Dow to 1600.
That way it will all be bright again on the yellow road.
So many Forbes haters. Yet obviously no one read the article.
+1
Always insightful to read all the "born with a silver spoon" complainers which at the same time completely disregard any arguments he makes, and effectively are only whining that they weren't born with one too...
FUCK STEVE FORBES!
I agree with what some of what Steve Forbes says, but an important point needs to be made:
There's actually very little self-made or honest money left in the system anymore. It's all cronyism, and Forbes is a part of it.
So that's why when people like him say "gold standard" and "pull yourself up by the bootstraps" it rings hollow. The extreme levels of wealth of his family are as dependent on the Fed and government's teat as everyone else's.
First, you have to restore integrity and the rule of law. But this can only happen if everybody really believes in it. But nobody believes this anymore, least of all in America, this bloated multicultural empire.
Trust me...if you don't know how to game the system, you're not part of the in-crowd like Forbes.
Steve Forbes wants to go back to the way it used to be, get rich by making money off of other people [the fair way!].
This guy is like a Godzilla-sized leech.
It seems like FOFOA blogspot has it right about gold. Save in gold, spend in fiat. No need for a gold standard. Regardless, gold standard or not, our overlords will profit.
Right, lets ditch Dodd-Frank (and especially that pesky Volker rule) and let the looting continue unabated. Less regualtion. Yeah, that'll work. For the 1%. Oh, and that old "innovation and productivity" meme. Works well for corporate interests, who squeeze every last drop of productivity out of the worker units until innovation, like robotics, eliminates the need for them. Also good for the 1%. Then there is the rewriting of history, where he says lower taxes and entrepreneurship got us out of the 1980s stagflation. No mention of the huge increase in the deficit, that might give the sheeple the wrong idea. Tax cuts benefit the 1%, who should be paying at a much higher rate. The low rates are directly responsible for the growing disparity in wealth in our country. But keep telling the sheeple its all about lowering taxes. Thats been working SO well.
Still working out the gold standard thingy in my head...appealing in many ways, but the real problem is excessive leverage. Not sure we NEED to tie our currency to gold to eliminate it. And I'm long gold, baby, so no self interest talking here. In fact, most of what I believe is against my self interest. But since a sustainable economy is in my best long term interests, I try to see beyond my own greed.
You'd think these lizards could come up with a better bullshit excuse for less regulation and more financial whoring than an analogy regarding ATM machines. Fucking banker cunts.
I don't believe I'm going to say this but.........I actually agree with moat of what Steve is saying. He must be channeling his father, Malcolm. I miss Malcolm. Larger than life. He knew how to live and how to have a good time. On his motorcycle.
I trust Forbes less than I do Bernanke. At least with Bernanke I know what his con game is, with Forbes it's sometimes harder to discern, but it's there.
Well, electing a guy who was programmed from an innocent kid to learn to hate America is not a good idea.
Taking advantage of a broken childhood, using a degenerate commie pornographer as a "mentor" is not a good idea, either.
Giving the guy a fake ego by passing him up the chain sucks, too.
Having a warped outlook from all of this, it's not a good idea to go to a church where racial hatred is the only "theology."
The communists who created this guy should have been shot years ago.
We're now stuck with the "Change."
Forbes has great ideas, but we must toss the Fox from the henhouse first.
The 'Fox' is a system; the kid who became Barry was its victim, but we are paying the price.
Opium trading family heir. He does not represent the working class. I do not read his magazine or go to his website. He does not look as though he ages like a human being. I do not believe what he says. He shares ice cream cones with Warren Buffet.
Opium trading family heir. He does not represent the working class. I do not read his magazine or go to his website. He does not look as though he ages like a human being. I do not believe what he says. He shares his ice cream cone with Warren Buffet.
You had me at:
That clinches it, I am going to subscribe to Forbes magazine right now. Junk mail be damned!
right. hits on all those memes that have been drilled into your brain, details be damned! you trust those guys who preach it!
Fuck off. You would throw the baby out with the bathwater. There is nothing wrong with America, or the world, that wouldn't be improved with more individual liberty and sound money.
works for the 1%. keep it simple, stupid, right? can't let those sheeple start asking questions.
you preach mom and apple pie and act like what this guy said has anything to do with it. you their shill or something?
Going a bit over the top, are we?
What of
stabilize our money, have a gold backed dollar, simplified tax code and return to a free market
is not in line with "keep it simple, stupid" you are demanding?
You may have (well-founded) doubts about the "solution approaches" that Steve might pull out the hat, which may look like they would solve something while only cementing the way the elite can game the status quo,
but that alone doesn't make his analysis invalid.
You didn't get my irony. I see the simple messages used for propaganda purposes as ways to control the sheeple by inculcating their brains with slogans that are not examined for details. The person I responded to was demonstrating his cheerleading and nothing more. A tool for the 1%.
The original poster cited a line containing simple truths.
If your irony is picking on simple messages, then I won't get it as I completely disagree.
The way to control the masses is with overcomplexity, as not everybody is highly intelligent and takes the time necessary to sort through the garbled mess.
Sure one can still bend the story by telling only simple half-truths, but then you need to point out the missing (simple) pieces instead of only attacking the speaker.
works for the 1%.
Ha!
Talk about memes...
Your Forbes Magazine subscription is on its way!
https://w1.buysub.com/pubs/B4/FRB/2499ControlP.jsp?cds_page_id=2499&cds_...
do you make $ for each hit or something?
Lick my balls.
I believe the Forbes family has been inflating their own wealth away for decades now.
I'm waiting for Mako or CrashisOptimistic to come in and set everything straight. A gold standard solves exactly nothing. Spain has 25% UE now. On a gold standard, how the heck is any dent going to be made in that level? The US is uncompetitive at the moment in many areas of manufacturing, because billions of people in the developing world are 1) willing to put equal skills to work for less pay, and 2) they are not as concerned about the consequences of manufacturing on the environment. How will a gold standard fix any of that?
The gold standard is a fantasy believed mostly, but not exclusively, by the Walter Mitty Stacking Set, who think they'll be buying houses or the Sears Tower or babe-magnet Lamborghinis for a handful of shiny coins.
Massive debt is a symptom of the greater underlying problem: a world of finite resources coupled with an efficiency level that obviates the need for most people to have gainful employment. Debt accumulation allowed demand to be created that otherwise would not exist, thus temporarily giving billions of people a temporary reason to be. It postponed the inevitable. People who were not in a position to create wealth were able to pretend they could via easy credit, and that allowed other people to do a job providing goods or services the debt-accumulaters could not really afford. Whether the means to acquire goods in demand was enabled via faith in paper or faith in shiny metals is immaterial. Transactions not involving two necessities are merely a faith-based system of pretending real wealth can be temporarily maintained or transferred via paper or shiny metals, or paper based on shiny metals (the government-controlled claimed totals of which nobody even believes now, and would not be any more likely to believe under a gold standard). That agreed-upon delusion, however, will never solve the underlying issues the world and its population now faces: limited resources and limited need for labor.
Capacity utilization of the planet's resources is near a peak, while utilization of manufacturing or service-providing capacity is nowhere near its peak. A gold standard solves neither of those two problems, and never will.
You conflate two very real, but different issues.
Excessive debt is the very nature of fiat money creation.
Every dollar/pound/yen etc is created as a debt instrument.
A store of debt.true money is a store of wealth.
Fiat requires continued growth to maintain any equilibrium.
Return to soud money as a store of wealth,and you solve both disparite
problems.
I can't believe this Forbes interview is published on zerohedge in a positive light. I have to find another source for news. I saw this interview weeks ago on PBS, and my takeaways were: Forbes agrees with the bailout of the banks and probably the price of gold gets fixed at $1600/oz. You like Capitalism, Forbes? How about we fucking try it for a change!
Forbes said:
$1600 is used as an example not as a recommendation. And in this example it is the dollar which would target 1/1600th of an ounce of gold. Gold would still trade freely as a means of determining the level of inflation or deflation and the need to reducing printing or increase printing. If you don't like the plan that's fine but there's little to be gained by mischaracterizing what the man said.
"Socialism never took root in America because the poor* see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires."
John Steinbeck (maybe)
*/members of Tyler's club.
Hrm. A gold standard and a flat tax system, well gee. Not exactly deep.
I can't believe some of the weird historical points, though. It was REAGAN who fixed the dollar in the '80s? Bullshit. It was Fed chief Volcker. He was appointed by Carter.
The USA was "the" global industrial superpower by 1900? Uh...no.
It's not like such silly mistakes invalidate his suggestions, but I do have to wonder why he'd even mention stuff like that if he couldn't be bothered to read a few books or something. When you're born as rich as he is, though, I'm sure there's no need to actually KNOW anything.
Can't.
America is a foregone conclusion. We rolled into the UnConstitutional UN and we have an allegence to offshore interests. Their calling the shot's now and will roll other Countries (Lybia, Syria, Iran et al) into there Centeralized power structure. End of story because nobody will do anything to stop it. Just my opinion.
Centeralized power always leads into a Dictatorship. That's History.
This jackass claims concern for the country's "economic problems", yet makes no mention of the MASSIVE military spending on undeclared (and hence ILLEGAL) wars.
I.E. he wants to "bring back" a mass-murdering/terrorist regime. I say let it go (and give it a good kick on the way out).
The term wealth creation was introduced in the early eighties, at the time Reagan gave the rich tax breaks and increased the social security contribution (flat tax) to pay for it. Wealth is not created ex nihilo (from nothing), it is the accumulation of productive assets. Before the age of "wealth creation", people talked about production, and by production they did not mean profit from hiring cheap Chinese and selling to Americans with no income for the old price. The age of wealth creation started with usurious interest rates (yes the usury laws had to be changed) and the saving of the Continental Illinois bank and the Latin American debt crisis. Look it up, these normally negative events marked inflections in stock market prices, each ntroducing a new leg up in the early eighties.
The prosperity of the last thirty years is based entirely on financial innovation (taking more debt on board), and consists of paper promises. The simplistic idea that America can go back to the good old ways (smaller government and free markets) is a very artificial account of American history: Do they mean back to the money trusts and robber barons? Do they mean conquor a new continent and wrest it from the natives? Do they mean go back to sweatshops, slaves, coolies, and bondsmen?
I happen to agree with most of what Forbes says. The chief merit of gold is, however, not to value the currency, but to stabilize interest rates. And it is good to have a fixed measure instead of an elastic one: progress in other fields is based on exact measurement. But things are not as simple as proposed here: hearking back to other periods of economic chaos and warfare is self-delusion. If we really want to go "back", perhaps we should do it like a game of monopoly: relinquish all claims to wealth and start the game all over again, free of debt liabilities and properties.
Wealth is not created ex nihilo (from nothing), it is the accumulation of productive assets.
_______________________________
But wealth has to be created ex nihilo. US citizens demand it.
US citizens have stolen so much of the environment.
And they do not want to give it back.
And they want to ban theft, to make theft an ugly crime on humanity.
What other solution that wealth can be created ex nihilo?
It has to be possible to create wealth ex nihilo or US citizens are once again exposed in their cheap propaganda, aiming at preserving the status quo.
Dont steal from me, bro.
So long as one properly and historically defines "free trade" as taking land from others, using the resources of a virgin continent with little regard for the social and environmental costs, protective tariffs, slavery, forcibly maintaining a self-serving "business climate" throughout Latin America, child labor sweatshops, unregulated tainted foods, and lately regularly seizing control of foreign resources to maintain the petrodollar tribute ...
then I guess one can fully understand what Forbes means by his ahistorical description of "bringing back America".
Free markets are all about being on the right side of the fence.
Dont be robbed, do not inherit from the robbed, and free markets should be fine for you.
The tragedy is that bringing back the good old time requires to find new Indians, a hard to come asset these days... All the US citizens tragedy.
If you need to find an Indian just call tech support.
Indians are just Chinese immigrants who got lost a long time ago.
Chinese citizenism blobbing up directions.
Waiting at home until they invented gunpowder would have been smart.
I have never liked Steve Forbes. Still don't.
So Steve Forbes is all of a sudden a gold bug? hmmmm. That's odd. Never heard him mention the word gold during his entire career. When Warren Buffet and Charlie Munger change their minds too that's when you know they are getting ready to scrap the dollar and go back to a gold stsandard since it's the only thing a nation with a failed currency can do... and it WILL happen. All the high priests in the Politburu will all of a sudden find religion before the dollar scrap and change their minds about gold and then after we convert back and the savers are sufficiently ruined these same jerks will say: "See. I told ya so. I've always been a supporter of sound money and gold. All those savers of USD were just begging to be ruined and since they were so naive they basicly had it coming to them. Oh well. Lesson learned everyone. Nothing we can do now."
That occurred to me as well. It's Road to Rootaesque.
Makes no sense going back to a gold standard as that would mean being allowed to redeem dollars (which is one reason why the country moved away from the standard). The rest of the solutions have been in place the last four decades and are the cause of current problems.
Forbes is wrong. Profit isn't wealth. Profit can be made without creating wealth. Making profit is great. But to say it is creating wealth, is asinine as any Keynesian. You can have a bunch of people making profit, but not creating wealth. The two just aren't the same. To say we'll create wealth just 'naturally' is the same ideological dogma Keynesians try to say when they say 'printing' will creating wealth.
Real wealth is contributing to the furtherment of science, mankind's power over the universe and being able to turn that into the things we need; water, power, food, clothes, machines, better healthcare, so on and so forth.
Our problem is a lot bigger than Forbes can possibly understand. Perhaps because he too is a dimwit controlled by oligarchical dogma.
You not only need to get rid of the fraud (it's the corrupt response to the fraud that is debasing our currency by far the most), need to apply correct regulation while ditching the idiot ones.....it's then with such a system in place, you use credit to actually as we haven't done in generations grow the physical economy and our scientific prowress so that the added supply and tech coupled with real goals to drive us will lead to a climate where we not only have profit, but ALSO have wealth creation. The end result is the numbers work. Mankind progresses. But most importantly, it filters all the way down for all to see and affects everybody.
We need wealth creation more than we need profit. But in reality, we need both. Forbes way actually doesn't guarantee even one of those. H just focuses on one, because his dogma tells him so.
Glass-Steagall
New wealth creation is what happens naturally with stable money based on the gold standard, lower taxes on individuals, a simplified tax code, reduced bureaucracy and free markets.
Yep, but that is NOT the master plan Mr. Forbes.
Many of us KNOW how to get it rolling again, but instead of what your proposing,they have purposely chosen the OTHER way.
And Forbes is backing Romney.....who "on day one" will be unzipping WS's pants and sucking their mofo-ing cocks.
I'm afraid America is fucked ladies and gentlemen.
Where the fuck was Steve Forbes with this shit 8 months ago, when this kind of interview would have lent greater credibility to the candidacy of Ron Paul? The timing of this is pretty much stupid, which leads me to believe it's just more window dressing for the masses.
I believe that he has been saying the same things for at least a year, buy I might be mistaken. I know he was saynig everything other than the gold standard comments for years.