The bow-tie-and-bespectacled Jim Grant once again takes the centrally-planned 'Office of Unintended Consequence' (aka The Fed) to task in a thoughtful exchange with Capital Account's Lauren Lyster. Reflecting on his recent opportunity to speak directly to various Fed officials, he found one particular question (on the perceived 'mass starvation' that occurred in the brutal earlier Depression beginning in 1920 which ended rapidly without the need for monetary stimulation) most disturbing in its summation of the central bank's 'Atlas Complex' - or how would we get up and go to work in the morning without them. The attitude of our Monetary Priesthood, he analogizes, is that unless they are active in their prayers and devotions, who knows what might happen? Grant goes on to discuss the hypocrisy of Bernanke (noting the importance of free market prices to his students and yet controlling interest rates overtly in the market-place) and highlights interest rates role as the traffic light signal in a market economy providing a critical input to our perception of value in stocks, bonds, real estate, Silicon Valley Startups, and so on and because these rates are manipulated we live and invest in a hall-of-mirrors leaving us with a distorted vision of the real-world. He notes that Americans, as typically recklessly joyous investors in growth, "remain in a miasma of anxiety due to the extreme unpredictability of policy action and this is what creates the tail risk of doubt and apprehension." Looking to the future he sees the constitutionality of Obamacare and the elections as a critical test in the war against supply and demand that is being waged by our central bankers and government.
Starting at around 1:50, Capital Account's Lauren Lyster begins by introducing Jim Grant's reflexive perspective of the world in a rather eloquent brief on just how our centrally-planned economy has veered from any notion of true capitalism.
The interview with Jim Grant begins at around 4:30