Steve Forbes: The US Will Revert to the Gold Standard in 5 years

The US will embrace the gold standard in 5 years, predicts publisher Steve Forbes of the Forbes magazine.

According to Humanevents.com (hat tip Bob Wenzel) [bold emphasis mine]

A return to the gold standard by the United States within the next five years now seems likely, because that move would help the nation solve a variety of economic, fiscal, and monetary ills, Steve Forbes predicted during an exclusive interview this week with HUMAN EVENTS.

“What seems astonishing today could become conventional wisdom in a short period of time,” Forbes said.

Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds, and discourage reckless federal spending, the media mogul and former presidential candidate said. The United States used gold as the basis for valuing the U.S. dollar successfully for roughly 180 years before President Richard Nixon embarked upon an experiment to end the practice in the 1970s that has contributed to a number of woes that the country is suffering from now, Forbes added.

If the gold standard had been in place in recent years, the value of the U.S. dollar would not have weakened as it has and excessive federal spending would have been curbed, Forbes told HUMAN EVENTS. The constantly changing value of the U.S. dollar leads to marketplace uncertainty and consequently spurs speculation in commodity investing as a hedge against inflation.

The only probable 2012 U.S. presidential candidate who has championed a return to the gold standard so far is Rep. Ron Paul (R.-Tex.).

The gold standard has been gaining much of public’s attention as I have pointed out earlier.

And the gold standard has been associated with Congressman and presidential aspirant Ron Paul, which implies that Dr. Paul’s advocacy throughout the years has been successfully gaining followers.

I don’t think going back to the gold standard would come orderly or casually.

Considering that most politicians are intuitively averse to cut even the slightest of their expenditures, a gold standard would translate not only to less spending, but a substantial reduction of political power for power hungry politicians. And this seems to be a universal phenomenon, which means this applies to most politicians of every government.

I don’t think that this would happen even if Mr. Ron Paul successfully wins the US Presidency in 2012. (Although Dr. Paul could aid or facilitate the process, but an orderly transition is something else. Dr. Paul will be fighting entrenched and powerful vested interest groups who will vigorously oppose him by hook or by crook)

In other words, a gold standard will only happen once a severe financial storm slams the US and the world economy and markets sooooo strong or powerful enough for people to compel politicians to renege on the current system.

That’s unless politicians wake up one day and find themselves assimilating angelic virtues, all willing to abandon their functional entitlements. But this would be a black swan for me.

In effect, my interpretation of Mr. Forbes prediction is that over the next 5 years a big crisis will buffet the US for her to reluctantly adapt to a gold standard (of course this means the world too).

Have a nice day.