Jim Grant: The Word for Inflation is ‘Bull Market’ (Video)
Jim Grant, publisher of Grant’s Interest Rate Observer, was interviewed by Steve Forbes. Jim gives a grim overview of the economy, saying that the Fed’s suppression of interest rates and the creation of “unimaginable amounts of digital money” since 2007 have caused major distortions. Economic intervention leads to more economic intervention and “the patient is over-medicated.”
Jim says that inflation is not simply the CPI (Consumer Price Index). It is the creation of too much money, which manifests itself in many different ways. Among them are the bull market in stocks, which has been intentionally inflated to create the “wealth effect”. Jim repeats the term “wealth effect” with heavy skepticism. He holds up a gold coin and says:
Gold is a universal currency. People recognize it at sight. The derivation of the term ‘sound money’ is: [clang! as he drops the coin on the table]. Isn’t that lovely?”
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