♪.
SEAN: THE ATLANTA FED GDP
TRACKER SHOWS THAT THE U.S. IS
ON THE VERGE OF A ECONOMIC
DOWNTURN BUT HOW SOON CAN WE
EXPECT A RECESSION?
LET’S ASK STEVE FORBES, FORBES
MEDIA CHAIRMAN, EDITOR-IN-CHIEF
AND AUTHOR OF, QUOTE INFLATION."
STEVE FORBES, GOOD TO SEE YOU IN
PERSON.
>> GOOD TO BE WITH YOU.
SEAN: GIVE IT TO ME STRAIGHT,
WHEN WILL WE HAVE A RECESSION,
ARE WE GOING TO HAVE A
RECESSION?
>> WE DON’T NEED RECESSION
BECAUSE PEOPLE ARE FEELING PAIN
NOW.
BUDGETS ARE BUSTED BY BUSINESSES
AND HOUSEHOLDS WHAT HAPPENS TO
ENERGY PRICES FOOD PRICES AND
LIKE.
THEY CAN GIVE A NAME THEY WANT
TO IT.
WE’RE IN A DOWNTURN, A SLOWDOWN,
WHAT IS OUTRAGEOUS ABOUT IT IT
IS UNNECESSARY.
THE FEDERAL RESERVE WANTS THE
ECONOMY TO BE SLOWED DOWN,
FORMALLY AVOID A FORMAL
RECESSION BUT IT’S A DOWNTURN
WHERE I THINK WE WILL HAVE A
RECESSION.
THEY’RE DOING IT BECAUSE THAT IS
THE ONLY WAY THEY DON’T KNOW HOW
TO FIGHT INFLATION.
INSTEAD OF INCREASING SUPPLY IN
THE ECONOMY, THEY WANT TO REDUCE
PEOPLES ABILITY TO BUY.
THEY REDUCE DEMAND THAT BRINGS
PRICES DOWN.
WHEN A BUSINESS GOES OUT OF
BUSINESS, PRICES GET CUT.
THAT IS NOT A REAL WAY TO FIGHT
INFLATION.
THAT GIVES YOU PAIN.
SEAN: YOU DON’T THINK THE FED
SHOULD BE RAISING RATES RIGHT
NOW?
>> THE FED SHOULD LEAVE RATES
ALONE.
THAT IS LIKE RENT CONTROL.
YOU’RE RENTING MONEY.
WHEN THEY MANIPULATE, DISTORT
THE MARKET.
LET BORROW AND LENDER DECIDE
WHAT IT SHOULD BE.
THEY HAVE ENGINEERED A SLOW DOWN
OF HOUSING, EVEN THOUGH WE HAVE
HOUSING SHORTAGE, DOUBLING
MORTGAGE RATES FOR 30 YEARS.
THIS WILL GO TO LENDERS AND
LIKE.
THEY NEED TO REPLENISH
INVENTORIES.
THEY’RE TRYING TO GET
INVENTORIES.
THE COST OF MONEY IS GOING UP
AND CASH FLOWS ARE BEING
STRAPPED.
NOT A GOOD COMBINATION.
SEAN: SO WHEN WE HAVE THE IS, WE
HAD NEGATIVE GROWTH IN THE FIRST
QUARTER THIS YEAR.
LOOKS LIKE GROWTH IS SLOWING IN
THE SECOND QUARTER.
WE MIGHT TYPE INTO NEGATIVE
GROWTH WHICH WOULD MEAN A
RECESSION.
BANK OF AMERICA, DEUTSCHE BANK,
WELLS FARGO, OTHER BANKS ARE
FORECASTING RECESSION.
YOU SAY THERE IS NO WAY TO LAND
THIS PLANE WITH THE ECONOMY
ALREADY SO WEAK AND THE FED
COMMITTED TO RAISING RATES?
>> IF YOU FIND OUT A FED
OFFICIAL IS PILOTING A PLANE
DON’T GO ON IT.
THEY WANT SOFT LANDING THEY WILL
GIVE US A CRASH LANDING.
THE IDEA THESE PEOPLE CAN GUIDE
ECONOMY OF 330 MILLION PEOPLE,
DOING BILLIONS OF BUY SELL
DECISIONS EACH DAY IS
PREPOSTEROUS.
THAT SHOULD BE EXAMINED BY A
REPUBLICAN ADMINISTRATION.
WHAT IS THE BUSINESS OF THE FED?
IT SHOULD BE STABLE DOLLAR.
DON’T TRY TO MANIPULATE THE
ECONOMY.
THEY HAVE DONE A BAD JOB OF IT.
SEAN: STEVE I WAS IN CONGRESS 10
YEARS ON THE HOUSE FINANCIAL
SERVICES COMMITTEE WE WERE
TALKING ABOUT QUANTITATIVE
EASING.
IN ESSENCE THE PRINTING OF MONEY
TO BUY OUR DEBT AND
MORTGAGE-BACKED SECURITIES.
WE SAID LISTEN, MAY NOT HAPPEN
TODAY BUT THIS IS GOING TO CAUSE
INFLATION.
THIS IS BAD MONETARY POLICY.
THE FED WAS LIKE, THERE IS NOT A
PROBLEM.
IT IS OKAY.
WE’LL KEEP DOING IT.
NOW WE SEE THE CONSEQUENCES OF
AGAIN BAD FED POLICY.
>> AFTER 2008 BANKS HAD TO
REBUILD THEIR BALANCE SHEETS.
THAT’S ALREADY BEEN DONE.
THEY’RE BRIMMING WITH RESERVES.
THERE IS NO NEED TO PRINT MONEY.
WHEN THE FED DID LAST YEAR
PRINTED UP ALMOST $2 TRILLION,
THAT WAS TOTALLY UNNECESSARY.
THE ECONOMY WAS BEGINNING TO
RECOVER.
THEY DID IT FOR POLITICAL
REASONS, NOT ECONOMIC REASONS.
AND NOW THEY HAVE USED GIMMICKS
TO WITHHOLD THAT $2 TRILLION BUT
LIKE A RESERVOIR WHERE THE DAM
IS ABOUT TO BREAK.
THAT IS WHAT WE LOOK FORWARD TO
IN A BAD WAY IN 2023.
SEAN: HERE IS WHAT FRUSTRATES
ME, DEMOCRATS LIKE, THERE HASN’T
BEEN ENOUGH SPENDING.
WE NEED "BUILD BACK BETTER,"
FIVE 1/2 TRILLION DOLLARS IN NEW
SPENDING.
3 1/2 TRILLION DOLLARS IN NEW
TAXES.
THESE GUYS INSANE?
DO THEY NOT TAKE ANY ECONOMIC
COURSES?
OR MAYBE THEY WENT TO ECONOMIC
SCHOOL IN SOME RADICAL LEFT --
>> WENT TO EQUIVALENT OF MEDICAL
SCHOOL 300 YEARS AGO, THEY
THOUGHT YOU KURD THE PATIENT BY
BLEEDING THE PATIENT.
THAT CLEARED THE PAIN BECAUSE IT
GOT RID OF PATIENT.
THAT IS WHAT THEY’RE DOING NOW.
WHERE DO RESOURCES COME FROM?
IT DOESN’T COME FROM GOVERNMENT
BUT WE THE PEOPLE.
WHEN YOU REDUCE THINGS,
SHORTAGES, HIGHER PRICES, MORE
PAIN.
WHAT THEY’RE DOING ON THE ENERGY
SIDE IS TRULY OUTRAGEOUS NOT
JUST AT THE GAS PUMP, EVERY
MAJOR ADVANCE OF THE
CIVILIZATION, INDUSTRIAL
REVOLUTION, CARS, INTERNET HAS
EXPONENTIAL INCREASE IN USE OF
ENERGY.
NOW WHAT THEY WANT TO DO IS LESS
ENERGY AT A HIGHER PRICE.
THAT IS FORMULA FOR STAGNATION.
GOING BACKWARDS.
SEAN: CHEAPER ENERGY IN AMERICA
MEANS IT IS CHEAPER TO PRODUCE
IN AMERICA.
IF YOU HAVE CHEAPER ENERGY COSTS
YOU MIGHT PAY A LITTLE MORE IN
YOUR SALARIES TO THE AMERICAN
PEOPLE.
YOU ACTUALLY KEEP BUSINESSES AT
HOME WITH CHEAP ENERGY, INSTEAD
OF REGULATING THEM OVER TO CHINA
AND INDIA.
>> WHOLE POINT AFTER FREE
MARKET, BE MORE PRODUCTIVE.
GETTING MORE FROM LESS.
THEY WANT TO GO BACKWARDS.
WINDMILLS, GREAT TECHNOLOGY 500
YEARS AGO.
WE’RE IN 21st CENTURY LAST