NEW YORK ( TheStreet) -- In this interview with Debra Borchardt, Steve Forbes discusses the gold standard and the Federal Reserve. A full transcript appears below.Steve Forbes:
Weak dollar always means weak recovery. When you make an investment if you don't know five years from now you're going to get paid in 20 cent dollars, 100 cent dollars, 10 cent dollars, you get less investment. People always ask me, should I invest in gold? Why would you want to invest in gold in a normal environment with a stable currency? Answer - you wouldn't. That's just a block of metal. It doesn't pay you interest. You only want it if you're in the jewelry business or like putting stuff in your cellar.
You bring up the Federal Reserve. What do you think about their latest plan to buy mortgage-backed securities? Is that a good idea or do they need to just stop doing this? Steve Forbes:
They should take to heart what they tell medical students. Don't harm the patient. What the Fed is doing now is the definition of insanity. Something doesn't work but you keep doing it hoping that the next time it will work. They don't learn from experience. Manipulating interest rates has destroyed the credit markets. I mean what is the real price of money. No one really believes anyone in their right mind would buy a Treasury bond with 10 years of duration with a 1.8 percent interest rate with finances of the US government. But that's what happens when the Fed is manipulating the market. It corrects capital to government, corrects capital to big businesses, and starves the rest of the economy. Not good.