Citing deepening concerns of a crash in sovereign debt, our favorite critic of the Federal Reserve has turned “Very Bullish” on Gold prices…

 

Submitted by Mark Obyrne, Goldcore:

Jim Grant is “very bullish on gold” due to deepening concerns of a crash in sovereign debt. The monetary historian and expert, financial journalist and editor of the investment newsletter ‘Grant’s Interest Rate Observer’ is always worth reading and listening to.

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Grant gave voice to his deepening concerns in an excellent interview with  Swiss business newspaper ‘Finanz und Wirtschaft’ (Finance and Economy):

“From multi-billion bond buying programs to negative interest rates and probably soon helicopter money: Around the globe, central bankers are experimenting with ever more extreme measures to stimulate the sluggish economy.

This will end in tears, believes James Grant. The sharp thinking editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» is one of the most ardent critics when it comes to super easy monetary policy.

Highly proficient in financial history, Mr. Grant warns of today’s reckless hunt for yield and spots one of the biggest risks in government debt. He’s also scratching his head over the massive investments which the Swiss National Bank undertakes in the US stock market.”

As to what investors should do to protect themselves from this risk, Grant is very clear:

“I’m very bullish on gold and I’m very bullish on gold mining shares. That’s because I think that the world will lose faith in the PhD standard in monetary management. Gold is by no means the best investment. Gold is money and money is sterile, as Aristotle would remind us. It does not pay dividends or earn income. So keep in mind that gold is not a conventional investment. That’s why I don’t want to suggest that it is the one and only thing that people should have their money in. But to me, gold is a very timely way to invest in monetary disorder.”

 

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  1. What endgame is playing out here is that over 50 years America’s industry has been slowly been transferred to other country’s so American’s would be none the wiser!!!!

    It’s part of the Federal Reserves long goal plan to transform America!!!!!

    Obummy has done his part in over regulating everything he can get away with and now the leading industry is McDonald’s and Nike!!!!  WHOOPIE!!!!

    WAKE UP AMERICA!!!!!!!!!

    It won’t take many more trips OFF the golf course for obummy to finish destroying America!!!!

    Without leading industrial company’s building their plant’s here there is no reason to deregulate or lower taxes if the industrial company’s do not want to do business with America!!!!

    And that is the rest of the story!!!!!

  2. Gold doesn’t pay interest is both untrue(gold lease rate) and becoming obselete as an argument as more and more bonds pay little or NEGATIVE interest.  Negative interst rates encourage deflation and kill banks.  Helicopter money will be needed.  Question is do they have to allow a crash first to justify it.  Once they do start chopper money the hyperinflation will not be far off.

    • http://www.theatlantic.com/business/archive/2012/03/the-hyperinflation-hype-why-the-us-can-never-be-weimar/254715/

       

      Right now getting the markets to buy our debt isn’t the problem. Getting enough debt for the markets to buy is the problem. Investors are so crazy to load up on Treasuries that they’re actually paying us to borrow, taking inflation into account. But while we’re currently getting free money from investors, Hungary circa 1945 was getting no money. It was an investment pariah. If Hungary wanted to rebuild its economy, its only recourse was the printing press.  

    • Helicopter money is expanding the fiscal deficit and monetizing the bonds.  I’m not even going to bother reading the article.  They will massively increase the supply of bonds through ever increasing deficits.  Saying somthing is “impossible” because their is “not enough” of something that can be created at will without limit is um…..  Whatever.  Have a nice day.

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