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Friday, March 29, 2024

“Today’s Rates, the Lowest in 4,000 Years, Harm Savers, Advantage Speculators, Misdirect Capital, and Perpetuate the Unnatural Lives of Failing Businesses…”

Courtesy of Pam Martens

James Grant

James Grant

The headline above was Point Number 6 in a multi-point Tweet offered by Grant’s Interest Rate Observer on November 18 of last year on how the Fed has grossly distorted markets. The 4,000-year claim is derived from the seminal book on interest rates, Sidney Homer’s A History of Interest Rates, Fourth Edition, co-authored by Richard Sylla.

One of our readers recently sent us a link to a fascinating interview with James Grant, the Founder and Editor of Grant’s Interest Rate Observer. The interview was conducted in February by Consuelo Mack for the PBS program, WealthTrack.

We listened carefully to the interview and were delighted to see that over the more than three decades that Grant has been chronicling the Fed’s thumb on the scale, the powerful forces on Wall Street have failed to compromise his voice. If anything, Grant has become even more outspoken in his Fed views.

At one point in the interview, Grant says that the attitude of Grant’s Interest Rate Observer toward the Fed is similar to how the Chicago Tribune viewed the Purple Gang of the 1920s. (The Purple Gang was a group of mobsters.) Grant adds this to his assessment of the Fed: “So we have an omnipresent, ubiquitous and all-powerful institution. You have to be on its good side if you’re on Wall Street.” (Since the mega banks on Wall Street literally own the most powerful arm of the Fed, the New York Fed, it could be said that the Fed has to remain on the good side of Wall Street.)

As for the timidity, if not mesmerized worship, that the press bestows on each utterance from the Fed, Grant offers this:

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