In a recent interview with Forbes, economic commentator and historian Jim Grant warned that we haven’t fully felt the inevitable fallout from the “free money era.”
I think that the consequences of more or less 10 years of proverbially free money are going to play out in the credit markets.”
All eyes are on the Federal Reserve, and people are wondering, what will it do next? The messaging coming from the central bankers is that they will need to keep interest rates higher for longer. But is that possible given the economic conditions and all of the debt in the economy?
Investment and economics writer Jim Grant appeared on CNBC’s Squawk Box to discuss the Fed’s inflation fight and its impact on the economy. He said we ask too much of the central bankers. After all, they are only human.
In a recent podcast, Peter Schiff warned that we could be on the verge of a further breakdown in the bond market and that a bear market in bonds could also maul US stocks and the dollar.
Financial commentator and investment guru Jim Grant has similar concerns. In a recent interview on Odd Lots Podcast, Grant said he thinks we’re at the beginning of a long-term trend of a weak bond market with higher interest rates that could last decades.
With the rate of increase in the CPI slowing, many people in the mainstream think the Federal Reserve is winning the war on inflation. In a recent podcast, Peter Schiff said this is wishful thinking. He said that the Fed is losing the war and it will ultimately surrender to inflation.
Schiff is not alone in his thinking. In a recent interview with The Market NZZ, investment guru Jim Grant argues that we have not seen the last of this inflationary outburst because inflation has become deeply rooted in the global financial system.
Dallas Federal Reserve President Robert Kaplan has been one of the more hawkish Fed members. On Aug 11, he said the Fed should announce a quantitative easing taper in September and begin slowing asset purchases in October. But two weeks later, Kaplan backed off that assertion, saying that with the surge of COVID-19, he was open to adjusting his view. In an interview on CNBC’s “Squawk Box,” financial analyst Jim Grant explained why the Fed is playing with fire.
Federal Reserve Chairman Jerome Powell insists inflation is “transitory.” As prices have spiked throughout the economy, Powell’s messaging has essentially been, “Move along. Nothing to see here.”
Peter Schiff has been saying the central bankers at the Fed can’t actually tell the truth about inflation because even if they acknowledge it’s a problem (and it is) they can’t do anything about it.
In a recent talk, Jim Grant, investment guru and founder of Grant’s Interest Rate Observer, echoed Peter, saying the Fed can’t control inflation.
When the Federal Reserve artificially manipulates interest rates, it’s messing with our minds by distorting important signals that prices provide in a free market. As investment guru Jim Grant put it in a recent article in Barron’s, central bank interest rates are nothing but crude price controls.
Like all price controls, the Fed’s interest rate mechanizations create some winners and some losers. But in the long run, the distortions caused by the central bank’s interventionist monetary policy makes us all losers.
Jim Grant recently appeared on the Santelli Exchange on CNBC and the conversation quickly turned to this notion that “intellectuals” have the wherewithal to run the economy. Friday Gold Wrap host Mike Maharrey recently explained two very important economic principles that make it impossible for central planners to ever truly succeed. As he put it, they might be smart, but they aren’t smart enough to know they’re not smart enough. Nevertheless, this doesn’t seem to dampen the fatal conceit and hubris of central bankers who think they can micromanage a complex economy.
Grant put it another way. He called it the ignorance that knows not it’s ignorant.
In a recent interview with CNBC’s Rick Santelli, investment guru Jim Grant talked about the Fed’s sudden about-face when it comes to its balance sheet reduction program, as well as the phenomenon of negative interest rates. In short, Grant said the central banks have done us “no favors.”
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