“Sinning” Fed undermining the dollar: Steve Forbes
Steve Forbes has had enough of the Federal Reserve and its policies to undermine the dollar. In this no-holds-barred interview, only with Birch Gold Group, the legendary publisher and CEO of Forbes, Inc. reveals the damage that our central bank has created. Plus, find out why he believes so strongly in the gold standard, and the one single scenario under which he would ever sell his gold.
Rachel Mills for Birch Gold Group (BGG): I am so glad to be talking with Steve Forbes, here at FreedomFest. My name is Rachel with Birch Gold Group. Can you talk a little bit about the Federal Reserve printing money these days. And the Federal Reserve recently announced that they have decided to stop printing money by October. Do you think that will actually happen, the Quantitative Easing, anyway?
Steve Forbes: The Fed will stop the Quantitative Easing, but what is disturbing is that they are going to still keep all the bonds that they bought. They’re not going to let them run down, which is now going to be about, when October rolls around, four and a half trillion dollars. So the Fed is still sinning, and those excess reserves are still an overhang and they’re still working to undermine the dollar, openly.
BGG: Do you think they’re going to be using any kind of back door vehicle to basically effectively do the same thing but just sort of under the radar?
Steve Forbes: Well the overhang is so huge, it’s unprecedented. They don’t have to do anything, it’s already there. And they just have to hope that the flood doesn’t sweep away the town.
BGG: Right, you also said that you believe in gold and owning gold, not as an investment but as insurance against economic malpractice. Tell me more about your thoughts on gold these days.
Steve Forbes: Well gold maintains its intrinsic value better than anything else on Earth, and that’s for 4,000 years. And when you see the dollar price fluctuate around gold, that means the dollar is either weakening or peoples’ perceptions about the dollar are changing. So for 180 years this country, the United States, had the dollar fixed to gold, worked pretty well. Certainly has worked better than the floundering we’ve had since. And in the ’80s and ’90s, we had a semi-stable monetary policy, so instead of an F, we’d give it a C, maybe a C+. But we had a terrible decade in the ’70s and we’ve had a terrible time since the early part of the last decade. And this is all unnecessary.
BGG: What do you think about the performance of Bernanke and now Janet Yellen at the Fed?
Steve Forbes: Bernanke was a disaster. He put in Quantitative Easing, he put in Operation Twist. He suppressed interest rates across the board, which has totally mucked up the credit markets. He hurt the economic recovery, this is the first time we’ve had a recovery that didn’t have a sharp snap back, at least initially. And before he became the head of the Fed, he bought into weakening the dollar and bought into the idea that there are excess savings around the world. So he’s got a pretty bad record.
BGG: And do you think Janet Yellen is simply continuing that?
Steve Forbes: Janet Yellen has shown that she needs to go to re-education camp. She has learned nothing and won’t because she has a PhD, spare her a lot of years in the system. So she is a devotee of the Kool-Aid.
BGG: I would agree. You said something really interesting about the gold standard that I wanted to ask you about. You said that a way to sort of peg the dollar back to gold would be to peg it to the price of gold. We would print more dollars based on the price of gold, we would print or stop printing. Can you elaborate?
Steve Forbes: Yes, let’s say we fix the ratio at $1,300 to an ounce of gold. So if it went above $1,300, the Fed would stop the printing. If it goes below $1,300, it would print to keep it, keep it within range.
Steve Forbes: It is. That’s what the high priests of funny money don’t want you to know. The gold standard is very simple to do.
BGG: That’s amazing. But we’re not going to do that, why?
Steve Forbes: One is the economics profession knows less about money than it did a hundred years ago. And they and others have a vested interest in currency instability. Currency trading, now the volume on a daily basis, is over three trillion dollars.
BGG: Currency trading?
Steve Forbes: Currency trading.
BGG: Wow. Just people changing money back and forth trying to get an edge. It’s a huge, huge business. But it’s not really a business.
Steve Forbes: No, gold would put it out of business. They could do something useful, like medical research.
BGG: Do you think interest rates are going to actually go up any time soon?
Steve Forbes: Not a lot. The Fed is determined to suppress them, which means you won’t get good functioning credit markets. So that’s another example of Janet Yellen, she’s misbehaving like Mr. Bernanke.
BGG: They would much rather have people spending and borrowing rather than saving.
Steve Forbes: Well they buy into the notion that saving money is putting it in a black hole instead of realizing that’s capital to create a more prosperous economy. They think people buying stuff is the way to wealth. Well, people produce to buy. But they believe in counterfeiting.
BGG: So do you sell gold often? What would it take for you, personally, to sell your gold?
Steve Forbes: When we’re on a gold standard. Then you wouldn’t need the insurance.
BGG: Right, well thank you so much for talking with me.
Steve Forbes: Thank you, thank you.