Category Archives: Grant’s Interest Rate Observer
Jim Grant, author of Grant’s Interest Rate Observer, first hinted last week that not all is well when it comes to the world’s biggest hedge fund, Ray Dalio’s $160 billion Bridgewater (of which one half is the world’s biggest risk-parity juggernaut). Speaking to Bloomberg last week, Grant said he was “bearish” on Bridgewater because founder […]
Authored by Jim Grant of Grant’s Interest Rate Observer, Central banks are printing rules almost as fast as they’re printing money. The consequences of these fast-multiplying directives — complicated, long-winded, and sometimes self-contradictory — is one topic at hand. Manipulated interest rates is a second. Distortion and mispricing of stocks, bonds, and currencies is a […]
Courtesy of Grant’s Interest Rate Observer
For those bored with watching how much higher Getco and Citadel’s algos can take the market on a resolution that is adverse for the US economy, that cuts consumer spending and cash flow, that does not address the real issue: government drunken sailor spending, and that means America will now labor for the next two […]
Gold surged higher in all currencies today which saw gold reach new record highs in euros, Swiss francs and Brazilian real.However determined selling blocked the moves higher and prices are back at the levels that they started the day. Today’s AM fix was USD 1,773.75, EUR 1,361.28, GBP 1,089.19 per ounce.Yesterday’s AM fix […]
Yesterday, when discussing the forthcoming implications of the Libor scandal, we said that in the barrage of coming lawsuits, “the entity that will be sued by proxy is the Federal Reserve, whose Federal Funds rate is really the setter for the baseline Libor rate.” This claim came at an opportune time, just hours before one […]
Munch’s “The Scream” may be all the rage today, but to Jim Grant, in his latest interview on Bloomberg TV, the record price paid for the painting is not so much a manifestation of modern art as one of modern currency: “This is the flight into things from paper” . Thus begins the latest polemic […]
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Welcome to Capital Account. Last month, the federal reserve bank of new york invited some of its critics, including our guest, to, as he put it "unburden themselves of their criticisms." The text of his remarks was published in the March 23rd issue of Grant’s, and it is most certainly worth reading for those who are wise enough to subscribe. There are a number of points that James Grant makes in his remarks that we have repeated ad nauseum on this show ourselves: accountability for bank executives, a functioning price mechanism, sound money…you know…capitalism.
But the editor of Grant’s Interest Rate Observer also makes another interesting proposal with respect to what he would do if, by some act of market revenge, he were made Chairman of the Monetary Priesthood. He would, as he put it: "commission, staff, and ceremonially open the Fed’s first Office of Unintended Consequence."
Economics is, after all, a social science, and as such, is beholden to the unintended consequences brought about by the actions of the observer as much as by those of the subject being observed. Imagine if we designated responsibility for precipitation and cloud cover to executives at "The Weather Channel?" Even if this new politburo had the best of intentions, would you feel comfortable ceding control of the weather to a group of 12, unelected, and highly fallible, human beings?
We think not, and if you believe the weather system is not a fair comparison to the system of money and credit, we would beg to differ. The weather, as well as the economy, are both chaotic systems. They are dynamic, and they are organic. They are not well oiled machines to be manipulated and driven from point A to point B at the discretion of some ceremonially chosen motorist, no matter how pure or benign his intentions.
But how would the economy function without the central planners and their open market operations? How would the sacred rate of interest be determined without the shepherds at the Fed? Surely there must be someone to guide the economy…
To help guide us in our pursuit of answers on this, and other topics, is Jim Grant, author and editor of Grant’s Interest Rate Observer.
James Grant, of Grant’s Interest Rate Observer makes some thought-provoking statements in his must-listen Bloomberg Radio interview with Tom Keene today. While noting America’s exceptionalism (h/t Clint Eastwood?), he perhaps doesn’t mean all American…