Tags: Steve Forbes | ongoing | financial | crisis

Steve Forbes to Moneynews: Stabilize Dollar to Fight 'Ongoing' Global Financial Crisis

Saturday, 26 Oct 2013 05:00 PM

By Dan Weil and Kathleen Walter

We currently sit in a phase of constant financial crisis, says Steve Forbes, chairman of Forbes Media.

"The crisis is just ongoing. It peaks from time to time — the sluggishness that we see in our country and around the world," he told Newsmax TV in an exclusive interview.

"Yes, we're doing better than the rest of the world but that's like a baseball player hitting .250, and everyone else is hitting .150, when we should be hitting over .300."

Editor’s Note: Obama’s Budget Takes Aim at Retired Americans

Speaking in terms the younger generation would understand, Forbes said, "it's punk performance all around."

So what's the solution? "The key is going to be to get the dollar stabilized," Forbes said. "It should be fixed to gold, and the sooner we do it the better. But you see it in the bond bubble. There's a bond bubble out there."

As for the Federal Reserve, it's discovering how difficult it is to pull back from its massive easing program. Janet Yellen, President Barack Obama's choice as the next Fed chairman, will be under immense pressure to pull back, Forbes says.

"Both she and [current Fed Chairman Ben] Bernanke are astronomers who still believe that the sun revolves around the earth," he said.

"She is in total sympathy with what Bernanke has done, but she's going to be under a lot more pressure than Bernanke has been to find a way, how do you undo this thing?"

Forbes has a suggestion for what Republican senators should ask Yellen in her confirmation hearings.

"In terms of printing money, how is that different from counterfeiting?" he said.

"Counterfeiting's illegal, but printing money is a way to stimulate the economy. Why not have everyone do it?"

As for inflation, it's currently under control, because the money being printed by the Fed isn't spilling out into the economy, Forbes says. The Fed is sending that money to banks, then it borrows that money back from the banks at very low rates to buy long-term bonds, he says.

"So, right now, the Fed has dammed most of that money up, but when it starts to leak out, then we're going to have major problems, and that's going to be a major challenge for Janet Yellen," Forbes said.

"Who knows when the dam might break? But it's very bad situation that we're facing today."

He says the United States is the best country for investors now.

"There is no real safe haven, because the commodity boom has tapered off. We have a bond bubble out there," Forbes said. Countries like Australia, Brazil and Indonesia aren't growing as fast as they used to be.

"So the best place to be, even though we're going to have turbulent waters, is right here in the United States," Forbes said. "You should have some diversification, obviously, around the world, but I would not want to be in a country like India . . . when things get tough."

Editor’s Note: Obama’s Budget Takes Aim at Retired Americans

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