Steve Forbes to Jewelers: 'Expect a Good Year'

Forbes magazine's Steve Forbes told jewelers at a recent panel discussion that they could look forward to a "positive" year of business in 2004. Forbes's optimistic comments came at the end of a diamond jewelry presentation sponsored by Couture Jewellery Collection & Conference that took place at the winter Jewelers of America New York (JANY) show. During his discussion of the state of the economy, Forbes touched on a number of subjects important to jewelers.

• Productivity. "Expect 4%-5% growth [in GDP] for the year," said Forbes. "Companies are lean, and capital spending is making a comeback."
• What's 'goosing' the economy? "The tax cuts of last May are goosing the economy," claimed Forbes. "What's important [about this stimulus] is that it reduces the rate of tax you pay on your income. The tax cuts also reduced capital gains taxes by 15%-20%. The stock market has also gone up $2 trillion since the tax cuts passed."
• Gold. Forbes told the audience to "look at gold [prices]" for strong economic indicators. For example, if the price of gold falls below $300, that's an indicator of a "bad economy." However, if the price of gold rises above $400, "the Fed is giving the economy too much juice," and that's when inflation can occur.
• The International front. "There's growth in Japan and an emerging middle class in China," said Forbes. "And as our economic recovery gets legs, so too will Europe's. The [U.S.] stock market will have a good year."
• Long-legged recoveries. "These [post-recession] economic recoveries have long legs," said Forbes. "The last two—in the 1980s and 1990s—lasted more than seven years each. Barring something bad happening, this recovery should last a long time. The outlook for the luxury sector is pretty positive."