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Forbes: US Will Return to Gold Standard After 2012 Elections

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Panhead


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Forbes: US Will Return to Gold Standard After 2012 Elections
Wednesday, 31 Aug 2011 05:43 PM

By Forrest Jones and Kathleen Walter

The United States will return to a gold standard of some sort after the 2012 presidential elections because current economic policies that weaken the dollar in hopes of fueling economic growth can’t last forever, says publisher and former Republican presidential hopeful Steve Forbes.

"We will return to a gold standard. It will be a modernized version of it but in essence, it'll be the basic principle that the dollar will remain constant with gold," Forbes tells Newsmax.TV in an exclusive interview.

The U.S. abandoned the gold standard, which bases the value of the dollar to gold, in the Nixon administration in the early 1970s.

Today, currencies are valued in relation to one another, normally set by foreign exchange rates.

However, since the U.S. dollar serves as the world's reserve currency, which means other countries use it for stockpiling reserves, to trade with one another or to buy and sell goods in global capital markets, the U.S. Federal Reserve enjoys the luxury of printing as much money as it wants in order to tinker with its economy as it sees fit.

The downside of such loose monetary policies includes higher inflation rates and a weaker dollar, and some say the United States should return to a gold standard in hopes of forcing the government to live within its means even if it means sacrificing the flexibility that comes from being home to the world's reserve currency.

Asked how high the price of gold might go, Forbes responds: “Keep in the mind the real value of gold remains constant. What you see now is fears about the future."

Fed Chairman Ben Bernanke has been criticized for weakening the dollar and pressuring inflation rates upward via loose monetary policies while the benefits they were supposed to generate — more growth and employment — failed to materialize of any measure.

“If Ben Bernanke were to announce today that the dollar will be as good as gold and he would work toward it, you might see a reduction in the gold price because there’s a lot of future devaluation priced into the price of gold," the CEO and president of Forbes Inc. said.

“People see that Bernanke wants to trash [the dollar] so they don’t wait for it to happen, they start hedging right away."

Gold prices have soared this year thanks in part to Federal Reserve polices, trading above $1,800 per ounce and showing no signs of abating as investors flock to the precious metal as a hedge against a weak dollar.

"So it's in Ben Bernanke's hands. He could send it to $18,000 an ounce. I don't think he's going to have the opportunity to do so," the Forbes magazine editor said.

Those who don't plan for new leadership in the White House and an end to loose monetary policies could get hurt.

"In terms of investing in gold, of using it as a small part of your portfolio as an insurance hedge, be extremely careful," he said. "This dollar-weakening policy is not going to continue, certainly after 2012," he said.

"I think after 2013, you're going to see a new regime in Washington, and you're also going to see in the next five years something that sounds astonishing today — and that is for the first time since the 1970s, the dollar will be re-linked to gold," said Forbes, who ran unsuccessfully for the Republic presidential nomination in 1996 and again in 2000.

Some commodities experts agree that gold may be due for a breather, pointing out the asset is swelling to bubble territory these days.

"We're in it. This is a bubble as we speak. I think that we could see gold prices fall as quickly as we've rallied, I think we can go down north of $200 rather quickly," John Licata, chief commodity strategist at Blue Phoenix Commodities, told Newsmax.TV recently.

A breather, however, doesn't mean an end to longer-term gains.

"I think there is way too much momentum in the price of gold, and I think although longer term we can continue at the trend above $2,000, I just think that having a move from $1,300 back in January to over $1,900 overnight is far too great of an upside swing that makes me nervous."

© Moneynews. All rights reserved.


http://www.moneynews.com/StreetTalk/forb....omo_code=CF4F-1


gente


NICE!! thx Pan

gente


the United States should return to a gold standard in hopes of forcing the government to live within its means

Amen to that!

Panhead


Admin
more......

Gold Standard Comeback Enjoys Support

Published: Thursday, 1 Sep 2011 | 12:32 PM ET Text Size By: Jessica Naziri


An age-old idea — the gold standard — is attracting new fans, amid growing investor concern that enormous government borrowing is weakening the dollar and spark hyper-inflation.

The day of realization is coming, James Grant, editor Grant's Interest Rate Observer told CNBC Thursday. "What can be said for the gold standard is that it is time tested. It has monetary properties. It worked imperfectly but consistently for a 100 years until it was interrupted," said Grant

The old standard, which fell out of use by the 1930s, was conceived to control money supply growth (and thus inflation and asset bubbles) by requiring currencies be backed by physical gold.

The concept has gained new currency in the wake of the 2008 financial crisis wherein governments and central banks tried to stimulate economic growth through extraordinary fiscal and monetary stimuli.


"The human society is going to recognize that current monetary arrangements are defective and are robbing us of the dynamism that this country has been known for," Grant noted.

According to Grant, under a gold standard, a given country can fix its currency to a given quantity of gold. However, in an event of a recession, governments would be powerless to print money under the gold standard.

"Under a proper gold standard the government would have to fund itself and the open market would not do it," he concluded.



The gold standard would limit the amount of debt the government could issue, Grant said.

"What we want is a monetary system that is objective, that we can understand, that has at its bottom as its root — something that we can recognize as money. Gold is recognized as money," he added.


MrsCK


Bull!!! The world is NOT going to wait on the USA after the stupid elections next year!! The world economy is going DOWN like a coma cozy pilot in WW2!!!! Wonder what this will do with gold prices?? Wow gold is UP $26 bucks this morning and wall street hasn't even opened yet!!

Panhead


Admin
just posting what I'm seeing kiddo....it correlates with what your sayin, except the timeline is not as quick....I'm just happy to see it being talked about in the media.

w8tin


Ck...your response is killing me...that subject, i.e. usa, after 2012 elections, really fires you up! Mad Love it!

Panhead


Admin
MrsCK wrote:Bull!!! The world is NOT going to wait on the USA after the stupid elections next year!! The world economy is going DOWN like a coma cozy pilot in WW2!!!! Wonder what this will do with gold prices?? Wow gold is UP $26 bucks this morning and wall street hasn't even opened yet!!

Kamakazi CK....has nothing to do with comas dear......(sorry...had too)

MrsCK


Panhead wrote:
MrsCK wrote:Bull!!! The world is NOT going to wait on the USA after the stupid elections next year!! The world economy is going DOWN like a coma cozy pilot in WW2!!!! Wonder what this will do with gold prices?? Wow gold is UP $26 bucks this morning and wall street hasn't even opened yet!!

Kamakazi CK....has nothing to do with comas dear......(sorry...had too)

well dang..I googled the spelling...and that is what came up..oh well you got the idea! really I could have just said "world economy is just screwed" but I was tryinggggggggggg to be nice today.

MrsCK


ALSOOOOOOOOOOOOO

Just took a look at gold price...UP!!! NOW!!!! 44.00 BUCKS!!!!

Wall street ain't open yet either!!!

Guess the "secret" is out???

Panhead


Admin
MrsCK wrote:
Panhead wrote:
MrsCK wrote:Bull!!! The world is NOT going to wait on the USA after the stupid elections next year!! The world economy is going DOWN like a coma cozy pilot in WW2!!!! Wonder what this will do with gold prices?? Wow gold is UP $26 bucks this morning and wall street hasn't even opened yet!!

Kamakazi CK....has nothing to do with comas dear......(sorry...had too)

well dang..I googled the spelling...and that is what came up..oh well you got the idea! really I could have just said "world economy is just screwed" but I was tryinggggggggggg to be nice today.

no worries....I'm used to it after all these years....lol...A for effort though!

MrsCK


GOLD UP 50 BUCKS!!!!!!!! come on $1900!!!

Panhead


Admin
why not break 2k......c'mon!

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