Jim Grant Asks The "PhD Standard" To Allow Markets To Finally Clear

Tyler Durden's picture


It is apparent, according to Jim Grant in this excellent discussion on CNBC, that we are living in a world where only PhDs know what is best for us all. As the Fed hides behind the political cover of its dual mandate to centrally-plan our lives, the Fed-fighter notes "we are off the common-sense-mandate and in a PhD-Standard." In the brief and wonderfully erudite segment Grant guides the erstwhile CNBC Fed-cheerleaders to a new reality of inflation not being what they think it is (i.e. not the PCE Deflator but more prosaically too much money chasing too few products exemplified in bloated real estate prices in the past and now equity prices), of a '32-inch' yard, and of a dream-like world where we "return to capitalism", and markets are finally "allowed to clear." As ever, Grant is worth the price of admission as he explains how the 'monetary mandarins' have interjected themselves between us and the public price mechanism as the Fed's 'influence' has grown exponentially since its inception.


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Wed, 10/03/2012 - 10:17 | 2851702 PrintingPress
PrintingPress's picture

Clear this: PC LOAD LETTER

Wed, 10/03/2012 - 10:31 | 2851754 slaughterer
slaughterer's picture

Jim Grant deserves to be detained in a maximum security prison on death row awaiting death by lethal injection for this anti-patriotic diatribe against a leading insitution of the USA such as the Federal Reserve.  Where does he get off on such criticism of Bernanke's PhD wisdom guiding us through this diffcult time of economic confusion and fiscal soul-seeking (noticed how I kept the language gere vague and romantic)?  Really, somebody ought to confiscate all of Jim Grant"s bowties to keep this narcissistic trainwreck of a commentator off of the airwaves so that no authentic American might be misled by his obscurantist ideas.     

Wed, 10/03/2012 - 10:33 | 2851764 Stockmonger
Stockmonger's picture

You are no MillionDollarBonus_.

Wed, 10/03/2012 - 10:43 | 2851799 OttoMBMP
OttoMBMP's picture

Who is the fat guy in the white shirt there?

Couldn't he just shut up?

Jim didn't really have a chance to say something!

Wed, 10/03/2012 - 10:46 | 2851809 azzhatter
azzhatter's picture

his name is asswipe Joe Kernan

Wed, 10/03/2012 - 10:51 | 2851831 MillionDollarBogus_
MillionDollarBogus_'s picture

MDB appears to have some stiff competition...

We'll see about that....

Wed, 10/03/2012 - 10:55 | 2851842 Thomas
Thomas's picture

Hey Joe Kernan. Are you reading this? If so, let me give you some advice. When you have a guy like James Grant on, it is time for you to shut the fuck up and listen.

Wed, 10/03/2012 - 11:45 | 2851973 NotApplicable
NotApplicable's picture

That doesn't pay as well.

Clown shows require clowns. In this case, to provide distracting cover under the guise of the "wit" of conventional ignorance... er... wisdom, I mean.

Wed, 10/03/2012 - 12:04 | 2852040 markmotive
markmotive's picture

They can't let them clear. it would become painfully obvious that the system is about to collapse

Growth is a temporary (250 yr) phenom.

Thererfore, credit growth is a temporary phenom.

Therefore, the system is a temporary phenom.


Wed, 10/03/2012 - 13:06 | 2852253 Alexandre Stavisky
Alexandre Stavisky's picture

Imagine a return to free market economics.  What if money expansion and support of bonds and banks were to cease overnight?

Suddenly every gear in the enormous financial system would turn to shorting, leveraged shorting, and liquidations.

Most company owners, large and small, would have to shutter.  That day if they understood, weeks later when market forces made it undeniable.

Much more that half of all businesses and individuals would be forced to bankruptcy.

Most sovereign and commercial entities would find themselves unable to obtain funding AT ANY PRICE.  Those that did would balk when interest demands drove above 20% per annum.

The very few solvent and liquid remaining in the system would acquire at pennies on the dollar with most assets going bidless.

Years of unemployment for the most needy.  Astounding wealth gaps.

Same with true gold standard.  International bank run, soaring paper price, hoarding and withdrawal of actors from financial participation.

Depression of such magnitude that international revolutions would be inevitable, or tyranny and iron clad police states.

Instead we die by fire rather than ice.  But remember that monthly (not including its impact on money expansion via fractionalization) the Fed spends nearly 85 Billion unsterilized, pure monetization.  Tally up the cost of the Hoover Dam, Manhattan project, TVA, interstate highway system, Alyeska pipeline, build costs for most large ports, etc.  You would find it hard to spend it all.  And we'll do it every month, month after month, in open ended manner.

THAT should tell you how bad it is about to become for fiat currency holders.

Money supply skyrockets just as velocity is plunging below any previous episode.

By destruction of international full faith and credit, or by instant dry-freeze through return to sound money.  End result will be nearly the same.   And terrible beyond conception.

Wed, 10/03/2012 - 14:26 | 2852611 lemonobrien
lemonobrien's picture

good analysis.

Wed, 10/03/2012 - 16:50 | 2853237 Joke Heros
Joke Heros's picture

 heh. @Thomas, I doubt that dickface reads this site, he made his feelings known re: zerohedge in a mumbled statement a while back where he said "I don't even want to mention those two words on the air," when asked what the 2 words were his mealy mouth replied "Zero Hedge"

Joe Kernan if you are reading this, you are a tool.


Wed, 10/03/2012 - 11:08 | 2851882 aint no fortuna...
aint no fortunate son's picture

It would be nice if kernan shut his fucking yap long enough to let Grant get a word in edgewise

Wed, 10/03/2012 - 11:51 | 2851996 Taffy Lewis
Taffy Lewis's picture

Those CNBC'ers are worthless.

I miss Uncle Charlie (Biderman) - at least he's cynical and good for some laughs.

Wed, 10/03/2012 - 17:48 | 2853603 smlbizman
smlbizman's picture

biderman is a squid now....we lost him to the other side.....

Wed, 10/03/2012 - 13:49 | 2852434 SmallerGovNow2
SmallerGovNow2's picture

"It would be nice if kernan shut his fucking yap long enough to let Grant get a word in edgewise"


Wed, 10/03/2012 - 14:25 | 2852609 larz
larz's picture

kernan is a jeenyus with a capital J

Wed, 10/03/2012 - 14:26 | 2852607 Stares straight...
Stares straight ahead's picture

Exactly!  I thought coke was supposed to make you thin!

Wed, 10/03/2012 - 10:43 | 2851800 Dalago
Dalago's picture

Grant was a Navy Gunner's mate??!!?




Wed, 10/03/2012 - 10:34 | 2851765 resurger
resurger's picture

is this troll or /sarc?

Wed, 10/03/2012 - 10:42 | 2851798 Slim
Slim's picture

Positive its sarcasm.  Just dry enough to be fun and make one think.

Wed, 10/03/2012 - 11:22 | 2851909 Thomas
Thomas's picture

He is the Hugh G. Rection Professor of Trollmanship at Troll School. We should saver these thoughtful posts.

Wed, 10/03/2012 - 10:39 | 2851788 Taint Boil
Taint Boil's picture



Good try [MDB]

Wed, 10/03/2012 - 11:11 | 2851887 TheCanadianAustrian
TheCanadianAustrian's picture

Wow, you realy need to go back to troll school. That was brutal.

Wed, 10/03/2012 - 11:19 | 2851905 earleflorida
earleflorida's picture

? ...

wtf !

Wed, 10/03/2012 - 11:50 | 2851988 fuu
fuu's picture

You forgot to change logins dude.

Wed, 10/03/2012 - 12:15 | 2852081 malikai
malikai's picture

Excellent stuff!

Wed, 10/03/2012 - 13:46 | 2852426 SmallerGovNow2
SmallerGovNow2's picture

Great sarc rant slaughterer...  (-:

Wed, 10/03/2012 - 10:19 | 2851712 backhandtopspin...
backhandtopspinslicer's picture

There is no joy in Mudville and there is no freedom in Amerika

Wed, 10/03/2012 - 10:36 | 2851777 The trend is yo...
The trend is your friend's picture

BS degree           = Bull Shit

MS degree          = More Shit

PHD degree        = Pile it Higher Dammit

Wed, 10/03/2012 - 11:06 | 2851876 Dexter for President
Dexter for President's picture

In engineering I find that a BS degree is quite useful, a MS is sometimes better while some individuals with a PhD show staggering intellect and can really get fantastic results but most with a PhD "Pile it Higher"

Wed, 10/03/2012 - 10:18 | 2851714 LawsofPhysics
LawsofPhysics's picture

Allow, bad business models to FAIL?!?!  What a novel concept. Sorry Jim, that's not how fascism works.

Wed, 10/03/2012 - 10:20 | 2851717 backhandtopspin...
backhandtopspinslicer's picture

I'd gladly return to a gold standard instead of having to carry around this bull sheet meter reader

Wed, 10/03/2012 - 11:08 | 2851879 No Euros please...
No Euros please we're British's picture

Nah, they just said. They're adopting the PhD standard instead. No need for a bull sheet meter any more, just assume it's offscale permanently.

Wed, 10/03/2012 - 10:22 | 2851719 Comay Mierda
Comay Mierda's picture

cant smart guys like Grant, Faber, Schiff, Rogers, etc put the pieces together and realize this is all happening 100% by design?

All your freedoms are belong to us - tptb

Wed, 10/03/2012 - 10:39 | 2851786 Pladizow
Pladizow's picture

They of course know this and play along with the game and get rich, while claiming Bernake is stupid!


Wed, 10/03/2012 - 11:00 | 2851857 kaiserhoff
kaiserhoff's picture

Do I detect a note of protest against censorship in your latest icon, Plad?

Wed, 10/03/2012 - 11:11 | 2851884 gjp
gjp's picture

Exactly +1, everyone is in on the game, even the critics.  That's why we're still playing.  It will not fail because anyone really wants it to, but only because it somehow runs out of energy (literally) and starts consuming itself.

Wed, 10/03/2012 - 11:30 | 2851936 exi1ed0ne
exi1ed0ne's picture

It makes so much more sense when you realize it isn't news, but theater.  Just one more dimension of the Circus Zone.

Wed, 10/03/2012 - 11:38 | 2851957 A Lunatic
A Lunatic's picture

Yep, they are all 1%ers.........

Wed, 10/03/2012 - 10:39 | 2851790 LULZBank
LULZBank's picture

You would'nt be seeing them on the TV then.

Wed, 10/03/2012 - 10:23 | 2851729 101 years and c...
101 years and counting's picture

he's a terrorist and should be detained at guatanamo!

Wed, 10/03/2012 - 10:32 | 2851760 RSloane
RSloane's picture

We are getting soooo close to that. If you can be arrested and fined for collecting rain in a water barrel, all bets are off.

Wed, 10/03/2012 - 10:49 | 2851815 Abraxas
Abraxas's picture

Since you mentioned the rainwater, how many people know that the Miltonian Chicago School of Business was behind the authorities in the Latin America who actually imprisoned their own people for collecting rainwater? And why did they do this? Well because the water system was privatized by an American conglomerate.

They experimented on and raped Chile, Indonesia, the Balkans, and all to get ready for the big one, the USA and the rest of the world which is happening as we speak. All those hailing Milton and his fascist dogma as anything else but brutal repression are either ignorant or evil.

Wed, 10/03/2012 - 11:30 | 2851932 BigJim
BigJim's picture

The fact that Friedman was a believer in the 'necessity' of having central banks says it all, really.

Wed, 10/03/2012 - 10:50 | 2851830 El
El's picture

Guantanamo is so yesterday. Clearly it will be at Thomson prison in Illinois. http://www.politico.com/blogs/under-the-radar/2012/10/obama-administrati...

Wed, 10/03/2012 - 10:23 | 2851730 Cognitive Dissonance
Cognitive Dissonance's picture

"They" cannot (thus they will not) let the markets naturally clear because that would destroy their power base and source of control.

Wed, 10/03/2012 - 10:55 | 2851844 seabiscuit
seabiscuit's picture

Outstanding summation CD!

Wed, 10/03/2012 - 14:02 | 2852506 Milestones
Milestones's picture

Give thatman 64 silver dollars. Right on the button.        Milestones

Wed, 10/03/2012 - 10:24 | 2851731 insanelysane
insanelysane's picture

I was still a bit sleepy this morning but I could swear the Bloomsberg tv had a graph that showed a negative correlation between gas prices and consumer goods which seems to indicate that if gas prices go to $5/gallon, the price of consumer goods will actually fall.  Hedge accordingly.  The law of gravity has been repealed.

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