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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.

So, in a normal environment you wouldn't get these hard asset investments. But in an environment where the dollar is fluctuating all over the place you go for that rather than investing in the future, doing research and development.

Well, a stable dollar is what you want. You don't want it being up or down. You just want it to be steady. That's like saying 60 minutes in an hour. You don't want a long hour, 80 minutes, you don't want a short hour, 20. You want it stable so you know what an hour will give you. The same is true of a currency. So, if the U.S relinks the dollar to gold, which I think it will in the next few years, then I think it's the other currencies do the same thing just because it's convenient.

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Every ounce of gold that's been mined is still on this Earth. You can't destroy the thing. The amount that's mined each year is only about two percent of the outstanding supply. So, it's fairly stable in terms of intrinsic value. So, let's pick a number. Let's say you fix it at $1,500 an ounce. All that means is if it goes much above $1,500 an ounce the Federal Reserve or central bank will tighten up, withdraw money. If it goes much below $1,500, which means there's not enough money out there, the Fed would print up some more to get it up to $1,500. It's like a speedometer. You just keep it steady.

Deborah Borchardt:

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.

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