Jim Grant: "Central Banks Have Over-Egged The Financial Pudding"

Tyler Durden's picture

The anchoring bias in the world's major sovereign bond markets (most notably those that have printing presses) is tremendous. As Jim Grant notes during this interview with Lauren Lyster, the blind indifference to the possibility of rising interest rates now is extremely similar to the indignance to the possibility of interest rates falling during the 1970s and 80s. In a broad and insightful few minutes Grant sheds a critical light on the similarities between then and now and fears that our unshakable confidence in the ability of the PhDs running our world monetary policy is false and that the market will eventually win out. The fear that is dominant among central bankers is indeed that of deflation and there is little to no fear of inflationary concerns and notes that there is a less than small probability that the world falls out of love with the US government's financial position. The truly humbling lesson of cycles past, he notes, is that they don't issue a press release (or ring a bell) at the turning point. "Things can remain seemingly excessive, until you turn your back and the reversion to some sort of mean begins." Grant believes we are approaching that, if not having already begun, that path back to reasonableness in interest rates. Grant continues with a discussion of potential income-generating ideas, his views on Bernanke's miscalculcations and most recent regime shift, the concerning idiocy of Japan (who seemingly can "neither procreate, nor re-inflate"), MMT 'price controls', and the path to total central planning.


The interview with Grant starts around 3:00 in with a discussion of the market's psychological similarities to the 1970s and 80s...

...at around 9:00 Grant explains some ideas on generating income via leveraged loan funds

...at around 11:45 Grant considers Bernanke's regime shift (with a critical insight that "The Thing You Want To Measure Somehow Disappears When You Try To Measure It" - to wit inflation's anchor during the 2000s when house prices were going sky-high...

...at around 17:00 Grant discusses the craziness of world central bankers and especially Japan with their new leader (about to be elected) - quote of the day "The Japanese, seemingly, can neither procreate or reinflate"

...at 20:00, Grant reflects on the endgame and Bernanke's proverbial helicopter drop and how Japan is the leading indicator

...at 21:10, Grant addresses the MMT crowd... and extends on at around 23:00 to discuss the path to broad-based central-planning - which has all too much in common with what we used to call 'Red China'


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
RobotTrader's picture

Why do so many bears look as if they had just emerged from a concentration camp?

Man, somebody needs to take that guy out to Fleming's for a good steak dinner!

And trade that 2002 Buick Park Avenue for a 2010 Lexus or something.

Mr Lennon Hendrix's picture

I am sure he is fine.  Silver and gold are still outperforming stocks and bonds over the last decade.

TWSceptic's picture

He seems healthy to me and it's good to see an American who doesn't look like he'll get a heart attack at any moment.

Yen Cross's picture

 Grant is a smart man. As he states, "There is a less than small probability that the world falls out of love with the US government's financial position".

  Who shops at a store where the owner is an A-Hole? No matter how good the product is,  U.S.Treasuries are good from far, but far from good..

   The U.S. is the Rodney Dangerfield of Planet Earth.

Right now/ We have a choom head with no foreign policy skills, dictating another choom head with no fiscal policy skills running, " Skoolhouse Rock  Amerika"...

Mr Lennon Hendrix's picture

Lauren is such a babe.

One day I hope that someone like Lauren finds out Max Keiser stole my idea to "Crash JPM and Buy Silver" and leaks it and totally discredits that bozo.

And instead of going to youtube just watch the interview on RT here:


Yen Cross's picture

 Thanks L/H, nice lead in... ;-)

Cosimo de Medici's picture

Damn, you are obsessed with being somebody.  Get over yourself.  You think if that woman knew "the truth", she'd get all weak in the knees around you?  Keiser might well be a bozo, but glass house residences and all that.  Just sayin'.

As for those who are enamored of this TV talking head Lyster, might I suggest getting a couple of articles off Bloomberg, then have your wife or girlfriend stick her head inside an old big box TV and read to you.  That should spice up the love life.

Finally, as for that piece of Putin Propaganda called RT, anybody wonder why its website cannot be accessed on Tor and that it leaves LSOs on your computer to keep tabs on visitors?  Anybody also know why the network just happened to overlook Putin's new draconian security law passage?  No doubt it was just an oversight in a busy news decade.

MeelionDollerBogus's picture

really? Including when James Turk or James Rickards are interviewed? James Rickards has even co-hosted Capital Account. You think it's easy to get his time? He even consults for the Pentagon. Does your wife have that kind of pull?

ZFiNX's picture

Neglecting the radioactive holocaust of Fukashima (Fuku?) the only really good return you can get out of Japan is probably living there. Sounds the perfect place - tons of easy capital and no inflation; who cares if no one is making profit? Large profits are just an indicator of how far technical progress is away (due to diminishing marginal returns on technology) from the maximum.

BigInJapan's picture

Yeh, sure thing.

Wanna swap houses, then?

kevinearick's picture

we are testing keynes assumption, irrational markets or rational individuals, to set price. the money is competing to buy time, up the wall...

RobotTrader's picture

I give Lauren Lyster a maximum of 6 more months on the air.

Eventually, some "Enterprising Speculator" running a giant hedge fund with "billions under management" will sweep her off her feet, offer her a monthly stipend of $25,000/mo. plus an AMG Mercedes, and put her up in a luxury apartment overlooking Park Avenue rent free.

Her days of working for a living will be gone forever.


Tons of pics here:


dark pools of soros's picture

actually I hope she just gets a job at Naked News for a week or two

Joe moneybags's picture

Maybe Lauren can afford her own stable of boy toys, and to hell with an old, cold, shriveled sugar daddy.

Joe moneybags's picture

Robot, before your computer dies, consider donating your hard drive to the Smithsonian, as a comprehensive  compendium of the adult entertainment found on the internet, circa 2000 through 2012.

scatterbrains's picture

yall niggas crazzed.. think of it this way.  Bernank is tuning up his ole whoopty (economy) in the garage and unaware of the deadly carbon dioxide gas (debt)  building up around him. He's running wide open throttle (printing like no tomorrow) he's tweeking the fuel/air mix too lean (interest rates anchored to zero) and is about to melt the exhaust valves.  The Gold bet is that he will not let up in time and destroy the engine. (fiat system).  Should interest rates start to rise the risk of melting the valves disappears and gold gets crushed. So the question is what comes first ? Does he kill himself from the gas? Does he blow the engine?  Do rates rise (deflationary collapse)  or does he manage to get it all under control in time to avoid either of those outcomes? 

q99x2's picture

The Red US. Thus Spake Thunderbird.

ZeroAvatar's picture

Jim Grant: "Central Banks Have Over-Legged EGGED Over-Egged .......(damn that girl).

ZeroAvatar's picture

"Honey, I blew up the Economy!"

Yen Cross's picture

 Who cares about the "girl"?  It's all about iNTEL/  Learn Bitchez/ Deferment is for clowns/

cranky-old-geezer's picture



I don't wana rain on everybody's Grant-worship-fest here, but he's just like all the other (alleged) realists out there, won't come out and say what's really happening, won't come out and say they're looting the nation dry, stealing all the wealth they can, the silent easy way, printing and currency debasement.

They climb over each other telling us how present policies don't work and can't work, they've been saying it 4 damn years now, we're tired of hearing it, we know damn good and well present policies won't work and can't work, they're not telling us anything we don't already know, they're just getting TV exposure.

Fuck 'em all, Grant, Faber, Rogers, Bass, Schiff, Celente, all those gutless pussies.

Even ZeroHedge can't seem to grow enough balls to come out and say what's really happening.  What the fuck?  Is this fightclub or some damn socialite white glove tea time?

Seems Max Keiser is the only one coming right out saying they're robbing everybody blind, looting the damn nation dry.

... and me too of course.

I think I'll spend less time here.  Article after article day after day week after week month after month saying the same damn thing from different angles.  Gets boring eventually.

Papasmurf's picture

Any place better to go Cranky?  You have any ideas other than to realized what's happening?  Please share.

Catullus's picture

Yes.  Go to Max Keiser, who supports that Web of Debt, greenbacker crank who wants to do what Bernanke is doing except more of it.

mewenz's picture

I like Grant but just don't get why he pretends the Treasury market is actually a "market", surely he knows better.  He talks about people deciding not to buy Treasuries anymore...so what happens then?  Do yields go up or does the Fed, with unlimited ability to print, continue to "up the ante" and become a substitute buyer. As long as the USD is accepted as a reserve currency, and the alternative currencies continue in the race to debase, the Fed can just keep printing. 

theprofromdover's picture

Lauren needs a good meal, she looks ill.

non-sexist comment, just an impartial observation.

No Euros please we're British's picture

hey! Excuse me, could you make it plain that you're talking Economics PhDs here! Leave us rocket scientists out of this mess.