Jim Grant on Bloomberg TV (18/7/11) – On US Treasuries, European Sovereign Debt & The Gold Standard

Jim Grant was on Bloomberg TV on 18th July. He spoke about US Treasuries, European Sovereign debt and the gold standard. See below for the video and summary.

 

 

Summary:

 

  • The debt ceiling crisis is contrived — it is a ‘political bottleneck’. ‘Something will be done to push back the resolution of our mounting debt problems’.
  • US Treasuries have been shrugging off these contrived problems. ‘The Treasury market is operating on muscle memory… people have come to view Treasuries as intrinsically safe…’
  • We should go forward to the gold standard.
  • The PhD Standard is the antithesis of the digital age. The collaborative digital age is an echo of the gold standard. We have backtracked into the present-day monetary system.
  • ‘… [The gold standard] is going to happen’. The gold standard is a better monetary system. Although the current heads of monetary affairs are well-intentioned, they seem to be printing money based on convictions that they — mostly — are imagining.
  • The United States consumes much more than it producers, it pays for the deficit with printed currency. This printed currency is absorbed by Asian central banks, which they then use them to purchase US Treasuries. There is no market check!
  • The reason to worry about the US is because of its privilege as the reserve currency issuer.
  • The president of the ECB invokes a technical objection to facing the fact that Greece (and all) are insolvent.
  • The Wall-marts of the world are cheap.

See here for our collection of rare historical economic data.

Posted Jul 20, 2011
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