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Jim Grant Is Confident QE 2.0 Is Just Around The Corner
Jim Grant, one of the most respected voices in the financial industry, joins Zero Hedge and others, who see that the only choice the Federal Reserve has now that the temporary and shallow reprieve from the clutches of the deflationary depression is over, is to print more money in the form of another iteration of QE. Whether this will be another $2.5 trillion, like last time, which was the price of an 18 month delay of the inevitable, or a $5 trillion concerted global effort, as Ambrose Evans-Pritchard believes, is irrelevant: the only option the central printers, pardon, bankers, have left is to flood the market with yet more worthless paper (keep an eye out on the doubling in the price of gold the second QE2 is publicly announced, which will also double as the obituary for all fiat paper). In an interview with Bloomberg TV, Grant says that the first order of business tomorrow when the Fed's new additions officially join their new groupthink perpetuating employer will be "to try once more to print
enough dollars to make something happen in the U.S. economy.” The ever-sarcastic Grant manages to completely skewer Janet Yellen, Steve Diamond and Sarah Bloom Raskin, to ridicule the Fed's 100% track record of not only focusing on the wrong thing time after time, but getting the response consistently wrong with 100% precision, and also manages to makes fun of the Fed's credentialed WSJ lackeys, who courtesy of the Fed's "editorial" control over the reporting process, get a direct line into leakable Fed strategy.
Grant's thoughts on new Fed additions:
"I think the first order of business will be to try once more to print enough dollars to make something happen in the U.S. economy.”
On San Francisco Fed President Janet Yellen:
“Janet Yellen has had 36 opportunities to vote on monetary policy at the Federal Open Market Committee and she has voted ‘Aye, yes’ 36 times. 36 for 36 times. Now, has the Fed been right 36 consecutive times? No. I think that Janet Yellen is a well credentialed, consensus-hugging economist straight out of the Fed HR department. She is ideal from the point of view of the Fed bureaucracy. She will make not one ripple.”
On MIT economist Steve Diamond and Maryland state banking regulator Sarah Bloom Raskin:
“I’ve never met them but I suppose they are charming. They certainly are well credentialed. They may well have an avocation in monetary theory, but that is not their vocation. Their vocation, in the case of Professor Diamond, is fiscal policy, pensions, social security, he is an authority. He's mentor of Ben Bernanke so he’s a formidable academic.”
"Sarah Bloom Raskin is a formidable regulator. But neither is a formidable thinker about the nature of money or about the history of money or about how the Fed might paradoxically make things worse by doing what it does trying to make things better, which I think is the great question. These are people who, I think, are unlikely to oppose novel solutions to our fundamental monetary dilemma which is that the U.S. dollar is a faith-based currency of no intrinsic value that is manipulated by the Fed and the consequences of the manipulation are often quite different from what was intended. That’s the problem.”
On Fed monetary policy:
"Deflation is a funny thing. It's a word that is much in the news, much in the markets, but is all too infrequently to find. So the Fed says that deflation is broadly declining prices. But could not also be progress? In other words, if the world produces more at lower prices, is that so bad? Americans spend half of their weekends, it seems, looking for bargains.”
"So the Fed is telling us that bargains galore is something that the Fed must resist with radical volumes of credit creation… I guess what I would ask the Fed is would it please stop and help us understand why this is bad? So in 2002 and 2003, Alan Greenspan, then chairman, and Ben Bernanke, then a newly fledged governor, were out giving speeches saying that deflation is a clear and present danger, and we must - they said at the Fed - must cut rates dramatically, which they did to 1 percent."
"But the price indices today are much weaker than they were in 2003. So where is the Fed? Why not broach the topic of deflation again?"
"So what I blame the Fed for, among other things, is a lack of intellectual rigor and forthrightness."
On Federal Reserve Chairman Ben Bernanke:
"I think this is not being forthcoming with us, the people, about the nature of his concerns."
"In 2003, he was all deflation all the time. Well now the Cleveland Fed's median CPI was like 1.7 percent year-over-year, now it's 0.5 percent year-over-year. So where is the concern?"
"I think the concern will surface. We'll see more on Friday when the CPI comes out. But I think something ahead of the markets is a likelihood of the Fed stepping on the gas once more, so called quantitative easing - I think that's likely to happen…The Fed is already clearing its throat. You can see this in the newspaper leaks."
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She's not that hot, honestly. The hottie IMHO is Susan Lee (?) from Hong Kong and Diedre, though Diedre does have man hands.
She is a naturally beautiful woman. Not some fake, plastic fox news chick. I used to think like you until I worked at A&F and learned how to determine the true attractiveness of a woman. The key is whether or not they are natural. If they have no makeup on, will they still be beautiful? Most won't. She doesn't need to show off her body or paint on the make up, she's got the natural look and that's what counts. I think Bloomberg made a smart move giving her the 10a-12p time slot. She's dominating her old network cnbc and she actually living up to her potential. Not only is she beautiful but she's smart. You will respect her BEAUTY!
dude, go steam one off in the shower and move on.
That is what I do after 12pm. But I don't wack on a quacker.
@Douglas
No! To me please...please.
Incredible. Did this guy, who you call one of the most respected guys on Wallstreet, just argued deflation is good?
It's about the worst thing that could happen right now:
http://shareholdersunite.com/2010/07/15/jim-grant/
One more example finance guys and macro-economics makes for one of the most toxic combinations possible.
HA that gal's expression at 3:00 to 3:01 was classic... she was so ready to head back to her cougar life account and look for some new young meat to spice up her day from that gloomer
I think she was just shocked that big name Economist said that. She's not stupid, she knows how it works. You can tell by the little grin she gives right after. It's almost like subconscious expression of respect for this guys willingness to speak the truth. LOVE HER!
Deflation is good because it wipes out debt, unlike inflation which supports debt.
Good god look at those legs! AMAZING
Beautiful skin tone, legs, ankles, face, smile, personality, intelligence. I'm going to walk in there tomorrow and ask her to join me on ZH for some midnight blogging.
QE 11 but only after..'How I learned to accept falling prices and embrace deflation' by BB.
NOONE HAS TALKED ABOUT THIS ON ZERO HEDGE YET ????
http://www.telegraph.co.uk/finance/markets/7884272/Secret-gold-swap-has-spooked-the-market.html
This is it ... It is The Time for QE II.
1.) Obama ultimately wants to be Crisis President (Bush caused)
2.) He uses Crisis to enact FDR-like regulations, give aways, new WPA, etc (more power to Gov).
3.) So I believe he wants major $ Crisis (ala Saul Alinsky) ... Hyperinflation is good
4.) So why not take a chance ... QE II will cause some kind of major problems
5.) If QE II gets going in next 4.0 months and stock market peeks on Nov. 1, Congress may be reelected ... real upside he becomes Ruler with no opposition for two years
6.) If QE II gets going and does not work, unintended consequences, The Crisis results and another opportunity to be used ... as in 1933, Gold is confiscated (FDR as cover), then all fiat on the horizon as far as the eye can see with US dollar toast and we devalue and reduce debt
7.) There are no downsides for Admin (When the ends justify the means and cannot be proven then anything can happen)
8.) Krugman and other surrogates are pumping up the idea of a must-have stimulus to "create jobs".
9.) Helo Ben and FED board echoes need for more printing
10.) At G20, Obama scolds G19 for even thinking about austerity. And I believe he issue 'command' the we QE ourselves where and when we need it.
11.) GDP on Friday ...... Buy AU options for 2 day hold and 1000% return. (Alt: Market goes down all next week and Gov must step in with QE II.)
12.) QE II on July 17-18 or (Alt: Jul 24-25) .
13.) QED
As warned about for some time... EURUSD daily chart is bullish.
http://stockmarket618.wordpress.com/about
There is a misquote: Grant says "propose" not "oppose"
"These are people who, I think, are unlikely to "propose" novel solutions to our fundamental monetary dilemma which is that the U.S. dollar is a faith-based currency of no intrinsic value that is manipulated by the Fed and the consequences of the manipulation are often quite different from what was intended. That’s the problem.”
QE 2.0 smells a lot like how it got started in 1923 Germany. Weren't they "forced" into printing money for war reparations? Certainly they didn't set out with the intent of making their currency worthless, but once you start down that path where do you draw the line?
Grant is the best .... the bow tie is the clincher
Fuck the FED!
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