Influential financial publisher and former presidential candidate Steve Forbes is out with a new warning that the U.S. faces an economic catastrophe due to the Federal Reserve's loose dollar policy, and returning to a strict “gold standard” is the only way to avoid disaster.
In Money: How the Destruction of the Dollar Threatens the Global Economy -- and What We Can Do About It, Forbes blames President Obama's money team for the stagnant economy, high prices, declining mobility and big government.
"[The Fed's] vastly misguided monetary policies are now setting the stage for a new economic and social catastrophe — one that could rival the financial crisis and horrors of the 1930s,” he wrote in the book co-authored by Elizabeth Ames.
Just like many financial conservatives have advised in the past, notably former Reps. Jack Kemp and Ron Paul, Forbes said that economic prosperity can come only if the dollar is linked to gold and not printed willy-nilly at inflated rates.
"The best way to achieve monetary stability: linking the dollar to gold,” he wrote in the book out today. “The Fed should have only two tasks: keeping the dollar fixed to gold and dealing quickly and decisively with panics,” he wrote, according to excerpts provided in advance to Secrets.
Forbes has long been a leading conservative voice on the economy, and his latest book is likely to revive calls for a gold standard.
"The refusal of many in the policy establishment to entertain the idea of a return to a gold standard is based on astounding ignorance about just what a gold standard would mean and how it would work,” he wrote in the new book.
The book is extremely critical of the Fed, especially former Chairman Ben Bernanke and current Chairwoman Janet Yellen. "The Federal Reserve must stop trying to run the banking system and the economy."
Instead, the power of the Fed should be restrained, he said. "In an ideal world the head of the Federal Reserve would be no more important than the director of the Office of Weights and Measures inside the Department of Commerce."
Among the economic problems Forbes blames on the Fed’s monetary policies:
— The U.S.'s weak economic recovery.
-- Slower long-term growth and higher unemployment.
— High food and fuel prices.
— Declining mobility, greater inequality and the destruction of personal wealth.
— Increased volatility and currency crises.
— Larger government with higher debt.
— Lower levels of business innovation and entrepreneurship.