In his visit to the Johns Hopkins University, Steve Forbes shared some inspiring thoughts with the students during a one-hour interview. The interview mostly focused on financial aspects and money. His thoughts can be a great source of financial opinion for millenials and young businessmen who are struggling with financial management. Of course, they are mostly personal thoughts. However, as Steve Forbes has proved his success with the magazine, his ideas may help others.

Financial Opinion from Steve Forbes

Money is going in the right direction

This thought signals that Steve Forbes has to some extent certain degree of dedication to Alexander Hamilton as a part of his financial opinion. Yes, Hamilton is an extraordinary engineer in financial aspect. He was known for his contribution in the America’s financial industry in the following ways:

• Founding a federal sinking, which served to provide financial support for the Revolutionary War.
• Ability to solve the state’s debt problem provided American with financial credibility and positive confidence shock.
• Contributing to the Federalist Papers, which contained analyses on the European and American Common Market.
• Refusing some ‘harsh’ regulations, which the state of New York enacted after the Revolutionary War. They included Confiscation Act, which was enacted in 1779; Citation Act, which was enacted in 1782; and Trespass Act, which was enacted in 1783.

Abrogation of the Gold Clauses by the US Congress

When talking about money and property, Steve Forbes reminded about the abrogation of the Gold Clauses by the US Congress in June 1933. Before, gold clauses were included into private and public covenants. This way, bondholders enjoyed payments of principal and interest in dollars comparable to the value of gold when the bonds were issued.

After the abrogation of gold clauses, the government manipulated the gold price. Then, under the Gold Reserve Act in January 1934, President Roosevelt modified the dollar in gold terms. As a result, the dollar became significantly lighter (by 41%). Consequently, gold-clause bondholders were at disadvantageous position. Gold-clause bondholders were faced with pity facts that:

• They could no longer receive additional dollars to balance the payments and the originally stipulated value of gold.
• They only received nominal dollar amounts of principal and interests, as it was stipulated on the bonds.
• Gold-clause bondholders were ‘trapped’ by the light dollar, while it was originally heavy in the original bond covenants.
• They could actually sue over the facts. However, the Supreme Court conducted abrogation of private bonds in 1935. According to the Supreme Court, contracts of the gold clauses intervened with the Congress’ authority to regulate coin money and its value.

Actually, the case was different for the bonds issued by the government, since the Congress’ authority did not include repudiation of the bonds issued by the US government. However, bondholders were still negatively affected by the defective legal briefings in proving the actual damages due to the abrogation of gold clauses.

Of course, Steve Forbes also shared other aspects related to his financial opinion. It included how Forbes is compared to Ames when it comes to the post contents besides other aspects like foreign exchange, and many more.