Central Banks Are Trapped In A Loop Of Radical Intervention

When asked by Bloomberg why he buys gold, Jim Grant explained that he is investing in monetary disorder. This disorder is already in motion, caused by central bankers who don’t understand that interest rates are actually a price. Manipulating interest rates is a type of artificial price control, which Grant warns always ends in disaster.

Gold is something to hold as an investment in the disorder of money as manipulated and managed by central bankers… One can observe that nominal interest rates without adjusting for anything were far higher during the Depression than they are now. These are the lowest nominal interest rates… in the history of the world. “

 
BPlayer(null, {“id”:”R00JvMS1Rwe55J4bgkTilw”,”htmlChildId”:”bbg-video-player-R00JvMS1Rwe55J4bgkTilw”,”serverUrl”:”http://www.bloomberg.com/api/embed”,”idType”:”BMMR”,”autoplay”:false,”log_debug”:false,”ui_controls_popout”:false,”wmode”:”opaque”,”share_metadata”:{“canonical_url”:”http://bloom.bg/1Mfo5O5″},”use_share_overlay”:true,”video_autoplay_on_page”:false,”use_js_ads”:true,”ad_code_prefix”:””,”ad_tag_gpt_preroll”:true,”ad_tag_gpt_midroll”:true,”ad_tag_sz_preroll”:”1×7″,”ad_tag_sz_midroll”:”1×7″,”ad_tag_sz_overlay”:”1×7″,”ad_network_id_preroll”:”5262″,”ad_network_id_midroll”:”5262″,”ad_network_id_overlay”:”5262″,”ads_vast_timeout”:10000,”ads_playback_timeout”:10000,”use_comscore”:true,”comscore_ns_site”:”bloomberg”,”comscore_page_level_tags”:{“bb_brand”:”bbiz”,”bss_cont_play”:0,”bb_region”:”US”},”vertical”:”business”,”ad_tag_overlay”:”business/videooverlay”,”use_parsely”:true,”source”:”BBIZweb”,”start_muted”:false,”module_conviva_insights”:”enabled”,”conviva_account”:”c3.Bloomberg”,”zone”:”video”,”ad_tag_cust_params_preroll”:””,”width”:640,”height”:360,”ad_tag”:””,”ad_tag_midroll”:””,”offsite_embed”:true});Highlights from the interview:

“If the market is missing anything, in my opinion – and one yields always to the market’s final judgment; that’s where the P&L is – it seem that error is classifying gold as a commodity, rather than a monetary asset. It’s a currency. It competes with the issuance of the world’s central banks. The world’s central banks are – again, in my opinion – in thrall to doctrines that are ultimately destructive to the currencies they emit. So it seems to me that gold is a great long-term – not a hedge against monetary disorder, because I think we have that – I think it is an investment in monetary disorder…