Steve Forbes Says Biden Administration Ignoring ‘Real Cure’ for Inflation

Steve Forbes, chairman and editor-in-chief of Forbes Media, speaking at an event in New York City, on June 3, 2015. Dimitrios Kambouris/Getty Images

Steve Forbes, chairman and editor-in-chief of Forbes magazine, has claimed that the Biden administration and the Federal Reserve are ignoring the “real cure” of inflation and are instead placing their attention on raising interest rates.

Forbes made the comments at the Forbes Global CEO Conference in Singapore on Monday, CNBC reported, shortly after the U.S. central bank raised its benchmark interest rate by 75 basis points for the third straight month.

“Today, unfortunately, not only is the Biden administration putting up obstacles to deal with supply-side problems but also the Federal Reserve and other central banks think you have to depress the economy to bring down inflation,” he said.

“They do it by artificially raising interest rates. So they have fewer people employed ... that is not the real cure,” Forbes said, adding that “the real cure is to stabilize the currency. You don’t have to make people poor to conquer inflation.”

In order to stabilize the U.S. dollar, Forbes suggested using gold—specifically, tying the currency directly to gold so that it has a fixed value.

“Gold holds its intrinsic value better than anything else on earth … Gold is not perfect as a stable value, but it is better than anything we have found in over 4,000 years,” Forbes said. “With unstable currencies, you get less productive long-term investments, which is key to economic growth.”

Inflation Eating Away at Earnings

He cited higher economic growth rates after the Bretton Woods gold standard was introduced in the 1940s. Bretton Woods established a universal standard through which the U.S. dollar was fixed to gold and the currencies of virtually every country in the world were tied to the U.S. dollar.

However, the Bretton Woods system, while it provided the necessary stability at the time it was implemented, ultimately collapsed between 1968 and 1973 amid increased domestic and military spending, dwindling gold reserves, and other structural issues pertaining to the standard. In 1971, President Nixon ended dollar convertibility to gold.

Forbes’s appearance at the Forbes Global CEO Conference comes as inflation is still eating away significantly at U.S. households, and Fed Chair Jerome Powell has acknowledged that achieving a so-called “soft landing” and avoiding an economic downturn will be a difficult task.

Data compiled by The Heritage Foundation and released on Sept. 22 found that Americans have lost the equivalent of $4,200 in annual income under the Biden administration due to sky-high inflation and increased interest rates.

The average American worker’s real annual earnings increased by $4,000 under former President Donald Trump’s low-inflation economy, analysts noted.

Forbes told Fox Business Network last week that he believes the U.S. economy is in a recession, even though no official designation has yet been made, despite two consecutive quarters of negative gross domestic product growth in the United States, which is the widely used definition for a recession.

“Maybe we’ll get a little blip upward in the third quarter, but we are in a downturn, and the Fed wants a downturn because the only way it knows how to fight inflation is by making people poorer,” Forbes said.