Former Malaysian Prime Minister Mahathir Mohamad, who fought off an attack on the ringgit with capital controls during the Asian financial crisis, said currency trading is “silly” and the world should return to the Bretton Woods System of fixed exchange rates.
Currency wars are futile and the U.S. Federal Reserve’s latest quantitative easing plan will result in hot money pushing up prices in small countries, the 85-year-old said in an interview in Kuala Lumpur today. The Fed on Nov. 3 said it intends to buy an additional $600 billion of Treasuries to foster growth.
“When you lose money, you must accept that you have lost money,” he said. “When you lose money and then you go back to your house and print more money for yourself, that makes things quite ridiculous. This is money that is not real, yet this money can destabilize by, for example, going into small countries to invest in stock exchanges.”
Mahathir, who stepped down in October 2003 after 22 years in power, drew international criticism when he imposed currency curbs in 1998. He called George Soros a “moron” and accused the billionaire investor of attacking the country, while Soros responded by describing the Southeast Asian leader as a “menace to his own country.”
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