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"The 2008 Crisis Didn't Come From Nowhere," Jim Grant Slams The Fed's Utopian World Of "Economic Sleepwalking"

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Central bank’s experimental policies are only hurting America instead of leading the nation into financial prosperity, exclaims James Grant, editor of Grant's Interest Rate Observer. "The Fed is a relic of the age of command and control. The Fed is an anachronism,” Grant tells Bloomberg TV in this excellent interview, "The Fed ought to get out of the business of masterminding ‘the American enterprise,’ what we call the U.S. economy." Central bankers, Grant adds, by pressing rates to nothing, have given rise to this "very pleasant kind of inflation we call bull markets." While bull markets are great insofar as they reflect what is actually going on, "they are very dangerous to the extent that they are the artificial creation of artificial interest rates."

"We are in a regime of price administration. Price control is a policy that has failed for millenia. When prices are manipulated, manhandled, and otherwsise distorted, real decisions follow and the real decisions are distorted... there's bricks, mortar, and human lives attached to these [interest rate decisions]... and that's why they matter"

"How do they know the funds rate ought to be zero?"

 

"The world's central bankers went to the same schools, talk the same language, have the same world view.

 

They have shared conditions. They believe, for example, that an average of prices, which they believe they can calculate, must rise at two percent a year unless the world fall into something they choose to call deflation.

 

They believe that they can see into the future. They believe that they have the knowledge and the dexterity to manipulate interest rates to the benefit of society.

 

The central banks no more than the rest of us can see into the future.  They are managed by human beings who do their best but who cannot -- underscore -- cannot see into the future and improve it before it happens. That's their conceit. But it is not given to mankind to do such things.

 

They try. They have every good intention. But they are appliers of an outdated scheme of command and control. They don't know what they do."

Bloomberg TV Interview...

Some further highlights...

On the consequences...

The anger in the political process right now across both parties is evident for example, in the otherwise seemingly baffling popularity in the polls of Donald Trump. He is the -- to my mind, he is the candidate of the thwarted and frustrated people who don't know exactly what is happening, but know full well that something is wrong, that something certainly is different.

 

Donald Trump speaks to them in a way that I think is very destructive. But that's one consequence of the set of policies that have delivered us into this world of economic sleepwalking.

On repeating the same mistakes...

"the 2008 financial crisis didn't come from nowhere. It came, in my opinion, from the socialization of credit risk and from the manipulation of prices."

 

"We are under the governance of former tenured economics faculty who think they know more than they can possibly know,"

 

“Let us at least revert, if not to some perhaps Utopian dream of a perfect monetary standard, at least let us get out of the business of the suppression of interest rates, the administration of prices and the government sponsorship of asset bull markets."

On the stock market...

"Now, there is inflation and inflation. There is an inflation that is registered at the supermarket and the cash register. And there is inflation that is registered on the stock markets and in the real estate markets.

 

And the central bankers, by pressing rates to nothing, have given rise to this very pleasant kind of inflation we call bull markets. Bull markets are great insofar as they reflect what is actually going on.

 

They are very dangerous to the extent that they are the artificial creation of artificial interest rates."

 

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Sat, 11/07/2015 - 14:10 | 6761789 Four chan
Four chan's picture

he's going to be right one of these days, and when he is, he will be REALLY right.

Sat, 11/07/2015 - 14:12 | 6761791 knukles
knukles's picture

Wait wait wait wait wait   wait.
But they said nobody could see it coming and nobody took responsibility and nobody got shafted for doing it, so whaddadaytalkinbout, eh?

Sat, 11/07/2015 - 14:21 | 6761815 brucyy
brucyy's picture

he's already right.

Sat, 11/07/2015 - 14:51 | 6761871 back to basics
back to basics's picture

I agree with everything legend Jim Grant says, one of the few remaining voices of reason, except that it's not the FED that is sleep walking, it's the corrupt, bought-and-paid-for by the money cartel US politicians who alllow this shit to go on who are sleep walking. 

 

Sat, 11/07/2015 - 15:09 | 6761895 t0mmyBerg
t0mmyBerg's picture

Aside from the fact that not 1 in 535 US Congresspeople know what the fuck is going on about pretty much anything, Jim Grant is a lonely voice in a wilderness of fucking asshats.  Just listen to that moron she-witch from Bloomberg in the interview "We are stuck with the Fed Jim, you cannot go against the Fed".  She cannot even conceive of a world without a central politbureau setting the price of overnight money and attempting to set the price of much else.  Nor does she care too.  It just seems crazy to her.  And her myopia is the currently operative and very well dug in meme. 

At least guys like Grant are refining their message to really outline what trhe fucking Fed represents.  An anachronism.  A price control board.  A relic of the New Deal type of progrssive idiocy of the 30s.  Made up of professors from the sheltered holes of academia who wouldnt know a market price if it hit them in the ass.  Who arrogantly pretend to divine what the price of money and now other assets higher up the food chain should be when the lessons of the last 100 years have proven definitively that such an approach leads inevitably to disaster and is simply a futile and self-defeating way of doing things.

Fucking unreal actually.

Sat, 11/07/2015 - 15:40 | 6761945 Kaiser Sousa
Kaiser Sousa's picture

Stephanie Rule would suck Jamie DimonS' dick on ai if they would let her...

thats how much of a banker wall st. whore she is...

Hey Steph - i hope u read ZH u fucking CUNT.....

Sat, 11/07/2015 - 16:37 | 6762054 Bernoulli
Bernoulli's picture

I was wondering since when do TV hosts opinions matter?

"Ok but Jim but let's get real, this is not going to happen" (hey what happened to R-E-S-P-E-C-T??)

and then this

"[The FED] is what we've got. That is what we live with. And if you're betting against what they're doing, it doesn't work from an investing standpoint"

outrageous!

And I simply couldn't believe my eyes towards the end of the video when she was TYPING STUFF IN HER PHONE while Jim Grant was talking.

WTFF!

Sat, 11/07/2015 - 17:06 | 6762108 Kaiser Sousa
Kaiser Sousa's picture

shes a dispicable piece of shit...

always a banker apologist and glorifier...

and to think some punk ass married this fucker...

jesus....

 

Sat, 11/07/2015 - 19:21 | 6762320 Bay of Pigs
Bay of Pigs's picture

So first they trot out Roger Altman to praise the FED and then she has gall to challenge Grant head to head on it?

She is a first rate hack, and sounded completely misinformed and looked quite stupid trying to state her moronic opinion.

Sat, 11/07/2015 - 19:30 | 6762431 Squid-puppets a...
Squid-puppets a-go-go's picture

"not 1 in 535 US Congresspeople know what the fuck is going on "

This is why propaganda is, long term, disasterous to those who use it. The US congress has beleived its own bullshit for so long it no longer has any concrete grip on reality. Obama's strategy in Syria case in point. One foot ont he accellerator the other on the brake.

Sat, 11/07/2015 - 15:50 | 6761966 Stuck on Zero
Stuck on Zero's picture

Jim Grant lost me when he said the Fed has "good intentions." 

Mon, 11/09/2015 - 09:16 | 6766839 Kaervek
Kaervek's picture

Good intentions my ass, he just got his mouth stuffed with hairy balls

Sat, 11/07/2015 - 16:32 | 6762044 ebworthen
ebworthen's picture

Well said.  "Rates have never been lower!" Yeah, and home prices have never been so artificially inflated!  So we pay twice what would should for a roof over our head, and get paid ZIRP to save?  What a deal!

And if we want to keep up with the very real inflation the FED is blind to, we have to hit the rigged dice craps table?

Sat, 11/07/2015 - 17:01 | 6762056 JRobby
JRobby's picture

They may sleep walk right off a short pier.

If they don't understand what is happening they should be voted out, if in office, and not voted for if they say they can change what is going on but do not address it directly in the terms Mr. Grant alludes to here. The FED IS CLUELESS or THE FED IS OWNED. Either way, THE FED MUST BE ENDED!

Not one of the current clowns running for POTUS has said anything to indicate they know what is going on. Bernie is too old.

So it is pretty clear that no one has the balls to talk about the obvious because they can't possibly all not know what is going on. Anyone that speaks up will not get the $$$$ they need to win. If they think they can make progress under the current scenario, make a difference with new "policies" they are lying and or delusional. It is much too late for that.

The Donald  has thrown out some things that his writers know the other candidates will not say. That effect has worn off and his numbers are dropping.

The only way to change it is to buy as little as possible from the oligarchs. Shop locally from people that live in your communities. When shopping locally, learn to identify products from oligarch members and don't buy them. This will involve doing without and being creative. That is where we are at now because the consolidation of power in consumer goods and services has gone way too far.

Sat, 11/07/2015 - 15:12 | 6761898 sgt_doom
sgt_doom's picture

The author of this blog post is making it sound like incompetence or accidental --- NOT BY DESIGN!

Wrong tact, dood.

I mean, they are in the major banksters' boardrooms:

http://wallstreetonparade.com/2015/11/fed-officials-are-attending-big-bank-board-meetings-is-this-stockholm-syndrome/

You need to read and study Prof. Hudon's books:

The Bubble and Beyond

and

Killing the Host

(Live and learn, buddy!)

Sat, 11/07/2015 - 14:13 | 6761793 Fallschirmjaeger
Fallschirmjaeger's picture

GEEEEZ ... 

Sat, 11/07/2015 - 14:14 | 6761795 Hannibal
Hannibal's picture

Senior Russian Advisor and Media Head Found Dead at Washington DC’s Dupont Hotel

http://21stcenturywire.com/2015/11/07/senior-russian-advisor-and-media-h...

Sat, 11/07/2015 - 14:41 | 6761849 Kaeako
Kaeako's picture

Interesting that he would even go to the US where he is considered the head of Russia's international propaganda, which is primarily aimed at audiences in the United States and Western Europe. Seems awfully dangerous, even if he does have powerful business partners there.

Sat, 11/07/2015 - 15:52 | 6761969 U4 eee aaa
U4 eee aaa's picture

Maybe he was looking to do a deal and it didn't work out.

I just hope the Russians execute one of America's propagandist media moguls in retaliation. That would only be fair....and greatly appreciated

Sun, 11/08/2015 - 23:38 | 6766100 SoilMyselfRotten
SoilMyselfRotten's picture

I'll chip in for Ruperts stay at the Moscow Hilton

Sat, 11/07/2015 - 14:15 | 6761799 Stroke
Stroke's picture

There's confidence in wearing a bow tie

Sat, 11/07/2015 - 17:15 | 6762121 Exalt
Exalt's picture

Bow ties are class my friend. Classic style. Pasley ones are even better.

Sat, 11/07/2015 - 14:16 | 6761800 GreatUncle
GreatUncle's picture

Ha,ha,ha ... central bankers DO NOT operate in my best interests, they are in it for themselves.

Article needs to expand a bit more on this continual inflation also. That for the last few years as central banks have forced inflation it meant that there is an ever growing amount of bad investment / value accruing in the system. 2008 that bad debt needed bleeding from the system, not preserving so what we find today is an ever larger amount of this freshly printed value is being used to support the bad debt that they could not allow to bust.

 

THEIR FAIL ...

If you use Keynes you have to periodically blow off the bad debt to prevent it becoming to big and swamping the real economy.

 

Sat, 11/07/2015 - 14:18 | 6761806 Wow72
Wow72's picture

Jim is right on as always.  There is no pixie dust.

Sat, 11/07/2015 - 14:38 | 6761846 cowdiddly
cowdiddly's picture

Right as rain as usual except for this part. But he knows that.

. They have every good intention. But they are appliers of an outdated scheme of command and control. They don't know what they do."

Sat, 11/07/2015 - 14:21 | 6761814 Seasmoke
Seasmoke's picture

We need to Reset first to 1997. Then next to 1971. And then finally 1913. That's how I see it. This cannot continue as is. I talk to many many people. And they are very very pissed off.

Sat, 11/07/2015 - 14:49 | 6761870 Usurious
Usurious's picture

pretty good thread........trav had so much to teach........

trav777

Tue, 01/05/2010 - 12:49 | 183058 trav777

''Taibbi isn't smart enough to understand the problem.

THE problem is debt-based money.  It requires exponential growth.

At some point, finite, real physical systems place a ceiling on growth.

This is just the nature of things.  At that point, the system has to begin generating credit growth by ponzi means.  Synthetic debt was far larger than housing and residential mortgages.  By any means necessary, they grew the credit base.  The housing price trend was merely a symptom of a deeper problem.

Everyone is running around pointing at the tip of the iceberg as if that is the entire problem.  Then when they think they've solved that, they wonder why jfc the thing is still here.  There is so much more below the waterline, real foundational problems that are simply not contemplated by economists.  Consequently, they can do no more than run around making asinine proclamations.

Who cares how or why when the SYSTEM we operate in our actual money in the absolute, REQUIRES growth as a nature of its existence?  All the things we've seen WILL occur and MUST occur as a side effect of the inability of a real economy to produce the growth needed to pay the coupon on the money lent into it.

Look at the credit curve or the inflation curve since we hit our oil peak in 1970.  Look at all that happened since.  Every dollar in existence, whether physical or electronic, has an interest demand that it lays by its very existence upon the real economy.

The system merely found a way to temporarily satisfy those exponentially growing needs with synthetic inputs.  That is all.

I mean, shit, we HAD to grow lending, right?  Ever wonder why credit MUST be grown?  If you place that axiom upon a system, who could be surprised at what happened?  Credit done got grown, didn't it?

All this talk of "socialism" and "capitalism" and government and the rest is just obfuscation.  I say this over and over again - UNDERSTAND the parable of the indian king, the chessboard, and the rice.  Until/unless you come to a fundamental understanding of what demands an exponential growth problem levies upon the real world, you will not get what has occurred and will continually scramble around with no more than a superficial grasp of the underlying issues.''

http://www.zerohedge.com/article/taibbi-fannie-freddie-mortgages-bankers...

Sat, 11/07/2015 - 16:04 | 6761990 Mike in GA
Mike in GA's picture

Trav777 was a savvy dude...I miss his commentary.

Sat, 11/07/2015 - 18:12 | 6762242 inosent
inosent's picture

Why is 1997 there? Also, please explain the reset process as you envision it, and what would be the expected and foreseeable consequences. 

Just as an aside, I think the first step in the reset is to get rid of the private fiat fractionalized 'banking' system, and get rid of all the ppl who run it currently, and ban anyone like them from having anything to do with the nation's money supply.

This WWIII rhetoric is disturbing and I don't think it is so far fetched. Honesty, and even if the current crop of 'bankers' were trying their best to do their best in the utmost good faith, which contradicts just about everything we read at a site like this, still, given the very nature of the money system as it is, after 100 years of this, and looking at all the massive amounts of debt, the reality of GDP ever catching up to it has to be totally zero.

I think we must be getting close to some sort of systemic collapse that is simply beyond the reach and control of those who have developed the system. Based on the past, unfortunately, it is hard to see the good faith. And my concern is that these system 'mangers' are looking to get out in front of another systemic meltdown by bringing into the picture an event o a pretty significant magnitude to match the level of expected collapse (what their models privately show).

Given the choice, I prefer a naked collapse without all the WWIII'esque 'cover'. It is a bad system. It is time to let it break down.

I think it is a much better idea to find a way to phase out of it, which is like advocating a 'controlled' collapse, and just deal with the economic pain for a while, admitting it *was* a bad system, and re-tool the thing and come up with something better.

The hardest thing is for TPTB (stole it from ZH) is to *admit* they were *wrong*, and for the ppl to have the courage to wrest control of the nation's money supply away from the foreign interlopers and place it back into the hands of the ppl through a more organic money system, not so easily manipulated, and more directly linked to real GDP, however that is measured.

The scary issue here is that there is no need for a WWIII. There really isn't any problem that deserves this sort of thing. The narrow issue is the type of money system and its currency. I think it is far better to find a way to back out of it and take the heat (because there will be lots of it as the old currency regime is taken down) in an orderly and organized fashion, with a far better system to roll it into, than to deal with the chutzpah of the 'elite', whose pride will never let them admit anything, and *only because of that* we have to potentially suffer the consequences of some horrific disaster, commonly referred to these days as a 'false flag event'.

Sadly, I have no reason to think, given the raw inescapable truth as to the types of characters in 'control' of the money game, there will not be one heluva false flag event. We've seen it before. I just hope these ppl are smart enough not to provoke an all out nuclear war. As one poster noted earlier on this thread, there will be no winners, and even if the 'elite' manage to  pass the time in their luxurious 'bunkers', they likely will have miscalculated the time it takes for the earth to heal from the wound they inflicted upon it.

In other words, theoretically, TPTB could be contemplating a suicide mission false flag without even knowing it, because they *think* they will survive. The question before us, then, is exactly how far will they go for the next 'false flag event'?

It is really ashame we cannot shut the federal government down immediately and annihilate the threat, but unless the heads of the military and a sizable percentage of the richest Americans get behind a move like that, understanding *why* they should *make* such a move, that is not likely to happen.

It is truly extraordinary that the set of facts that would ultimately demand a fed govt shutdown of this nature are discounted, and for the fear of being called a name ('anti-semite', which means nothing), the military leaders and the rich ppl would rather take the risk of getting vaporized in a WWIII attack because they failed to use their position and resources to cut the threat off in its tracks.

Mon, 11/09/2015 - 09:50 | 6766980 Kaervek
Kaervek's picture

Strong analysis, I think you're spot on. Nobody is ever going to admit anything about being wrong or the system being inherently corrupted and dangerous.

Still, it doesn't have to be world war. The _constant_ fear of war/terror might be enough, with some shelling in the desert to keep the MIC happy. The big players know this and they can profit together by keeping their citizens afraid of each other and whatnot. Divide and conquer. It's a dangerous game though.

Mon, 11/09/2015 - 21:29 | 6770372 inosent
inosent's picture

I hope you're right. One step back from the edge, and create the tone of imminent disaster w/o every crossing the line ... Sort of seems the way the game is played at present. And for sure, as you say, "It's a dangerous game". Playing so close to the edge like this creates a risk of line crossing. That does make me nervous.

Sat, 11/07/2015 - 14:22 | 6761821 Peter Pan
Peter Pan's picture

The interest rate pendulum will eventually swing back to normality with the force of a wrecking ball. A wrecking ball that has become infinitely more powerful not just because it has swung too far in one direction but also infinitely more powerful because it has taken on the weight of untold debt.

Any normalisation of rates MUST be accompanied by destruction of debt.

A haircut on savings is the only way much as I hate to say it.

Alternatively the retiree with a million dollars in the bank will be forced to eat away into his capital at an increasing rate thanks to supermarket inflation combined with Obamacare and other such tragedies.

Mon, 11/09/2015 - 10:01 | 6767037 Kaervek
Kaervek's picture

100% correct, but there will be no normalization. Yellen said as much, if the economy seems to need NIRP they will indeed be going negative.

Either we are going to see a crash before the first hike, then all bets are off and we go full NIRP instead of hiking, or we see it crash right after the hike, in which case we also go full NIRP.

So instead of normalizing they are once more extending the farce they call monetary policy. When they are finally paying me to take out a loan I will be in debt the first time in my life, and I will sink all of it into PMs. Cheers to that bitchez

Sat, 11/07/2015 - 14:24 | 6761823 Clowns on Acid
Clowns on Acid's picture

What Jim would have said without his bow tie on would be,

"These cock suckahs should be in jail. They have ruined the lives of many, and falsely enriched those in society who have the lowest value system." Trump isn't perfect but he is the only guy with balls enough to take on the neo Bolshe viks at Goldam and the Fed... although I repeat myself" 

Sat, 11/07/2015 - 14:27 | 6761826 malek
malek's picture

Look another one (you) who believes the false "choices" offered by TPTB will be able (or even only willing to try) to substantially change things!

Sat, 11/07/2015 - 14:26 | 6761824 wmbz
wmbz's picture

I am sure Jim knows as does anyone with a brain the Banksters Inc. AKA The un-fed do not give a flying fuck about anything or anyone but their interests.

They own the system, they are the machine!

Sat, 11/07/2015 - 15:19 | 6761904 Seasmoke
Seasmoke's picture

Silly me I thought that was holding Gold and Silver. 5 years later. Looks like I'm going down with the ship. Although Maybe I will find my Gold down there.

Sat, 11/07/2015 - 15:52 | 6761971 negative rates
negative rates's picture

It's illegal for the captain to not go down with the ship, but that's okay, life will go on without you.

Sat, 11/07/2015 - 14:31 | 6761831 Jack Burton
Jack Burton's picture

This post ties in nicely with the one below regarding official Washington's plans for World War III. You see, without a base economy, no nation has ever maintained a really viable world empire and military force to match it. While official Washington plans to conquer the world, back here in the economy where we live, things are in a state of rot. And when the rot can no longer support a trillion dollars a year in spies and armies, then a decline will begin. Just like Britain after World War II, they wanted to maintain empire and world status, but their declining economic power overrode the desires of generals and politicians, and the long decline began.

The USA's power is not military, it is dollar hegemony. The right to "print" that nobody else can do without crashing their currency in world markets. You notice the strong dollar? Despite a fake economic recovery, unheard of debt levels, and decling real economic activity, we build more weapons than all earth combined, and the T-bill sells, and the Fed can buy them up as well, with no collapse of dollar strength.

Russia and China have some smart educated people. They have to know where the USA leads the world, and that is in Dollar Printing. Their best tactic is to attack dollar hegemony, not think up ways to nuke Washington. War on the battlefields is secondary to taking away the Prop that holds America above all on the planet. Dollar hegemony, Dollar Printing, Dollar strength. People want dollars, even though they are printed from nothing to infinity. Kick that prop out, and it's all over.

Sat, 11/07/2015 - 16:12 | 6761850 Tinky
Tinky's picture

Presumably your final paragraph is rhetorical, given that Russia and China appear to be doing exactly that.

Sat, 11/07/2015 - 14:58 | 6761878 Peter Pan
Peter Pan's picture

Dollar hegemony at this point in time is virtually dependent on military might. Kick that prop out and it's all over as far as China, Russia and others are concerned.

Sun, 11/08/2015 - 12:39 | 6764158 Not My Real Name
Not My Real Name's picture

It's the reverse. The USA's military might is dependent on dollar hegemony; the US dollar's reserve status is what enabled the growth of such a massive force. If the dollar dies, there will be nothing to support its continued operation.

Mon, 11/09/2015 - 10:06 | 6767060 Kaervek
Kaervek's picture

Maybe we should use those forces while they are still available to get some real money - like gold. (Soldiers are paid in USD of course)

Ukraine, Venezuela, Greece, Syria, who still has some shiny stuff hidden away for us to steal?

Sat, 11/07/2015 - 18:20 | 6762283 Dark Daze
Dark Daze's picture

Yes of course it is dollar hegemony along with complete control over commodity and currency markets. But you also know from having commented on the other story about negative swap rate spreads that the 'world', at least in terms of the Fed primary dealers, is abandoing the US. Apparently even the US mega banks no longer give a shit about whether the economy survives or not, it's everybody for themselves now. Should be an interesting winter. I give it 2 to 3 months.

 

Now where do you hide 18 Trillion in Treasury paper that nobody wants? Brussels?

Mon, 11/09/2015 - 10:07 | 6767066 Kaervek
Kaervek's picture

Ft Knox

Sat, 11/07/2015 - 14:36 | 6761842 gigaweb
gigaweb's picture

As usual, the Bloomberg video player doesn't work on ANY of my three installed browsers.  The advertisement does, though, of course...

Sat, 11/07/2015 - 15:04 | 6761864 conspicio
conspicio's picture

It is one thing to be able to claim to divine the future based on some select set of past circumstances influenced by the noted groupthink. However, the bigger part of the Fed role lies in the outfalls of the White House’s Social and Behavioral Science Team (SBST) headed up previously by Cass Sunstein and now Maya Shankar. That team has not disbanded completely, only scuttled further out of the light and into the dark corners of virtually every government agency. The Fed is well aware of the "nudge" role they play in the SBST playbook. The psy ops that have been conducted against the people are staggering and are rooted in Alinsky methods, the Cloward-Piven methods, and many others that Sunstein, Peter Orszag, Val Jarrett, and others are actively practicing to accomplish their agenda. The Fed is merely a tool to accomplish goals, much like the BLS is a tool in providing false data to suggest a certain economic picture to keep the masses spending like mad. Or false climate data to keep the power revolving around fear. Or any number of ginned up narratives that must be adhered to for the ball to keep rolling. Cries of "the economy is great!" over the whispers of "the economy is meh" have been going on for eight years now in the background of the Fed pumping, pushing, and pouncing on every possible lever button and switch to keep the narrative flowing along. Tools.

 

Sat, 11/07/2015 - 21:05 | 6762649 divingengineer
divingengineer's picture

This system is the only thing keeping those assholes alive. How ironic to tyr to destroy your only defense from the pitchforks.

 

Sat, 11/07/2015 - 15:12 | 6761899 assistedliving
assistedliving's picture

the more "right" these scribes are the higher the markets go...

following their advise, the more money I leave on the table or LOSE

(see my PM portfolio).  He did mention SBER awhile ago, watched it

drop to $4.65 and decided to wait for $4.50-55...BIG MISTAKE!!

Sitting on my hands now; watching in awe & wonder....and waiting like

everyone else for the CORRECTION that never comes....

Sat, 11/07/2015 - 15:12 | 6761900 yogibear
yogibear's picture

Altman made huge sums of money off of the Fed. Why wouldn't he kiss Bernanke and the Federal Reserve's feet?

So many of the other fund managers also made huge sums from the Fed's control as well.

When there is a currency crisis who suffers? Not Altman and his buddies, it's the commoner that will suffer.

Sat, 11/07/2015 - 16:24 | 6762027 Mike in GA
Mike in GA's picture

Altman proclaims his happiness that "...thank God the Fed was there at the 2008 financial crisis..." which is a great example of the cognitive dissonance infecting the "establishmentarians", to quote Grant.

As the only entity with both the authority and mandate to prevent economy-wide crises like the 2008 breakdown, how could they possibly be seen as the economy's savior when it was the Fed failure to "remove the punch bowl" which aided and abetted the architects of subprime doom?

Jim Grant is ALWAYS a breath of fresh air thinking.  Altman, not so much.  It just isn't couth to see a billionaire with his hand out.

 

Sat, 11/07/2015 - 15:29 | 6761924 HoserF16
HoserF16's picture

Right Wrong or indifferent, they're the ones in-charge mother fuckers. Get over it...

Sat, 11/07/2015 - 19:33 | 6762022 InnVestuhrr
InnVestuhrr's picture

Jim Grant is VERY smart, mind and heart in the right place,

BUT fatally naive regarding the deceitful, manipulative, scheming, power-lusting ways of humans, especially those who lust after coercive collectivism and centralized planning and control.

Uncontrolled markets, individual rights & liberty, fiscal prudence, sustainable debt, etc are all long gone and never coming back, they are incompatible with the new world order.

All regimes must spend far money than they can collect in taxes without fomenting rebellion in order to buy the votes and passive compliance of the hordes of millions of over-bred proletariat with exploding entitlement programs, and also keep these hordes as employed as possible with keep-preoccupied-work subsistence jobs funded by tidal waves of cheap credit and continuously devalued currencies.

This level of spending, debt, and currency devaluation can be sustained only by creating continuously larger amounts of debt and continuously monetizing it, and keeping interest rates crushed.

Once all the regimes have entered the ZIRP monetary black hole, then all the components of the financial, economic, fiscal, governmental, and social systems conform to that rate level and trying to revert to normal rule-based or market based higher interest rates will reverse the huge carry trades, undo huge leverage applied everywhere in the economy, undo cheap abundant credit, and cause economic decline, eg home and auto sales, and widespread defaults.

No regime would  benefit from such upheaval and therefore no regime has any motivation to attempt to exit ZIRP, and therefore the money and debt creation and currency devaluation will continue until some uncontrollable shock to the financial markets or the economy, eg 9/11 style terrorist attack, natural disaster, full-scale war in Saudi Arabia, etc crashes the system. Until then, old debt will just be rolled-over, be refinanced at lower interest rates for longer maturities, and the game will continue year after year after year.

 

Sat, 11/07/2015 - 16:31 | 6762042 rejected
rejected's picture

"Central bank’s experimental policies are only hurting America..."

should be:

Central bank's continued unlawful / illegal policies are only hurting America..."

There.... fixed.

The Federal Reserve was unlawful at birth,,, then was given illegal power to purchase US paper couple years afterwards so they could enter WWI and extend a war that was pretty much over. Slow but sure their paper money displaced real money and by 1964 nothing in the USA was either backed or made of real money. In 1971 the final axe was given when the USA defaulted and went pure monopoly money.

In a mere 100 years the Banksters gutted America's money and constitutional legal system. The military has been trashed by political correctness and are pretty much the laughing stock of the world. Their eleven carrier's plus the one in in construction are useless with the new missile technology. They are still useful to the crazies to project force on countries that cannot defend themselves.

Trying to build new expensive weapons won't work much longer as the dollar hegemony is slowly disappearing making the ability to print more and more difficult without imploding the economic carcass of what used to be a productive virulent economy. Less than half of the working age population is even in the workforce,,, two thirds of whats left are mowing each others yards and the rest are working for the government either directly or indirectly.

What makes the USA dangerous is the nukes it has. Since it cannot fight a sustained conventional war long with its degraded and feminized military, and would take years for it to start serious war production as the skills required no longer exist, especially while trying to fight one at the same time its only option is nuclear. 

There are no defenses against nukes. All the gold and stored food won't do you any good. Most of us will be either vaporized or die in excruciating pain. The powers that cause this will of course survive for awhile in their bunker cities but will eventually die off as the food supply dwindles and the lands unfit to grow. No meat as most animal life, wild and especially domestic will be killed.

Anyone thinking they can survive is being delusional. The survivors immediately following the exchange will be killing each other hoping to garner some food. Government and it's police forces won't exist so it will be every one against everyone else. Eventually all will die either of radiation sickness as no medical help will be available and / or starvation.

Bottom line: Planning won't do anyone squat. The Ferengi among us trying to sell the idea of planning are simply trying to sell fear for their own gain in the present. Best plan I can see is to have one gun with one bullet. If your unfortunate enough to survive the initial attacks then use that bullet wisely.

The only true answer to the problem is to stop the crazies before they do it. But sadly, Most Americans are not physically nor mentally capable of that challenge. Those that are lack numbers and will be taken out by the fascist forces. Concentration camps and other not so nice means of control may be the order of the day before the nuclear exchange.

Therefore all indicators appear to point to the species being within one, possibly two, generations of extinction,,, unless,,,  the crazies are defeated and the weapons destroyed. Good luck with that!

 

Sat, 11/07/2015 - 16:40 | 6762061 Bernoulli
Bernoulli's picture

The guy is about 17 times more knowlegeable, smart and eloquent than all these people he has to talk to on TV all the time.

How does he not go crazy?

Sat, 11/07/2015 - 16:53 | 6762067 SSRI Junkie
SSRI Junkie's picture

.

Sat, 11/07/2015 - 17:10 | 6762068 falak pema
falak pema's picture

The 2008 crisis came from a unilateraist, hubristic mindset born under Reaganomics and subsequent NWO.

American exceptionalism became Gordon Gekko and greed; married to Rambo delusionism that spawned Nicaraguan Contra and Iran butt bashing and then led to Talibanism and Al-Qaeda as blowback; now ISIS.

The FED was just the instrument; like Saud's Oil price deflation at RR's behest; which helped prime the pump of WS FIRE toxic, shadow banked pumped assets and destroyed the real economies of first world.

World Oligarchy under the aegis of US leadership; aka 'our way of life is non-negotiable', 'our money your problem' and '15% After tax ROE mantra as the SOLE and veritable purpose of corporate growth'; was the mantra that would dissolve western capitalism in this fiat spiral.

Friedman being the economic Shaman who fathered it and Greenspan its head fiat cannoneer.

Do not confuse Causality and the means (tools) to achieve it.

The subsequent QE and ZIRP after Lehman and TARP were just papering over the Saint Andreas fault of fiat's demise; in fact increasing the width of the hole inviting the coming fall to foggy bottom.

You will note that this mantra has spawned the tax havens, the short term casino plays, the exorbitant bonus schemes and the corruption of politicians held under the lobbyist gun in DC's cess pool. All a result of the IMPERIAL mind set. What defines civilization is POWER hunger of elites who think the sun will never set on their power matrix of deep state. The rest is just a means to that end.

Sat, 11/07/2015 - 18:30 | 6762290 falak pema
falak pema's picture

well the ZH forum is not like vintage wine. The longer you hold it in the bottle the moar sour it gets.

The truth is what it is and no witch can bitch to make it look like a mirage of what it isn't. There is no twitching of the past's pinocchio nose it won't get any shorter. Its time to  admit it has to be faced and the next generation of Americans, the young know that, even if the old are too bent or too spent to admit it.

Sat, 11/07/2015 - 23:16 | 6762943 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

I always like what you write, falak pema. I cannot understand why the downvoters are out en masse? I enjoy reading perspective that you offer, and I view you as a learned individual compared to most on Z/H.

Keep writing as long as I'm on Z/H, please.

Sun, 11/08/2015 - 18:43 | 6765163 trader1
trader1's picture

falak, you have zhers who appreciate vintage over the (72) virgins.

+1

Sat, 11/07/2015 - 19:24 | 6762093 VWAndy
VWAndy's picture

Another cat with his hands tied. He for sure know what is taboo.

 

The coin has no actual value other than force. Dance around it all ya want. Its the coin of slaves.

 

 Some music? /www.youtube.com/watch?v=tXsxvdF481I

Sat, 11/07/2015 - 17:01 | 6762097 Rathmullan
Rathmullan's picture

Relic?? I think that's a bit harsh on Jim Grant's part. I believe the fed being "tradition" is more appropriate.

Sat, 11/07/2015 - 18:46 | 6762336 Wilcox1
Wilcox1's picture

The world's oldest game (right alongside it's oldest profession) is giving away free money. 

Sat, 11/07/2015 - 19:09 | 6762386 sam site
sam site's picture

As you say,

“The central banks no more than the rest of us can see into the future.  They are managed by human beings who do their best but who cannot -- underscore -- cannot see into the future and improve it before it happens. That's their conceit.” You speak of the holy reverence we all should give to academia.  Their arrogance was on display recently by three Boston College English Dept PhDs - experts on gender and race studies, that tried to shame author James Kunstler - through a proxy on Facebook.  Kunstler previously argued with the academics that blacks would succeed better if they learned common English and they didn’t need their own Ebonic Language that isolates them, promoted by misguided academics. This automatic reverence we are supposed to have for College Knowledge is undeserved.   Like the sacred academics running the Fed, these people are faking some special knowledge as seers into the future as Jim Grant refers to in the article, because they know all the principles and forces involved so no unforeseen accidents or something unpredictable occurs. Outside of some fields in Engineering that succeed in building roads, bldgs, factories, materials and electronics, most of college is a waste and is a colossal hoax that secretly serves the interests of several parasitic industries like the military, food and medical complexes but doesn’t provide a marketable or valuable service to anyone.

Great job Jim calling out the arrogant Fed.  The public is in for a rude awakening when they discover that these academics running the Fed and promoting the fraud called College Knowledge are just faking a special knowledge for as long as possible.

A Colossal Hoax.

 


Sat, 11/07/2015 - 19:25 | 6762414 teslaberry
teslaberry's picture

he is do eloquent and deft at handling changes of topic. he is amazing. so many years i'm watching him and this performance was so amazing. 

 

it's funny how they are bringing him on and giving him this pulpit. it makes me wonder......

 

just theatre? or something more?

Sat, 11/07/2015 - 19:35 | 6762452 Phillyguy
Phillyguy's picture

Western capitalism is fighting for its very survival. The economies of the US, EU and Japan are faced with daunting economic problems- including high unemployment, anemic job growth, austerity and increasing deficits. The response to these structural economic problems has been to i) cut taxes for the wealthy; ii) pursue an increasingly reckless and bellicose foreign policies (the US/NATO/GCC war theater now extends from the Levant, to Caspian Basin, Persian Gulf, China Sea (Obama’s “Asia Pivot”), Indian Ocean, Horn of Africa (war on Yemen), the Maghreb, to Eastern Europe and Russian border; and iii) keep (still) insolvent Wall St banks on life support, by transferring $ trillions from taxpayers to Banks, via the FEDs QE program. This money has inflated gigantic asset bubbles- stocks and trendy real estate in SF,NYC, LA, Boston, etc, which will inevitably crash, making the Great Depression look like a Sunday picnic, by comparison. The FED works for the team leaders- large financial institutions in the US, that direct foreign and domestic policy.

Sat, 11/07/2015 - 23:05 | 6762922 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

Jim Grant tells it like it is for the tenured Economics professorial class, but Jim Grant neglects to ascertain just what dismantled Ponzi Casino Crony Capitalism March 10th 2008 Bear Stearns time New York shitty.

Grant is smart, YES, but he fails to grasp Quantum Behavioural Economics as a player playing with Wall Street, their 'quants', failed 'masters of the universe', et cetera. Frankly, Grant looks extremely bright in terms of his words in this article, but he will never look at the first hour of Bear Stearns trading March 10th 2008 at 11:00am to 12:00noon. If he really understood what was going on he would know, as Mandelbrot knew, that there were quantum structural alterations to the prescribed orders, and magnitudes, of economic structures/architectures, on that day. The world was forever changed qualitatively, and quantitatively, on that day.

Sun, 11/08/2015 - 05:36 | 6763435 honestann
honestann's picture

Two huge mistakes:

-----

The federal reserve believes they can see into the future.

Not in the sense Grant means.  It is IMPOSSIBLE for a PhD to assert what will happen in the future, be wrong 100 times in a row, yet still believe they can see into the future.

Those "mandarins" (as Grant calls them) just pretend they believe their own predictions, while in fact they know perfectly well they make those predictions to manipulate weak-minded fools into taking actions that will enrich and empower the banksters and destroy everyone else.

But yes, the predators at the federal reserve can and do see that their actions will enrich and empower themselves and their masters in the near and medium term future.  They also know their actions will destroy everything good in the long term, but they don't care about the long term.

The federal reserve has good intentions.

Nothing could be more false... unless "good" is defined to mean "good for human predators" and "very bad for every honest, ethical, productive, benevolent human being".

Sun, 11/08/2015 - 11:21 | 6763965 InnVestuhrr
InnVestuhrr's picture

Impoverishing Effect (raising rates after 7 years) =
    Wealth Effect in reverse(after massive QE + ZIRP for 7 years)

None of the central bankers, ie market manipulators, are portfolio managers, I am. Regardless of their motivations and intentions, there is one very critical factor that they have not taken into consideration in their models and policies.

Assume for the moment only that it is OK to have a central bank with the power to manipulate the interest rate market, with the intention of using that power only in a very minimalist manner, only in a time of financial and economic crisis, eg sudden huge financial market sell-offs, natural disaster, sudden steep decline in economic activity, widespread bank runs, etc. Then a reasonable argument could be made for artificially driving interest rates to low levels for a very brief time only just to slow and stop the financial and economic collapse, ie an emergency mechanism ONLY.

BUT if interest rates are artificially driven to low levels for 7 years, THEN the result is that the entire financial and economic system is FORCED to adapt, conform, and come to a new stasis around the artificially low interest rates.

What that means in practical fixed-income portfolio management terms is that ALL the fixed-income portfolios will be loaded up with the fixed-income assets that HAD TO BE purchased during the insanely recklessly looooooooooooooooong pseudo "emergency" period of crushed interest rates, ie at very highly inflated prices and very low yields. This is because individual and institutional financial and economic activity cannot stop and wait unspecified years until after the interest market manipulators stop crushing interest rates, whenever that may be, because the "emergency" period is FAR TOO looooooooooooooooong. So retirees, insurance companies, pension funds, endowments, banks, etc, all of whom are required to invest in fixed income assets because of their situations and business models, are forced to buy those fixed-income assets at absurdly artificially high prices and low yields.

So if the interest market manipulators then raise interest rates, fixed-income asset prices will fall, and all of the fixed-income portfolios of retirees, insurance companies, pension funds, endowments, banks, etc, who were forced to buy the artificially high priced assets during the 7-year long "emergency" period are going to have LARGE unrealized losses. All of these portfolio owners are then going to be impoverished, and will have to hold their fixed-income assets to maturity to avoid selling at much lower prices and incurring large real losses. This will have a stifling effect on all of these portfolios and owners, and could be a problem for many of them, eg retirees who need cash to cope with illness, or insurance companies who need cash to pay for natural disaster claims, pension funds who need cash to pay for the tidal wave of retirees, etc

So wealth effect created by pushing interest rates down is replaced by impoverishing effect as the interest rates are raised.

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