Grant attributes the lack of massive price inflation in spite of money printing in the U.S., and around the world to three primary factors: (i) “re-channeling of redundant dollars into financial assets and real estate,” as opposed to other assets (ii) “worldwide competition for labor,” which consequently keeps the prices of goods down and (iii) the fact that the dollars that the Federal Reserve has created “have…been cooped up in the financial system rather than circulating in the economy because the banking system has been impaired, and the regulators have seen to it that loans are not so freely forthcoming as they might have been otherwise.”
Grant noted however that we should consider the question “in the absence of these really really radical monetary policies, mightn’t prices have been dwindling?” He continued, “[I]f rate inflation now is say, one percent (1%), and if it otherwise would have been minus two percent (-2%) because of the worldwide integration of labor markets, because of the wonders of digital technology, then that increment of what might have been and what is could be seen as a kind of inflation.”
Nevertheless, for Grant, quantitative easing in and of itself has sown the seeds of the destruction of the dollar and other currencies. Grant stated [during a portion of our discussion that you can find below beginning around 26:46]:
[If] the monetary authorities are intent on depreciating the currency, then I think that in the fullness of time they will succeed all too well.
…The important thing about QE [quantitative easing] is this idea, this radical precedent is now on the books — the virus as it were is in the monetary bloodstream.
And next time there’s a problem, what are they going to do? I mean what will they do? They have done more and more at every crisis juncture since the early 1990s.
Read the rest here...
http://bit.ly/1ucPiqc
Grant noted however that we should consider the question “in the absence of these really really radical monetary policies, mightn’t prices have been dwindling?” He continued, “[I]f rate inflation now is say, one percent (1%), and if it otherwise would have been minus two percent (-2%) because of the worldwide integration of labor markets, because of the wonders of digital technology, then that increment of what might have been and what is could be seen as a kind of inflation.”
Nevertheless, for Grant, quantitative easing in and of itself has sown the seeds of the destruction of the dollar and other currencies. Grant stated [during a portion of our discussion that you can find below beginning around 26:46]:
[If] the monetary authorities are intent on depreciating the currency, then I think that in the fullness of time they will succeed all too well.
…The important thing about QE [quantitative easing] is this idea, this radical precedent is now on the books — the virus as it were is in the monetary bloodstream.
And next time there’s a problem, what are they going to do? I mean what will they do? They have done more and more at every crisis juncture since the early 1990s.
Read the rest here...
http://bit.ly/1ucPiqc
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