Jim Grant And James Turk Discuss The Endgame Of The Keynesian Experiment

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Tue, 05/31/2011 - 13:43 | 1325849 OutLookingIn
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For any meaningful return to a gold standard, the old currency system now in use would have to be completely destroyed.  

Tue, 05/31/2011 - 13:53 | 1325895 luk427
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Why do we have to destroy it? It will implode all by itself.

Tue, 05/31/2011 - 17:48 | 1326682 Alpha Monkey
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This green bow tie guy has questions about a standard that fits the criteria of his idea of money?  He should read the Gold Traill, by FOA.





Tue, 05/31/2011 - 15:28 | 1326160 Turd Ferguson
Turd Ferguson's picture

Hmmm... "The End of The Great Keynesian Experiment".

Where have I heard that before? Can't quite place it...

Tue, 05/31/2011 - 19:11 | 1326941 Fiat2Zero
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Turd you are officially "Internet Famous"

Tue, 05/31/2011 - 21:44 | 1327294 The Profit Prophet
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From me....about two years ago on Business Insider.  Did you run with it Turd and call it your own?

T.E.I.N. everyone!

Tue, 05/31/2011 - 21:33 | 1327265 Gold...Bitches
Gold...Bitches's picture

"We had to destroy the village in order to save it"

Tue, 05/31/2011 - 13:40 | 1325854 Azannoth
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A Green bow tie, honestly!!! And people wonder why no1 takes the gold standard seriously

Tue, 05/31/2011 - 13:53 | 1325900 Henry Chinaski
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The tie and hornrim poindexters killed it for me.  Can't watch. 


Tue, 05/31/2011 - 13:55 | 1325922 Tyler Durden
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Anyone even remotely familiar with the predictive record of Grant takes him seriously precisely due to this green bow tie.

Tue, 05/31/2011 - 14:28 | 1326020 Bastiat
Bastiat's picture

I'll listen to Jim Grant any day, bow tie and all.

Tue, 05/31/2011 - 15:28 | 1326156 Imminent Crucible
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What I have to wonder is, If you're not familiar with Jim Grant and his record, why are you even on this site?

Those who don't recognize Jim Grant would we well advised to do nothing but shut up and listen for the next two or three years.

Tue, 05/31/2011 - 15:26 | 1326162 Turd Ferguson
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Tue, 05/31/2011 - 16:11 | 1326303 disabledvet
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you got 800 bucks a month?  i think that's GIRO's price.  Plus we have to entertain and be brilliant.  Far harder.

Tue, 05/31/2011 - 15:51 | 1326221 MrSteve
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That and the fact Grant has interviewed Sidney Homer, who literally wrote the book on bond trading and yields. Find a copy of Homer's History of Interest Rates and get smart.

Tue, 05/31/2011 - 20:01 | 1327076 Kayman
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These are the same mental midgets that would tell Einstein to get a haircut.

Tue, 05/31/2011 - 20:23 | 1327127 baby_BLYTHE
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Jimmy Rogers rolls with the bow tie quite well. More of a signature for him than Grant, IMHO

Tue, 05/31/2011 - 14:08 | 1325969 Medea
Medea's picture

Good argument.

Tue, 05/31/2011 - 14:11 | 1325975 Cynthia
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The green tie may not be appropriate, but the gold curtains are.

Tue, 05/31/2011 - 14:16 | 1325982 JW n FL
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I have a Ralph Luaren Purple pant and jacket with a green silk shirt!


if you dont get how gangster green and purple are you are just not a gangster! no 2 ways about it!

Tue, 05/31/2011 - 14:29 | 1326014 ISEEIT
ISEEIT's picture

A gentle slap:

Perhaps it could be that the 'modern' infatuation with appearences and focus on the messenger, rather than the message is part of the problem? America today has maybe been dumbed down to the highschool level of social intercourse?

When all of the 'right talking, rightlooking' people have so miserabely failed you...

Insanity is repeating the same action and anticipating a different result. (garbled, I know).

Love ya.

Tue, 05/31/2011 - 15:12 | 1326126 plata pura
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There be a pamphlet "The World as it is" by one chris hedges

Tue, 05/31/2011 - 15:34 | 1326163 Monedas
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My favourite people wear bow ties.....Jim Rogers, Pee Wee Herman (?), Soupy Sales (?), Marc Faber (?), Krudlow (?) ! I'd wear one myself but since I don't wear shirts it might be a problem ! Just cut offs and poor man's baja sandals (old loafers with the toes cut off)! Monedas 2011 A good box cutter works fine for cutting out the toe of the shoe....what a versatile little tool ! http://trololololololololololo.com/

Tue, 05/31/2011 - 15:43 | 1326199 spekulatn
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 Marla is that you?

In any event, well said ISEEIT.

Tue, 05/31/2011 - 20:00 | 1327065 ISEEIT
ISEEIT's picture

My very first ZH validation! I'm excited (really, thank you)

No Marla here though.

I will push it however and state that if Marla doesn't show up shortly after walking through the 'gates', I'm going to get suspicious and ask for a link to ZH.

Tue, 05/31/2011 - 20:08 | 1327084 Kayman
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Somehow a bit of cleavage is supposed to make the MSM bullshit taste better.

Tue, 05/31/2011 - 13:55 | 1325925 PulauHantu29
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I suggest Andrew Gause's book on the monetary system for a good grip on history of money. It's old but thorough. He has some sort of radio show and has a detail knowledge of the history of money.

Tue, 05/31/2011 - 13:59 | 1325928 Cynthia
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Paul Krugman and other Keynesian economists are right to argue that using monetary policy to depreciate the dollar has the effect of boosting exports, thus boosting domestic employment.  But they are wrong to assume that this always works. This only works if our multinational corporations are penalized for shipping jobs overseas and if we were still producing more than we consume, as was the case throughout most of the Industrial Revolution. So until we restore our producer economy and get back to treating our workers as assets rather than as liabilities, no amount of depreciation of the dollar by the Fed will get our employment numbers back to pre-recession levels!

Tue, 05/31/2011 - 14:21 | 1325993 Scarlo
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Makes sense.

Tue, 05/31/2011 - 14:29 | 1326013 Libertarian777
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the SHORT term effects of a depreciating dollar on exports works for a while until the inflation boomerang circles back and hits you in the face.

Why? Depreciate the currency (that oil and commodities are priced in), so your exports get boosted. You make excess profits while your input prices are locked in. However the inflation in commodities (inputs) rises globally, and since its priced in US$, its price goes up (in US$). Since its a global commodity marketplace, producers, even in the US will have to compete with the global markets to purchase those inputs, at now higher prices (as a copper producer, will you sell to a US manufacturer at below a price a guy in China is offering?)

So eventually the input prices have to factor in the inflation that has just occurred due to the depreciaton.

In fact this is exactly what TD has been mentioning about Apple's (and SP500 companies') margin compression.

It's like a HELOC on a house that you own free and clear. Feels good in the short term, because you get a cashflow, until the cashflow stops, then you have no asset (house) and no cashflow, plus you now owe interest.

Currency depreciation never works. If it did, why don't we just debase the US$ and reissue a new US$ at 1:100, then exports will go up 100 times! everything will be solved!

Ask Belarus how that's working for them. All their problems are solved now since they depreciated their currency. Exports are up 40% (in nominal terms).

Tue, 05/31/2011 - 14:31 | 1326019 PulauHantu29
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Sounds reasonable. Proding nothing of value seems to result in a false rise in the GDP and predict a bad ending, as many economists have stated.

Tue, 05/31/2011 - 14:32 | 1326038 narnia
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Economics 101: Money & Prices by Murray N. Rothbard



Tue, 05/31/2011 - 15:07 | 1326114 plata pura
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well post'd; end corporate personhood

Tue, 05/31/2011 - 17:16 | 1326616 gwar5
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I'd have to disagree. Nobody has been more wrong than Krugman and the Keynesians, especially about Keynes. Keynes is rolling over in his grave at what is going on.

Depreciating the dollar has led to a downward spiral resulting in real wages and living standards going down. On the other hand, a strong dollar is a competitive advantage because we could buy raw materials at lower relative cost to offset the high dollar and low wage competitors in China and Cambodia. We could use any advantage we can get. We can never compete on wages alone.

Imagine if China revalued the Yuan 40% higher, like Geithner wants. A strong Yuan. They could then buy oil and other raw materials at a 40% discount to everybody else, in addition to their already low labor costs. They could still keep prices low enough to offset the higher Yuan values and they could wipe everybody out.

And it's a mistake to-- "Penalize companies for shipping jobs overseas"

Instead, we should REWARD companies for bringing/keeping jobs to America with a low corporate tax rate and a business-friendly environment. We are currently penalizing them for staying not for leaving. We have the highest tax rate in the world and have a business hostile environment that is extreme pro-union and also extremely left wing environmentalist.

Workers are going to have to demand less pay, work harder, or demand that the government tax their corporate employers less and reduce the regulations put upon their employers. Workers can't expect their employers to pay wages more than the company can produce carrying the governmental burderns.

Tue, 05/31/2011 - 20:14 | 1327107 Kayman
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 "We have the highest tax rate in the world."

You are right about Keynes but the tax loopholes/allowances wipe out the effective tax rate. 

Tue, 05/31/2011 - 14:06 | 1325961 JW n FL
JW n FL's picture



I <3 FIAT PAPER!!!! Bitchez!!! no one will ever come between me and my one true Love Paper!!! all of you ha8terz!!! can just keep all that NON-FED printing to yoursleves!


Hold on to that Paper!

if the Fed Printed $3 trillion in debt.. and another $15 Trillion in Loans (this does Not! include swap windows and TARP / TALF and so fucking on...) over three years..


$18 Trillion divided by 3 years ='s $6 Trillion in New Supply is Printed a Year!


$6 Trillion Dollars divided by 365 days ='s $1,643,835,6164 a Day in in New Supply is Printed a Day!!


$1,643,835,6164 Billion a Day divided by 24 hours in a Day ='s $684,931,506 an hour in New Supply is Printed an Hour!!!


http://goo.gl/FnxBZ  Treasury Direct $14 Trillion Debt

http://goo.gl/TMl74   $15 Trillion in Loans

http://goo.gl/EXzal  / ='s $29T



so, you hold on to your paper while my Gold and Silver dont rise in price.. Good Luck with that program!




No cash to pay your debts? We'll take your gold, Greece!


Tue, 05/31/2011 - 14:11 | 1325966 luk427
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“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: Account Overdrawn.” ~ Ayn Rand, from “Hymn to Money”

Wed, 06/01/2011 - 03:28 | 1327745 Tedster
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How much you want to bet Alan G. wrote that part? It dovetails nicely with the 1966 article he wrote "Gold and Economic Freedom" and of course everyone knows they hung out together. Seems obvious now.

Wed, 06/01/2011 - 03:25 | 1327746 Tedster
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How much you want to bet Alan G. wrote that part? It dovetails nicely with the 1966 article he wrote "Gold and Economic Freedom" and of course everyone knows they hung out together. Seems obvious now.

Tue, 05/31/2011 - 14:12 | 1325980 Bay of Pigs
Bay of Pigs's picture

Great stuff. Very informative, educational and spot on. Grant and Turk know their financial history. The Keynesian comics, clowns and retards so prevelant today have no historical grasp on the topics these men talk about. None.

Gold Bitchez.

Tue, 05/31/2011 - 14:22 | 1325994 Piranhanoia
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situational buying, or, speculation, is the main driving force,  or swimming away from the whirlpool that is the porcelain oracle of flush?

What about a story on what the big players are doing behind the scenes?   Are the rich ready to move to their farms?  are they there now?   Are islands being fortified?  Or is everyone heading for Abu Dhabi and a condo?    Will there be a Serbia section, Berlusconi's Bunga-Bunga retreat?

It would be nice to know who's backing up their statements.

Tue, 05/31/2011 - 14:44 | 1326059 New American Re...
New American Revolution's picture

The real question is whether the next gold standard they are talking about is a 'classic gold standard', or a 'phony gold standard', the difference being one where the average citizen can change his gold reserve certificate (paper dollar currency) for specie (gold coin) being the former 'classic gold standard', or the latter, a phony gold standard (i.e. Bretton Woods or the post WWI English Pound Sterling gold standard).   

The difference is huge as the former leaves the control of money supply in the hands of the Nations citizens and the latter allows for the same ol' money pump built around a 'reserve currency', where everything is all right as long as everyone (nations) inflate their currencies in concert with one another and governments continue to operate the fiat paper money scam until they destroy the phony gold standard, at which time, this time around, all of America's money will be gone and we are forced into a monetary system along the lines of the 3rd Riech.

Maybe Barry Soetoro will stick around for that round by altering the Constitution to extent terms of 'service' ala' Venezuala.

Tue, 05/31/2011 - 15:03 | 1326105 AgShaman
AgShaman's picture

I'm sure it's probably just a "placebo effect"....since I've assassinated a good number of brain cells in my lifetime, but I do feel a few percentage points smarter after listening to these 2 Cats with such a good grasp of monetary history.

Turk has some good interviews indeed. His recent one with Egon Von G. was also quite good I thought.

Thanks ZH for bringing them forth.

Tue, 05/31/2011 - 15:16 | 1326129 GFORCE
GFORCE's picture

Lose the bow tie douche!

Tue, 05/31/2011 - 16:50 | 1326511 Shell Game
Shell Game's picture

Lose being a pawn to visual staging.

Tue, 05/31/2011 - 20:22 | 1327117 Kayman
Kayman's picture

Lose the bow tie douche!

GForce, with that powerful insight of yours, perhaps you could go to the movies with PeeWee Herman, while the adults have an intelligent discussion.

Tue, 05/31/2011 - 15:33 | 1326172 hampsterwheel
hampsterwheel's picture

He presents a good arguement but discounts the master plan - collapse each Country's fiat system (hopefully all at one time) and go to a new and improved global fiat using carbon credits as the taxing mechanisim for wealth redistribution. A new global fiat will kick the can down the road for a good 40 more years; this video series lays it all out...  - http://www.swarmusa.com/vb4/content.php/291-Renaissance-2-0

Tue, 05/31/2011 - 15:52 | 1326236 tejbear
tejbear's picture

Austrian Economics works, Keynesian economics works,… for a while... But both fail in a rigged game.   China, by keeping the “value” of Yuan cheaper than the dollar, is doing an end-run around these theories. China’s currency manipulation is essentially economic guerilla warfare against the USA. Heads: China wins, tails, the USA loses. Who can blame China? They just took a winning routine out of Japan’s play book. The USA government either doesn’t have the balls to confront China on this point, or more likely, in an effort towards NWO, doesn’t want too.

Tue, 05/31/2011 - 16:46 | 1326505 Shell Game
Shell Game's picture

Great interview. Thanks, Tyler.

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