Steve Forbes Predicts an Increasingly Promising Future for Jewelry Retailers

Business executive and Forbes magazine editor-in-chief Steve Forbes addressed hundreds of jewelry retailers at the Plumb Club’s second annual breakfast symposium at the JCK show in Las Vegas on June 1.

The subject: What to expect from the volatile economy in the coming years, and how the changing economic tides could impact small business. While Forbes, a two-time Republican presidential candidate, at times pushed his fiscally conservative agenda too aggressively (in my opinion, he took a few potshots at President Obama’s initiatives), there’s no denying the tycoon’s breadth of knowledge and magnetism as a public speaker.

Steve Forbes’ speech featured on JCK TV

Here are a few highlights from Forbes’ hour-long speech:

On the economy…

“It’s going to grow more than it did last year—around 3 percent. Housing’s coming back, even though, in real terms, it’s lower than it was in the late 1990s.

There’s a lot of pent-up demand out there. People want to buy again. Bank credit is a little freer today than it was a few years ago. This is still the most feeble recovery in history. If we’d had a normal recovery, today, you’d have 3 [million] to 5 million more jobs. Instead, we’ve been puttering. [The economy] is better, but it’s like we’re going 45 in a 65 mile an hour lane. We’re not going to win any NASCAR races.”

Barriers holding us back…

“We hear a lot about ‘the new normal.’ That is absolute nonsense. This is the new abnormal. Why are we in this area where we’re seeing improvement, but not the kind of improvement we’ve had [after past recessions]? Monetary policy. It is the most boring subject in the world, but it’s absolutely critical that we understand it. The Fed has been on a bender, printing too much money.… When that happens, bad things happen. And this is the critical reason why we’re [seeing] slower economic growth, stagnating median incomes. We never would have had a bubble if the Federal Reserve hadn’t undermined the integrity of the dollar. You are one of the chief victims when that thing [monetary policy] goes wrong. There’s no reason why gold should have done what it did.”

Signs of life…

“Credit is starting to grow again, which is why the economy is coming back to life. We’ll have to see if the Fed gums it up again. In the next few years, you’re going to see something happen: the dollar relink to gold. Why gold? More than any other thing in the world, it keeps its intrinsic value. You’re going to see a new gold standard. Gold is a yardstick. It’s both flexible and stable: stable in value, flexible in the marketplace. It’s like an odometer in a car. What this means for you is that you’ll have no more volatility in gold, and you’ll have significantly lower volatility in other materials.”

On taxes…

“As you know, taxes are…a price and a burden. A tax on your income is the price you pay for working; a tax on your profit is the price you pay for being successful. What we’re seeing in a time of economic trouble [is that] governments, until very recently, were raising taxes. People are starting to get the idea that maybe this isn’t such a good idea. You’re starting to see something happen in this country – a consensus is beginning to emerge. Big reform in terms of our tax code is coming.… The idea is out there: Simplification can reduce taxes. You don’t have to go to the Amazon to find exotic creatures—they’re all in the tax codes.”

On Internet sales tax…

“Internet sales taxes—that’s not going to happen now. The bills in Congress still haven’t done enough to simplify enforcement. It’s not going to clear the House. Lawyers are ready to sue because it’s still very complicated. Maybe when they rejigger this thing a few years from now.”

For jewelry retailers…

“The Web has shattered what we do, the print media. Jewelry and watches are not going to go the way of print. What we did for 150 years went out the window. [Young people] may be into iPads and iPhones. But jewelry has sustaining appeal. Remember, young people brought back the martini. Right now, things are turbulent, but it’s not going to last. You have something that’s been enduring for thousands of years.”

JCK Magazine Editor