James Grant is the editor of Grant's Interest Rate Observer and author of the book "Mr. Market Miscalculates: The Bubble Years and Beyond."
During an interview on Bloomberg Television about the new nominees for the Federal Reserve Board of Governors, Grant rips into the Fed hard, obviously surprising his interviewer. It's definitely must watch TV!
Grant begins with the obvious, that the Fed will keep printing money, regardless of consequence. He says nominee Janet Yellen is the perfect candidate, because she'll merely be a "consensus member," agreeing with Bernanke on every decision. Grant then rips nominees Peter Diamond and Sarah Bloom, saying they're "not formidable thinkers."
He finishes the interview (to the surprise of his host), pointing out the fact that the U.S. dollar is a faith based currency, with no intrinsic value, that is constantly manipulated by the Fed.
H/T - Jim Grant Makes Bloomberg Interviewer Raise Her Eyebrows.
More from James Grant here:
- James Grant: Stick Bankers With the Bill
- The Austrian-style Business cycle in one lesson
- Bad Medicine
Robert Wenzel also offers some valuable insight into the Fed Board of Governors.
On the Incoming New York Fed Chairman
Lee Bollinger will become the New York Fed chairman in 2012 ... Since he has no background in finance or economics ... he is just the way Ben Bernanke likes them ...
Even worse, he is, in general, a Big Time interventionist as witnessed by his July 14 op-ed, which appeared in WSJ and was titled, Journalism Needs Government Help ...
The institutions of the press we have inherited are the result of a mixed system of public and private cooperation. Trusting the market alone to provide all the news coverage we need would mean venturing into the unknown—a risky proposition with a vital public institution hanging in the balance.
Most absurd, even though he is President of Columbia University, he writes:
There are examples of other institutions in the U.S. where state support does not translate into official control. The most compelling are our public universities and our federal programs for dispensing billions of dollars annually for research. Those of us in public and private research universities care every bit as much about academic freedom as journalists care about a free press.
This guy is so entrenched in the system, he has no clue as to how much influence the government has over education. I would like to see Bollinger explain why, with the supposed health crisis, the number of medical schools are so limited. I'd like for him to explain why herbal medical treatments are not taught at any major American universities. I'd like him to explain why despite the fact that Austrian economists more than any other group warned about the present economic train wreck, it is nearly impossible for them to get teaching positions at any of the top universities ...
The idea of propping up newspapers is the act of the desperate elite. Under the newspaper system it was easy for government to influence the major papers. Now with the internet, there are a thousand of eyes and ears reporting. Government can't control the flood of reporters. Internet readers are doing fine without the mainstream propaganda. It's the elite that have a problem ...
See also: The Federal Reserve’s Bought and Paid For Economists.
I like Mr. Grant's matter of fact -ness and his bow tie. I'll have to check out his work.
Grant's very good and always worth listening too. He's more optimistic than I am right now, but he's a smart man.
The reason Bernacke does not want an audit is because a major source of income that is not on the books would be discovered.
The national economy, since 1913, is based upon a Ponzi scheme.
Every “dollar” in circulation is created based upon debt. Congress gives T-securities (bills, bonds, or notes) to the Federal Reserve, and the Fed credits the Treasury’s account with the value of the securities. Voila !!! New fiat money. Congress can spend up to the limit of the account and the Fed will honor the checks.
The problem is that the arrangement obligates the US to pay interest on the principal thus generated. The interest has never been generated. It does not exist. It is impossible to culminate the agreement. The only way the interest can be paid is to generate more principal and pay the interest on the initial securities from the principal on the later securities. It is the classic Ponzi, par excellence.
If a Ponzi scheme does not expand, it totally collapses. Additional expanding at this time merely postpones the inevitable collapse.
Mathematical details on the rip-off by the Fed, including how the Fed obtains the ENTIRE VALUE of ALL issued securities (off of the accounting records) is posted at http://www.scribd.com/doc/43482648/rip-off-by-the-FR
and http://www.scribd.com/doc/43465593/QE2-Rational-Course-of-Action