Fed’s Dollar Debasement Could Lead To “Economic Meltdown” – Steve Forbes
GoldCore
GoldSeek.com
Wednesday, 11 June 2014
The chairman and founder of one of the world’s top financial magazines and former presidential candidate Steve Forbes’ has issued a warning that the Federal Reserve and other central banks ultra loose dollar policies could trigger an “economic meltdown.”
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,” Forbes warns.
His warnings come at a time of important recent monetary and geopolitical developments regarding the increasing use of the renminbi in the international payments system, as a trade currency and as a reserve currency. In 2000, the U.S. dollar made up 71% of all reserves held by governments around the world. Today it accounts for just 62% and this number is expected to fall this year and in the coming years.
Overnight came news that Azerbaijan’s sovereign wealth fund plans to invest up to $1.8 billion in renminbi this year, in what would be one of the largest investments in the Chinese currency to be made public – and a further indication of its rapid move towards reserve currency status.
Shahmar Movsumov, chief executive of the $37 billion State Oil Fund of Azerbaijan (Sofaz), told the Financial Times that the fund hoped to start investing in the currency by the end of the year.“It’s one of the currencies that are becoming important, so why not invest in renminbi?” he said.
Forbes warns about this trend and advises a return to a “gold standard” as the only way to avoid disaster in his new book, ‘Money: How the Destruction of the Dollar Threatens the Global Economy — and What We Can Do About It’ (McGraw Hill, May 2014).
He says that U.S. economic success and prosperity will only return if the dollar is fixed to gold bullion and not subject to the Fed’s arbitrary liquidity hydrants.
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