We are in uncharted waters, in terms of low and negative interest rates and seemingly worldwide and unprecedented currency devaluation. While Grant is reluctant to offer timing for the next correction, in what he calls the “default cycle,” he believes the US economy is already overdue. He also fears the next correction could be even more severe and long lasting than the previous one.
What can past market crashes teach us about the current one?
Jim Grant – Next Correction: Defaults Ahead
This is Fergus Hodgson with the gold news the podcast joined by Brian London. We have James Grant to Jim Grant of Grant’s Interest Rate Observer on the line. He has been in this business or at least with his organization since 1983. The ERA was born. So you got some experience some experience there. His books include works of finance history and biography. And there’s a whole list there will include these on the show. Go to gold newsletter dot com for Slash podcast. Jim welcome back to the show. First nice to be here. Great. Brian you mentioned that we have a special deal on for the Observer. Well the interest rate observer. Jonah explain what that is.
Yeah we work with Jim and he’s kindly offered a special opportunity for our listeners that they subscribe to his newsletter and we’ll have a link in the show notes don’t get the audio video recordings from his big conference on October 9th for free. And that’s just an incredible gem. The people that you have Stanley Druckenmiller or Bill Ackman, James Bianco, Edward Chancellor goes on and on and on. It’s just remarkable to me and you know as host of The New Orleans conference on very attuned to what it takes to put on an indefinite ban you just do an incredible job of this.
All right. Both are 35 or thirty fifth anniversary conference and so people I think will get their money’s worth that they will not get the live champagne toast to the readers grants which will conclude the conference that everything else is there for the watching.
Well at thirty five years I guess that makes you the second oldest investment conference in the world next to a New Orleans event.
Yes well I think you’ll agree Brian there’s this much too much crowding in this field now it seems like every third person and every sick child has his or her own investment conference. It’s getting quite worrying. I think the legacy people just simply must carry on do what we must.
And you know I have lots of people that just to say a number of colleagues in my little gold oriented Mani stuck area of the market all of a sudden are having conferences and I tell them oh please ask the first because it’s. And I’m sure you’re feel this as well doing it so long you have to keep going it. You’ve been doing this so long. We have to keep doing it. But I would discourage anyone from getting into the business because it’s just not a great business to be in. There’s so much profit margins are just paper thin the amount of time effort and resources plus you have to you know sign away a good portion of your net worth to a hotel and this big party in hopes people come.
Well we sell like to farmers talking down the track. So like let’s move on to something more constructive shall we.
Absolutely. Jim Beam I mean you’ve been in this 35 years or at least with your publication. I get the sense we’re in uncharted waters sometimes in uncharted territory.
Oh yes yes.
Doing a comment just briefly on the fact that we have we still even after a decade since the Great Recession began we still are basically at near zero if not even negative real interest rates.
Yes it is a singular world. There is a page turner of a book called The History of interest rates. I suspect that for you and Brian have Coffey’s by her bedside as do I subtitles is 2000B.C. to the presence of 3000 years of history of interest rates and you could turn those pages all day and not encounter an episode in which substantial volumes of sovereign debt not Treasury bills. But no proper notes or bonds were quoted at nominal yields of less than.