Not unlike the publishing industry, Steve Forbes on Wednesday told hundreds gathered for the Oppenheimer & Co. investment conference here that the 2010 economy isn't based on one rate card.

“It's not a one-size fits all,” he said.

Malcolm Stevenson “Steve” Forbes Jr., the editor-in-chief of business magazine Forbes, a Republican candidate in the U.S. presidential primaries in 1996 and 2000, and Arizona Republican U.S. Sen. John McCain's economic advisor on taxes, energy and budget for the 2008 election, predicted a jagged recovery this year, but it won't replicate that of the 1980s or 1990s.

“We will have growth,” Forbes said, because the credit system is starting to work again. “The system's come back to life, but not fully: Small businesses are still having a hard time rolling over their loans and getting new debt; same with consumers. Some get credit easily, and others not at all.”

The stock market will end up, because it is coming off a low base.

But be on guard, Forbes said, explaining that the real game changer will be the strength of the dollar.

“The weak dollar is poison,” he said. “You can't have a sustained economy with currency this weak.”

Watch for inflation.

And for those wanting to know the cap on gold?

“Gold is surging again,” Forbes added, because of speculation the Federal Reserve will turn a blind eye toward the dollar at this time.

“Buckle your seat belts,” Forbes said. “There's volatility ahead.”

His predictions came during a conference attended by more than 550 investors and business leaders in the Coachella Valley.

Setting the stage early in the day were Oppenheimer chief investment strategist Brian Belski and Ben Stein, economist and financial writer for publications such as The Wall Street Journal, Barrons and New York Magazine.

“When the dawn is darkest, the U.S. always comes back,” said Belski, noting that the nation came out of a similar recession in the mid-1970s after about six months ago.

Belski said he sees a rising channel- type market, and is confident the dollar is coming back.
“People are buying gold because it's a momentum trade,” he said, but noted that this is the time to consider buying equities again.

“It is OK to be bullish,” he said. “It's OK to be an American, and we have better times ahead of us.”

Stein also agreed that the “Super Recession” is on a course of recovery.

This go-around, he said, he learned that the government doesn't necessarily protect the investor.

“Your hard-earned money has to be protected by you and your investors,” Stein said, offering three pieces of advice:

Seek out guidance from someone you trust.

Diversify your investments.

Heed the mantra of Warren Buffett, Forbes' richest man in the world in 2008 with a net worth of about $62 billion: “Be fearful when others are greedy; be greedy when others are fearful.”

Charles Laverty, senior director of investments for Oppenheimer & Co. in Indian Wells, said he felt this was a key time to host an event like this. Some of the nation's top Wall Street analysts led breakout sessions on investment strategies and economic trends.

“Even though the markets have been hammered, there are still a lot of companies that are making money,” Laverty said. “I thought it was important to break it down for our clients and guests.”

As recovery gains momentum, Forbes warned against getting caught up in the euphoria.
“Growth could be 3 (percent) to 4 percent, but be aware,” he said. “If the Fed keeps printing money, eventually it will affect interest rates.”

Other unresolved questions are lagging indicators — like, the fate of health care and tort reform, cap and trade, tax reform, under-funded pensions and high unemployment.

On the business side, and especially for California, Forbes said the income tax rates have to be reduced.

“They are driving entrepreneurs out,” he said. “We also have to stop treating capital gains” as permanent revenue.”