James Grant, Grant’s Interest Rate Observer, says U.S. policymakers are prolonging symptoms of the recession, adding that the Fed should learn from the 1920-21 Depression.

What’s on Jim Grant’s Mind?

Thu 29 Mar 12 | 04:10 PM ET

Category: Federal Reserve, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Jim Grant on Fed Errors”

  1. CitizenWhy says:

    Unintended consequences coem from any policy.

    One of the many motivations for the Fed to do what it is doing is its mandate to minimize unemployment. Among other reasons, it has felt compelled to keep the Wall Street zombies alive because they employ so many people, especially for elite universities. Letting the market work would have put them all out of business, and thrown thousands of well heeled members of our new nobility out of work (in the liberal northeast, no less). I don’t know, but I would suspect that Grant’s management of the Fed would let that surge in unemployment happen.

    Another of the many reason the Fed does what it does is to shore up pension fund prices (if not values), thus sending bigger checks to the now retired and keeping the rerst from panicking.

    Confidence. The financial system runs on confidence, how ever that can be produced. I don’t know if Grant’s ideas and actions would inspire confidence or cause panic. Depressions are also called panics for good rreason.

    As for being appointed by Ron Paul, I thought Paul wanted to end the existence of the Fed period and return to the gold standard, policies that would have huge unintended – or intended – consequences that would shrink economies, jobs and incomes and further consolidate wealth in the hands of the few.

    Eliminating the EPA, as Paul wants to do, would not exactly improve American life. It would give carte blanche to various (not all) industries with a thirst for pollution and big profits to do as they please. Destroying our ecology is hardly a way to increase the wealth of the US, but it is a way to increase the wealth of a narrow few.

    The Fed and what it does is very problematic. In the words of Rubin the Economic genius who brought us deregulation and lax oversight of what was left. the marriage of big banks and government IS now the system. This is not a good system at all. But we need minds other than Grant’s to point to a new way for the Fed to operate.

  2. super_trooper says:

    Who is James Grant?
    Why shoul I listen to his opinion?

  3. boveri says:

    Jim Grant is a marvelous wordsmith and humorous market cynic.

    We can usually tell he is getting serious when he intones that so-and-so or such-and-such is not following the “intent of the Founders,” which is the perfect signal to quickly switch channels.

  4. sailorman says:

    “Another of the many reason the Fed does what it does is to shore up pension fund prices (if not values), thus sending bigger checks to the now retired and keeping the rerst from panicking.”

    I don’t understand how the Fed policy of exceptionally low interest rates helps pension funds that require high returns from it’s investments. Retired people buy bonds in their retirement fund. These low rates are punishing retirement funds. Many are on the verge of going under.

  5. Greg0658 says:

    sailorman – its not my job to watch all pension funds – my pension moved the goal post – & some large funds, like in the USA automobile manufacturers likewise – to save the company (or funding mech) we/they had to give up promises (hense posts by me below – as well as the dual crashing nova series)
    I also don’t see low rates beneficial in any way but allow’g build-ups* with cheap money** – hense flow to corporate stocks as a method to see any interest accrual in fauxCash BUT thats a BiG BUT corporations control the payback of those accruals AND whether your biggest accrual method exists ie: A JOB near your plantation

    http://www.ritholtz.com/blog/2012/03/good-disruption/comment-page-1/#comment-616133
    http://www.ritholtz.com/blog/2012/03/window-dressing-or-something-more/comment-page-1/#comment-616724

    a bit of a switch up question to the care’g .. if my personal reservoir of future payments were to go away ie: SSI and my pension (method doesn’t matter) is that a boom or bust to TBP economy (in long or short term) what say ye ? .. I would say to start > it depends on location location location

    * and the jobs that come with it
    ** in FED eyes that allowed creation allows the music to play on ie: small interest is really good on that huge pile

  6. Haigh says:

    >One of the many motivations for the Fed to do what it is doing is its mandate to minimize unemployment.

    Deepening and perpetuating the misallocation of resources until what would have been a recession becomes a great depression.