"Solutions are straightforward. The Fed should raise interest rates immediately by a modest amount of one-half of one percent and signal that other rate increases will be coming. The White House and Treasury should signal that they support the Fed’s move and support a strong dollar as well. The Fed and Treasury could commit to facilitate the conversion of savings into private sector investment by closing or breaking-up too big to fail banks whose balance sheets are littered with distressed assets. This will facilitate the creation of clean new banks capable of making commercial and industrial loans to small businesses and entrepreneurs.
The result, over time, would be to replace a consumption and debt driven economy with a savings and investment driven economy that rewards prudence and protects the real value of the hard earned assets of retirees and near-retirees."
- Excerpt from Jim Rickards submitted testimony as a witness in the Senate Banking Committee’s Subcommittee on Economic Policy hearing.
