How times have changed. It wasn’t many months ago that the entire financial world was singing the praises of inflation. The greatest fear among Wall Streeters and other financial lights was lower prices that might actually decline more and turn into that monster known as deflation. The thought conjured up nightmarish scenes of bread lines and bank runs.
Ever since the global financial crisis of 2008 and especially since the Covid pandemic, central banks and governments around the world have pulled out all stops to prevent such an occurrence. And guess what? It finally worked. After declining since the early 1980s, inflation has roared back to life, recently hitting 40-year highs.
But no one is celebrating. In fact, now central banks around the world have declared war on inflation, and Federal Reserve Chairman Jerome Powell is leading the charge. The Fed has dramatically raised the federal funds rate several times this year, with more action to come.
This week’s guest has long been an avowed enemy of inflation and an outspoken critic of the Fed’s inflation-boosting policies. How is he feeling now? He is financial thought leader James Grant, the Founder, and Editor of Grant’s Interest Rate Observer. Grant is also the author of 9 books. Several are financial histories, including the prize-winning The Forgotten Depression: 1921: The Crash That Cured Itself.
Grant will discuss the Fed’s about-face on inflation, the battle it faces to bring it under control, the implications for financial markets, and two investment ideas for this new investment era.
Rev1
00:00 Hello!
00:35 Introduction
02:29 Interview with James Grant
23:04 One Investment
24:14 Action Point
WEALTHTRACK #1912 broadcast on September 16, 2022
More info:
In his WealthTrack interview and a recent issue of Grant’s Interest Rate Observer, Jim Grant highlighted the small-cap equity fund Palm Valley Capital Fund (PVCMX), which holds mainly cash “awaiting the return of valuations at which an unbending, unconventional, uncompromising, value-seeking investor can put other people’s money to work.” Grant also recommended reading the firm’s quarterly letters to shareholders, “some of the best and wittiest financial-markets commentary on the web.” Here is a link to the firm’s most recent missive.
Bookshelf:
The Trouble With Prosperity: The Loss of Fear, the Rise of Speculation, and the Risk to American Savings:
Money of the Mind: Borrowing and Lending in America from the Civil War to Michael Milken:
The Forgotten Depression: 1921: The Crash that Cured Itself:
#thefed #interestrates #inflation #jimgrant #jamesgrant…(read more)
LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
I think the Fed pumped inflation to avoid the great deflationary spiral that still awaits.
The Fed has announced its intend to fight inflation, and the inflation measurements are gradually trending down. It is way too late for Consuelo to suggest inflation protected securities in her Action Point. She should not have recommended it, and should follow Grant's suggestions instead.
Excellent excellent guest. Would be great if we can have him more often.
In his answers, Jim Grant left some cues on what to ask next. If Consuelo had picked up those, instead of following her prepared list, perhaps we could have gone more in depth in some topics. Grant is the kind of interviewees who leaves bread crumbs for the interviewer to follow, to the real juicy points of view.
Since political leaders still don't grasp the root cause of inflation, or refuse to acknowledge it, the economy will continue to wind down. There is nothing you can do about it as long as government refuses to slash spending. It's certainly possible too to eliminate more than a handful of government agencies. Public union pensions are going to substantially wreak havock too as pension funds in general fall further behind their needed returns. Hoping government will bail anyone out is beyond laughable. It's mental illness to believe in such fantasies.
Thanks for the subtitle!!
This CPI report is a colossal failure. Yes, to bring the stock market to a halt, the FED will have to pull all the stops. The unfortunate issue is that other markets are being decimated. If you really want to make progress, you have to rely on a smart diversification and honed trading skills. Currently up 14% and being careful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest.
James Grant is always a great font of financial wisdom. Thank you both for your efforts!
James Grant truly is a wise man.
Interestingly Jim said "gold is cash", then proceeded to promote cash, but not gold, as an essential part of today's portfolio. That says more about gold than about cash.
Mr Grant is one of the few in the mix whose words can be trusted. Good on ya James
How does Mr. Grant account for full employment while having a severe supply shortage (war and pandemic driven) driving up prices when for so many years the monetary stimulus produced zero inflation. Without the supply chain damage this inflation does not happen. Mr. Grant has been preaching doom and gloom for most of my adult life.
Excellent interview
Great interview, great ideas!
Is that why The Powers That Shouldn't Be want to ban cash?
Raise the Federal funds rate to 10%. It's time for cash investors and bond investors to get paid.
Two legends talking about important points!God bless!
Excellent interview but don’t know about his dress sense
deflation is super rare. was disinflation the correct word?
There was no need for volker to do what he done.
Inflation numbers are lagging people are talking the markets down. Deflation will be the norm soon.
Consuelo, today James Grant encouraged us to have some cash for the times when "Mr. Market occasionally gives the great gift of value, a rare thing today in the midst of elevated prices and multiples." So, my question is, "How can we recognize value? I thought I was getting a particular equity at a great price 14.1% higher than it's dropped to today. How do I know if today's price is a "great gift of value" or whether it will drop another 14% or even more?
Have cash and be ready to accept the gift of lower prices, great thoughts!
Biden's lack of discipline put us in this position with his 12trillion in spending. Stop blaming covid19. It's all because the US is spending to much money.
Consuelo Mack is a first rate interviewer! She asks excellent followup questions. Great show!
Jim is a national treasure. He needs be cloned.
He has proved one can be intelligent AND stupid.
Grant is a legend
" Macro-economics is at best a pseudo science" Jim Grant
Fabulous interview conducted by Consuelo
Let's hope the Fed is not engaging in double speak – Speak like Volcker, Act like Burns?
I wish WealthTrack program was a MUST VIEW program as a part of our young people's financial literacy program (grades 6-12).
The obvious question should be; how should one invest while the cornpop administration is actively destroying the economy? Everything else is window dressing.
Excellent interview indeed! I do hope that you will bring back James Grant for a further interview.
James Grant is a wealth of knowledge and always refreshing to listen to!