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Jim Grant Refuses To Get Lost In A “Hall-Of-Mirrors” Market
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
The bow-tied-and-bespectacled bringer-of-truth was on Bloomberg TV this morning providing his own clarifying perspective on what we should hope for (and what we should not) from J-Hole this weekend. Jim Grant's acerbic comments on Krugman's view of the world, on the gold standard as a "force for growth and stability", and the "unproven and truly radical methods" of the SNB and Fed, pale in significance when he is asked about the stock market distortions: "I think we live in a hall of mirrors in finance thanks to the zero interest rate regime and the chronic nonstop interventions," and when asked when Bernanke should start raising rates, the simple (yet complex) response is "Last Year! And Eric Rosengren would be in a different line of work." Must watch to understand the central-banker-meme-du-decade.
Grant on what the Federal Reserve needs to do now to get new best practices:
“It needs to get out of the central planning business. The Fed was organized in1914 and opened its doors to conduct a more or less traditional central banking business, meaning it would lend against good collateral to solvent institutions in times of cyclical or seasonal need. It would defend and protect the gold dollar. That was all that its original remit contained. fast forward many decades, and we see the Fed in the business of steering, guiding, manipulating the economy, financial markets, the yield curve. It manipulates and pegs interest rates. It is all over the joint doing what failed in the old eastern bloc.”
On whether the U.S. needs a more rules-based central bank to provide discipline and protection:
“What we need is a central bank that has the humility not to do what it cannot do. And the Fed cannot do what others have failed to do, namely to plan an economy from a central desk in the capital city.”
On the Swiss national bank:
“The Swiss national bank is a little bit like the Fed in that it is undertaking unproven and truly radical methods. It is also a sign of the times that it has to go in and buy astonishing amounts of euros to suppress the appreciation. What we need is currency stability, and we need objective value in currencies.
…
2012-08-29 12:26:58
Source: http://www.philstockworld.com/2012/08/29/jim-grant-refuses-to-get-lost-in-a-hallofmirrors-market/
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