Forbes to Moneynews: Fed Has Destroyed Credit Markets

Monday, 29 Jul 2013 05:18 PM

By Dan Weil and John Bachman

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The Federal Reserve has stifled lending by keeping interest rates near historic lows, says Steve Forbes, chairman of Forbes Media.

The federal funds rate target stands at a record low of zero to 0.25 percent.

"The way you get capital flowing again is to have a real price for capital instead of the price controls the Federal Reserve has clamped on interest rates," the Forbes magazine editor and former presidential candidate tells Newsmax TV in an exclusive interview.

Watch our exclusive video. Story continues below.



Editor’s Note: Put the World’s Top Financial Minds to Work for You

"We all know what price controls (rent controls) do to the housing market, . . . they destroy it. The Fed has destroyed the credit markets for small and medium-sized businesses or certainly warped it in a very major way."

Forbes is president and CEO of Forbes Inc. He ran for the Republican presidential nomination in 1996 and 2000, urging the adoption of a flat income tax with a single tax rate.

His latest book is "Freedom Manifesto: Why Free Markets Are Moral and Big Government Isn't."

A stable dollar and unfettered interest rates would lead "credit to flow more freely," Forbes said.

Bank loans have begun a modest rebound, "but this is in the fifth year of a recovery, and this is pathetic," Forbes said.

"So, on the litany of things [that need to change], after we get rid of Obamacare, how about throwing out Dodd-Frank and starting over on that one and give community banks a chance to compete again?"

Editor's Note: See more from the exclusive Newsmax TV interview:

• Forbes: Stable Dollar, Flat Tax Would Send Dow to 25,000

• Forbes: Yellen, Summers Both 'Pretty Sorry Choice' for Fed Chief

• Forbes: Obama in a 'Bubble' as US 'Crumbles' Under Obamacare

• Forbes: Obama Waging War on New Energy

• Forbes: Reforms to Corporate Tax Codes Means Billions in 'Free Money'


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