Saturday, December 27, 2008
In this report, I explore a remarkable article by Mr. James Grant that appeared in the December 20th edition of the Wall Street Journal. This article is remarkable because Grant correctly identifies the Fed as the source of current economic troubles and makes the case that, under a gold standard, we might have a different set of troubles, but we wouldn’t be facing an extinction-level event for finance. With the deft use of historical examples, he makes a strong case that our current ills stem from very common mistakes that have plagued central banking ever since it was first invented. I expand on several of his arguments to steer towards the conclusion that inflation lies in wait.
James Grant writes The Interest Rate Observer, a financial newsletter with an $850/yr subscription price. If you are not impressed by high numbers, then you might care that James Grant has been in the business a long time and has been especially good about providing a conflict-of-interest-free newsletter since 1983.
I always enjoy his commentary and consider him to be one of the best in the business.
Imagine my surprise to see him openly discussing the abolishment of the Fed in a Wall Street Journal editorial last week. And extolling the virtues of a gold standard. You could have knocked me off my stool with a feather.