James Grant Likes Gold & Metropolitan Life

Grant founded his firm is 1983 and predicted correctly the Japanese bubble and housing bubble
• Tongue in cheek legal disclaimer is that “Congress shall make no law abridging the freedom of the press”

Jim Grant's First Idea: Metropolitan Life

• Metropolitan Life
o Japanese life insurers died out in long run.
o 825 billion of assets - a great franchise
o Long due to potential for dividend.

Jim Grant's Second Idea: Gold

• Gold: is a “legacy monetary asset”
• 1920 there was a depression (not Great Depression). 18 months after peak then industrial production jumped significantly
• "I'm a professional interest rate observer. There are none"
• Grant notes interest rates move in generational cycles

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 Discussing the 'Backward Shooting Gun' the Feds use and Black Walnut Tree treasury Replacements

A day before when talking about the expected implications that would arise from the Libor scandal, we mentioned that the Federal Reserve would be sued by proxy in the oncoming barrage of lawsuits and cases in the wake of the scandal. The Federal Funds rate basically sets the baseline for the Libor rate. The statement could not have been made at a better time as hours later, the most vocal critic against the Federal Reserve, Jim Grants appeared in front of worldwide national TV audiences and discussed exactly the same thing. The entire scenario was artistically summed up in a cartoon published in a Grant's Interest Rate Observer issue.

Presented below are some of the bullet points that Grant is famous for all over the world.

On the arsenal of the Feds

Jim believes that the Feds are not out of ammo but they are simply pointing the gun backwards and shooting at themselves.

On Libor and the Feds

The banks were responsible for fixing the Libor while the Feds fix the rates. The banks do this discreetly and with opportunity while the Feds do it as a profession.

On who deserves the real anger:

Jim believes that the anger should be focused on the central banks since the Feds are always talking about who might finance their bank. They also say that they manipulate the interest rates which is an absurd thought.

On the centrally planned reality show of the Feds:

Jim believes that this world is being governed under the rule of central banks and that they control each and everything that goes on.

On the perfect storm:

Jim is pessimistic about the coming perfect storm and the fiscal cliff and China, Europe and Greece but how is it a perfect storm if everyone seems to see it coming.

One remark that wont please any of our European readers here is that the trouble with Europe is not the shortage or Euros but the shortage of work hours – Europeans work about five hours a day.

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 Asks The "PhD Standard" To Allow Markets To Finally Clear

Jim Grant asks for a "return to capitalism", and the only way for that to happen is if markets are finally "allowed to clear".

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).