Wednesday, October 29, 2008

Steve Forbes on Gold and the Fed

Steve Forbes, in November's Commonwealth Club magazine, says ignore the Fed and look at gold prices:

How do you know whether this thing [market situation] is getting better or not? Don't listen to the Federal Reserve--they speak what sounds like the English language but is designed to leave a fog of confusion. [Instead] Just look at the commodity markets, particularly the gold price. This has worked for 4,000 years; it'll give you a good indication whether they're doing it right or wrong. Right now, gold has come down a little bit, but it's still high, $870 or $880 an ounce. If it stays in that range, expect that more strange things will happen. If it comes down to the $600, $500 range, and they keep it there--don't let it fall below that--we'll be okay; we'll get out of this pretty quickly. Just watch the commodity markets, not what these folks [at the Fed] say.

Snarky. And probably true. As of October 29, 2008, gold was between $740 and $750 an ounce.

1 comment:

alison said...

Over here (i.e. Europe), there has been much media coverage in the past few days re: the dollar / gold, and being suggestive that the dollar may no longer be the standard in future (departure from Bretton Woods, etc).

Reporting has been a mixed bag, esp. with the now $1.54 = £1 rate last time I looked (previously $2+ = £1). Sterling taking its largest drop in x years, the € has taken a similar slide.

If I remember half of what I've read over the past week, I'll dig out.