Forbes cited an example favorably from the 1980s: After then-Fed Chair Paul Volcker reined in inflation with a dramatic interest rate hike of more than 20%, U.S. President Ronald Reagan stabilized the economy and increased production by cutting taxes and introducing deregulation.
The Reagan administration also coordinated global efforts to sell dollars and buy up other currencies.
“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 inflation down,” he said disputing the idea that a recession is the only solution to combating inflation.
“They do it by artificially raising interest rates. So they have fewer people employed … that is not the real cure,” he said.
“The real cure is to stabilize the currency. You don’t have to make people poor to conquer inflation.”
Currency imbalances is bad news for economies. A soaring U.S. dollar means more expensive exports, while weaker currencies could mean issues like lower foreign exchange reserves.
