Famed market analyst and historian James Grant is no fan of the current policies of the US Federal Reserve.
He recently wrote:
"Distortion in the cost of credit is the not-so-remote cause of the raging fires at which the Federal Reserve continues to train its gushing liquidity hoses. But the firemen are also the arsonists. It was the Fed's suppression of borrowing costs, and its predictable willingness to cut short Wall Street's occasional selling squalls, that compromised the U.S. economy's financial integrity."
At age 74, having lived through a number of economic booms and busts as well as having authored numerous books on the history of financial markets, Jim sees the degree of speculation, overvaluation and malinvestment in today's markets as about as bad as it's ever been.
He lays much of the blame at the feet of the Fed and its global central bank brethren, who collectively through their intervention have suppressed interest rates to their lowest levels in all of recorded history.
This has resulted in all sorts of unnatural distortions and deformations that are hollowing out our economy and social structure.
As Jim recently wrote:
"Needing income, investors will take imprudent risks to get it. And if 2% invites trouble, zero percent almost demands it."
Not only do 0% interest rates act as "molasses" on growth by gumming the system up with zombie institutions and toxic malinvestment, but it imperils the social good.
Savers and investors, increasingly desperate for yield, are forced to accept worse and worse choices in attempt to stay afloat.
Under this regime, the rich benefit disproportionately at the expense of everyone else AND it creates a "hyperinflation in the cost of retirement". This accelerating war on the 99% can not stand for much longer without serious consequences and repercussions.
We are thrilled Jim was gracious enough to come on the program this week. It was a huge honor to finally get to interview him (after years of attempt) and I can tell you firsthand, not only is he prodigiously smart, but he is ridiculously nice. A true class act.
But simply put, he's one of the most respected market analysts and historians on the planet.
So when an expert like him warns that today's markets are at one of the most dangerous levels of speculation in history, we all better be paying close attention.
James "Jim" Grant is an American writer and publisher and the founder of Grant's Interest Rate Observer, a twice-monthly journal of the financial markets. He is the author , most recently, of The Forgotten Depression: 1921: The Crash That Cured Itself. Grant's television appearances include "60 Minutes," "The Charlie Rose Show," Bloomberg TV, CNBC and other well-known financial news sources. His journalism has appeared in a variety of periodicals, including the "Financial Times", "The Wall Street Journal" and "Foreign Affairs."
Adam Taggart is the President and Co-Founder of Peak Prosperity. He wears many hats, but his basic job is to handle the business side of things so that his fellow co-founder, Chris Martenson, is free to think and write. Adam is an experienced Silicon Valley internet executive and Stanford MBA. Prior to partnering with Chris (Adam was General Manager of our earlier site, ChrisMartenson.com), he was a Vice President at Yahoo!, a company he served for nine years. Before that, he did the 'startup thing' (mySimon.com, sold to CNET in 2001). As a fresh-faced graduate from Brown University in the early 1990s, Adam got a first-hand look at all that was broken with Wall Street as an investment banking analyst for Merrill Lynch. Most importantly, he's a devoted husband and dad.