Jim Grant: Europe Debt Crisis Means More Money Printing

Jim Grant believes that the ECB is likely to print more money and purchase Italian government bonds.
He then talks about the federal reserve and also says to avoid farmland (in the US) as it is now overvalued in many places and he points out that the current farmland rental yields of around 2 to 2.5%, are the lowest in 40 years.


 

He is worried that the debt crisis may turn to a currency crisis at anytime. In his opinion all major currencies (USD, EUR, JPY and GBP) are racing to the bottom and it's difficult to see which one will get there first. He is surprised by the euro’s strength even though it is in the spotlight but he believes that it might soon start to weaken as ECB punish its value down by money printing and low interest rates.

James Grant originated the "Current Yield" column in Barron's before founding Grant's Interest Rate Observer in 1983. He is the author of five books, one of which is Mr. Market Miscalculates (Axios Press, 2008).

Jim Grant: Capitalism Is An Alternative For What We Have Now

Jim Grant is awesome in this important interview with CNBC's Maria Bartiromo. Below are just some excerpts from it:

Maria Bartiromo: "What are the alternatives?"

Jim Grant: "Capitalism is an alternative for what we have now. I highly recommend it."

Maria: "We all do."

Grant: "No we don't."

Maria: "The Federal Reserve may not."

Grant: "We ought to be discussing an intelligent move to a sound currency by which I mean a currency that is based on a standard and not at the whim and the discretion of a bunch of mandarins sitting around Washington D.C."

James Grant originated the "Current Yield" column in Barron's before founding Grant's Interest Rate Observer in 1983. He is the author of five books, one of which is Mr. Market Miscalculates (Axios Press, 2008).

Jim Grant hates bonds and warns investors

As written in the Grant's Interest

Rate Observer

, the U.S. has 3.3 times more Treasury debt outstanding than a decade ago, yet the yield demanded by the market has fallen by two-thirds, from 6.1% to 2%. The market won't always be so accommodating. Someday, when the market demands higher interest rates or, worse still, refuses to buy new debt at any price, USA situation will quickly get out of hand. Still the problem is different in the Eurozone. Because countries such as the U.S. and Japan are obligated to creditors in their own currencies, they would likely prefer the risk of inflation and possible devaluation of their currencies over the option to default. In the Eurozone, because countries issue debt in a common currency that none of them alone controls, there is no easy way out for one overleveraged country: the only choices are to undergo a restructuring (like Greece); a rescue by the European Central Bank (which, at various points, has been a buyer of sovereign debt issued by Greece, Ireland, Portugal, Italy, and Spain); or withdrawal from the Eurozone and reinstatement of their previous national currency.

James Grant originated the "Current Yield" column in Barron's before founding Grant's Interest Rate Observer in 1983. He is the author of five books, one of which is Mr. Market Miscalculates (Axios Press, 2008).