Jim Grant: Fed’s Doctrines Are Heresies!

20121003_grant_0The Interest Rate Observer’s Jim Grant, one of our personal favorite critics of the Fed, was back at it this week on CNBC, blasting Janet Yellen and the Fed’s long-held doctrines as “Heresies!“. 
Regarding Yellen’s claims that the US economy is improving, Grant eloquently pointed out that she “did not touch on the moral quandary that low interest rates introduce into our country - grandmothers, grandfathers, savers are figuratively on their hand and knees and rooting around in bushes and between sofa seats for lose change on which to sustain themselves.”
Well said Jim, will said.  
Grant’s full MUST WATCH interview is below: 

 

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Comments

  1. The 4 Jim’s of the financial Armageddon. Well done Docs.

    • Sinclair, 
      Rogers,
      Grant…
       
      Drawing a blank here, Strannick, Help Me Out! 
       
      This is going in my FAVORITE COMMENTS SECTION  lol 
      GREAT STUFF!  
       
      oops, I looked right and saw it. JIM WILLIE!

  2. When the people have to start digging in the garbage to eat(around mid summer) the SHTF hunger is an amazing thing to drive people to action.

  3. Properly, interest rates are a … response … to high or low economic activity. They are … NOT … in any way, shape or form, a ‘tool’ to ‘steer’ economic conditions.

    Only self-aggrandizing bankers and egotistical governments craving control of societies, see any ‘sense’ in the latter view.

  4. IMO, the financial wipe out of retired people in only part of the problem.  Many of them have invested their savings in interest bearing investments and the return on these issues are not even keeping up with inflation.  This is likened to the farmer having to eat his seed corn to survive in the short term.
    Other big problems are as follows:
    1. The financial markets are obviously being manipulated with a net affect of creating a frighteningly dangerous one way markets that causes most stock and bond investors to improperly manage their portfolios by not accumulating the normal profits that would sustain them in bad markets. And one day an exogenous event will frighten the herd and the stampede will result in everyone attempting to get out the door at the same time.  This is the making of a dangerous financial crash.
    2. The rate of inflation that the Fed reports is 2 percent, while the actual inflation is at least 8  percent and worsening as the gigantic recent money creation continues to do its damage.  As a consequence, small business, the sector that creates the most jobs in a recovery, is being deprived of their normally improving prosperity after a recession. This has caused the closure of numerous small businesses and has an enormously bad affect on job creation as their level of business is even or declining and as a consequence, there is no incentive to engage in new hiring.
    The overall consequence is that small business, the working poor and the middle class are being impoverished for the benefit of the well healed.  This is a road trip that will end in economic disaster.

    • “Although historians do not advertise the fact, a lot of pension funds went bankrupt in the 1930’s, and the remaining ones had to scale back the amounts they had contracted to pay to their pensioners. Economists failed to offer an explanation for this universal phenomenon. Yet the explanation is clear: the accumulated capital of the pension funds was badly impaired, and in some cases completely wiped out, by the falling interest rate structure. Exactly the same causes are operating right now, (2010) and exactly the same effects will follow. The only difference is the larger scale of capital destruction in the present episode.” –Antal Fekete

      The core of all these ills is the banknote scheme itself and every time it faces Debt Saturation, forcing a downward spiral of interest, the savers are always ‘sacrificed’ to preserve the damned scheme. This time will be no different. We’re already seeing the global legislative set-up for it.

  5. “… “did not touch on the moral quandary that low interest rates introduce into our country – grandmothers, grandfathers, savers are figuratively on their hand and knees and rooting around in bushes and between sofa seats for lose change on which to sustain themselves.”
     
    Indeed.  But it is LOOSE change, not “lose” change.  Lose change is what happens when one has a hole in their pocket.  ;-)
     
    I have been a Jim Grant fan for a long time now and he is one of the best people to listen to on financial matters.  I watched this interview live on CNBC and again here.  Both were time well spent, IMO.
     

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