James Grant of Grant’s Interest Rate Observer (www.grantspub.com and James Turk of the GoldMoney Foundation discuss the history and mission of the Fed, how mission creep has taken it wildly beyond its initial purpose into the territory of QE, ZIRP and other fiat currency experiments. They talk about who benefit from zero interest rates and how savers are penalized by this easy money policy. They explain that the US have been off the gold standard since 1913, Bretton Woods being only a shadow of the classical gold standard. In the last 40 years low interest rates have encouraged leverage and speculation, which have reached incredible levels. They discuss the fiscal profligacy of the US government. A solution to debt levels could still be found if the political will existed. US strengths and positive momentum could still be harnessed to save the dollar if people’s eyes could be opened. However they conclude that every paper currency in history has eventually gone to zero. James and Jim also talk about ZIRP and the absence of the bond vigilantes after over 30 years of bull market in bonds. How traders no longer care about fundamentals, like balance sheets, but rather focus on very short time horizons and the spreads between funding costs and yields. How this situation is unsustainable. They see gold still as a very under-owned, misunderstood and marginal asset still shunned by institutional investors, with a few notable exceptions which indicate that the tide could be …
James Grant and James Turk discuss gold, the Fed and the fiscal situation of the USA
June 11, 2011
@dskillz1 Spot on!! But Mr. Grant is well aware. See his other interviews.
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@jgbloyd It isn’t a matter of intelligence. It’s that the ordinary average joe doesn’t want to think he has to stand guard against the wolves within his own government. We like to do what we do; others will watch the store.. right? We believe that good will prevail, and we’re the good guys (as a collective). No need to bash Americans. Except for our naivete. But bash the corrupt and or dumb politicos all you want!
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@modelmark hahaha!! Well done!!
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@RadoslawSzymanek Quite the opposite! The ‘uprisings’ are a well-concerted coup against the west, capitalism, freedom and jews. The muslim brotherhood and other muslim factions, socialists and other anti-American are acting while we’re weakening. Obama and the liberal socialist dems all seem to be helping them. George Soros is happy.
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@peppegg a genius mind
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@packoo Indeed, he looks way younger than he is!
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Are they sitting in front of a green screen?
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The US Dollar has retained the reserve currency this long because of its military power; its gunboat diplomacy and its willingness to use force whenever its interests (and those of the dollar) are threatened. In the name of freedom and democracy, of course.
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grant has strings attached to???
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Great interview but c’mon guys… normalise your audio (without clipping).
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Bond rates are negative and the FED buys them all up. Yeah, great bond market chumpz!
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James Grant talkin bollockz. Walt Disney? Come on now, grow up.
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God the sound sucks, have to crank up the volyme, still low sound 
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@JimbobOMG
He is 65? I would guess 40
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Is it me or does James Grant look a bit younger than 65?
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@jgbloyd True, but I look at 2 things – the literacy levels of the USA have plummeted since the early 1900′s. You can pick the metric you want, the literate performance of the average American with the English language has fallen off a cliff. Also, the massive propaganda campaign necessary to get the USA into WWI, and then there was still vicious opposition to the League of Nations as well. Now, we go into Libya on the diktat of one man, and no one cares. I think we’ve lost our way.
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good video. i like grant, he also gives the side of how the status quo thinks and why.
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Thank you for this very articulate interview by 2 very nice respected men.
My question is that if gold goes to $2,500 and a gold standard is bought back in what will happen to the value, will if drop and who will set the standard.
The FED is obviously a secret fraternity of a brotherhood, so how do we get rid of this cancer that is destroying the world to feather the pockets of a selected few.
Philip Sigglekow author
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I do not agree with Grant in one aspect. The dolar is backed by US military. US military is behind it, any government that is trying to ditch petro dollar is being attacked (Iraq, Libya).
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If I could Live 150 years then coming out of this in 25-50 years would mean I have to suffer 1/6 to 1/3 of my life expectancy because of others. Since I only have approximately 20 more years I’m screwed because politicians are Corrupt Moran’s. Someone needs to PAY!
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“until congress finally gets it and some politician comes out on TV and says..”
I finally got it, it turned out I was spending like a drunken sailor on your money and I did not realize I was doing it. Many people have tried to explain me on the way, but now we are quazillions debt, finally someone found the right way of formulating the fact that I AM STEELING FROM YOU. It was just so complicated, that I did not understand.
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very enjoyable – Thanks v much
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@dskillz1 Yes, there are those who are guilty as charged, however, a smart people aren’t so easily fooled. I doubt American masses were ever really as smart as we give them credit. Looking back, I can’t think of any one year that I would point to and say, oh, see how smart the population was then before the corruption?
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Even better than a gold standard is simply gold. No need to invent a new currency pegged to gold, just use gold, yo. Gold standards are for people who want your gold while you trade in their paper, not for market efficiency but for the spread. Btw, thanks Turk for offering us a geniune bank where gold can be held as gold!
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Mr. Grant, one of the reasons is also the deliberate dumbing down of America. The ersatz Progressives did to the education establishment what they did as well to the financial world. See John Taylor Gatto’s work for more information.
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