Tags: Steve Forbes | gold standard

Steve Forbes: We Will Return to Gold Standard

By Courtney Coren   |   Monday, 09 Jun 2014 02:56 PM

Business mogul Steve Forbes says that not only is a return to the gold standard a realistic option, but "circumstances" in our economy will necessitate it.

"We were on the gold standard for 180 years in this country's history — did very well with it," Forbes told J.D. Hayworth, John Bachman and Miranda Khan on "America's Forum" on Newsmax TV on Monday.

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"If we'd been on a gold standard since 1971, when Richard Nixon took us off the gold standard, today our economy would be 50 percent larger if we'd just maintained historic growth rates we had for the first 180 years of our existence," the chairman and editor-in-chief of Forbes Media explained.

The gold standard is a monetary system in which the value of currency is equal to a fixed amount of gold. The currency can also be converted into gold.

"Gold gives money . . . stability just like the ruler measures length, the clock measures time, a scale measures weight," Forbes added. "A dollar measures value and when the value is stable, you get a lot more investment, a lot more growth, a lot more opportunity."

Without the gold standard in place, the dollar has grown increasingly unstable, even though there have been "periods of strength," Forbes says.

"When you have an unstable dollar, you get more speculation," he explained. "You get the kind of thing you saw with the housing bubble, and so that spells trouble for all of us."

The dollar grows increasingly unstable over a long period of time, but it "just drains us away" and "because it's not dramatic like a German hyper-inflation, people just kind of get used to it in Washington."

And Forbes claims that "we have enough gold in our vaults now" to go back to the gold standard.

Forbes told Newsmax that had we stayed on the gold standard the Dow Jones Industrial Average "wouldn't be at 16,000 to 17,000," but "would be at 25,000 or 30,000."

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The business mogul argues that the practice of quantitative easing has kept the economy from the sharp recovery that is typical in the United States during an economic downturn, and that those who have tried to use quantitative easing as a means to give the economy a hand are "guilty of economic malpractice."

The Forbes Magazine editor-in-chief discusses these topics further in his latest book "Money: How the Destruction of the Dollar Threatens the Global Economy and What We Can Do About It" just released in May.

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