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Gold has intrinsic value. The problem with the dollar is it has no intrinsic value. And if the Federal Reserve is going to spend trillions of them to buy up all these bad mortgages and all other kinds of bad debt, the dollar is going to lose all of its value. Gold will store its value, and you'll always be able to buy more food with your gold.

With interest rates rising, gold doesn't pay an interest rate, but every other currency - it becomes not only less important to hold gold as an alternative, but more expensive to hold it as an insurance policy and so that will be a burden on the price of gold.

What we have to be careful is that if we drop interest rates where the rate of interest is lower than inflation, then savers will not put money in financial savings and move it to gold and real estate, which is bad for India.

In reality there is no such thing as an inflation of prices, relatively to gold. There is such a thing as a depreciated paper currency.

But because we in the United States finance our current account deficit by borrowing in our own currency, we can move to a more competitive dollar without the adverse effects that followed currency declines in other countries.

Low interest rates are a big opportunity for investment. But the issue is that this money should go to the real economy, not the financial economy.

It would be helpful if someone would lay out exactly the economic mechanism that gets us from yet lower interest rates to actual economic activity.

The problem started before World War I. The gold standard was working fairly well. But it broke down because of the war and what happened in the 1920s. And then the U.S. started to become so dominant in the world, with the dollar becoming the central currency after the 1930s, the whole world economy shifted.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.