Investing

How Janet Yellen Could Help Fight Inflation With 100-Year Bonds

If Congress actually passes President Biden’s blowout spending bills, we’re in for a devastating breakout of inflation. There’s an effective way to ease the pain. 

But as this episode of What’s Ahead notes with astonishment, Janet Yellen refuses to do it: Sell bonds with a duration of 50 years or 100 years with a coupon of 3%. 

That yield seems generous only in today’s world of extremely low interest rates. But as inflation heats up, it will look low. 

So it would make sense to lock in low long-term rates. 

More to the point, in fighting future inflation these bonds would raise immense sums of money from existing savings and holdings of cash rather than having the Federal Reserve print gobs of new money out of thin air, which would be devastating for the economy—and for stocks. 

For the sake of us all, Janet Yellen should reverse course—immediately.

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Steve Forbes is Chairman and Editor-in-Chief of Forbes Media.

Steve’s newest project is the podcast “What’s Ahead,” where he engages the world’s top newsmakers,

Steve Forbes is Chairman and Editor-in-Chief of Forbes Media.

Steve’s newest project is the podcast “What’s Ahead,” where he engages the world’s top newsmakers, politicians and pioneers in business and economics in honest conversations meant to challenge traditional conventions as well as featuring Steve’s signature views on the intersection of society, economic and policy.

Steve helped create the recently released and highly acclaimed public television documentary, In Money We Trust?, which was produced under the auspices of Maryland Public television. The film was inspired by the book he co-authored, Money: How the Destruction of the Dollar Threatens the Global Economy – and What We Can Do About It.

Steve’s latest book is Reviving America: How Repealing Obamacare, Replacing the Tax Code and Reforming The Fed will Restore Hope and Prosperity co-authored by Elizabeth Ames (McGraw-Hill Professional).

Steve writes editorials for each issue of Forbes under the heading of “Fact and Comment.” A widely respected economic prognosticator, he is the only writer to have won the highly prestigious Crystal Owl Award four times. The prize was formerly given by U.S. Steel Corporation to the financial journalist whose economic forecasts for the coming year proved most accurate.

In both 1996 and 2000, Steve campaigned vigorously for the Republican nomination for the Presidency. Key to his platform were a flat tax, medical savings accounts, a new Social Security system for working Americans, parental choice of schools for their children, term limits and a strong national defense. Steve continues to energetically promote this agenda.


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