Taps Coogan – June 26th, 2022

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Mr. Jim Grant, creator and editor of the esteemed Grant’s Interest Rate Observer, recently joined CNBC to declare “interest rate liberation day,” as the Swiss central bank, the ECB, and the Bank of Japan struggle to hold on to negative interest rate policy as the world exits the “hall of mirrors” of interest rate suppression.

 

Some excerpts from Mr. Grant:

“This is interest rate liberation day. The Japanese peg on its 10-year yield, 25 basis points, appears to have been broken or is breaking. The Swiss interest rate was just observed to have moved away a little bit from deep zero to more… than deep zero. My take on this is that fundamentally, interest rates being the most consequential prices in capitalism, they aught to be market determined and we have been living, certainly since the Great Recession, with… these important prices being administered by the central banks and it has given lovely bull markets but also I think wholesale misallocation of resources, or time, and of brainpower. It’s given of the great crypto delusion… I think we are leaving the hall of mirrors and that interest rates, to the extent that they are determined in the market place, will be the guide for the future, and that’s a good thing…”

“This is part of what we here at Grant’s call the value restoration project. Yes, it’s painful but it had to happen. There are opportunities in the wings and we aught not to get too discouraged…”

I couldn’t agree more. There is more to the interview, so enjoy it above. 

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