Eric King:  “The idea that the Fed can gracefully exit QE, and they’ve been selling this for quite some time, Jim, I wanted to get your thoughts on that?”

Grant:  “Well, anything is possible.  As I indicated a moment ago, one becomes more agnostic or at least humbler in the face of the future the more birthday candles one blows out.

But it is a matter of record that the Fed has shown not much judgment with respect to future events....

Continue reading the Jim Grant interview below...


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“It (the Fed) famously failed to see what some of us regard as the most obvious bubble of our lifetimes, namely the terrific distortions in residential house prices, and in residential mortgages.

So, to say the Fed is going to gracefully and without cost exit its policy of unprecedented money creation and experimentation is to give the Fed many, many benefits of the doubt.  And I think it’s prudent to prepare for an ungraceful, noisy, and distorting exit.

For that reason I continue, for example, to be bullish on gold and gold stocks, although one can hardly bear to say those words most days.  They’ve been very disappointing.  But I think they represent prudent (investments), if currently depressed, and for that reason perhaps more interesting than if they were elevated. 

But certainly prudent investments in the possibility of monetary disorder.  And with central banks the world over doing what central banks certainly in the modern age have never done, it seems to me only prudent to have some hedge against unscripted events.”

Eric King:  “Where does this end?  When you see central banks going in and manipulating the way they are, and it feels like they have a hand in all of these markets now, perhaps it’s just the distortions you were speaking of, but where does that lead us in the end?  Is there a train wreck coming?”

Grant:  “There certainly is a day of comeuppance in so far as the prices we see are not the prices that genuinely serve to clear markets.  So in so far as values are distorted, those values will finally reflect some sort of logical, fundamental equilibriums eventually. 

I hope it doesn’t involve a train wreck, but what we don’t know about the future is ever so much, Eric.  And if you live long enough, the more you live, the less you realize you do know about the future.  But I have a great deal of conviction that manipulated markets are bad for the health of the people who speculate in them, and bad for the people who depend upon them for economic signals.”

This was part I of a series of written interviews which will be released with Jim Grant today on KWN.  Grant discusses gold extensively, the end of the current monetary system, Fed and central bank policy, distortion, and the tremendous challenges the West faces going forward.  The remarkable KWN audio interview with Jim Grant is available now and you can listen to it by CLICKING HERE.

© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

The audio interviews with Jim Grant, Michael Pento, Egon von Greyerz, Andrew Maguire, Art Cashin, William Kaye, James Turk, John Hathaway, Dr. Paul Craig Roberts, and MEP Nigel Farage are available now.  Also, be sure to hear the other recent KWN interviews which include Eric Sprott, Marc Faber and Felix Zulauf by CLICKING HERE.

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