James Grant, Wall Street expert and editor of the renowned investment newsletter «Grant’s Interest Rate Observer», warns of the unseen consequences of super low interest rate and questions the extraordinary actions of the Swiss National Bank.

Nearly ten years after the financial crisis, extraordinary monetary policy has become the norm.

The financial markets seem to like it: Stocks are close to record levels and the global economy is finally picking up. Nonetheless, James Grant sees no reason to sound the all-clear signal. The sharp thinking and highly regarded editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» argues that historically low interest rates are distorting the

James Grant, Wall Street expert and editor of the renowned investment newsletter «Grant’s Interest Rate Observer», warns of the unseen consequences of super low interest rate and questions the extraordinary actions of the Swiss National Bank.

Nearly ten years after the financial crisis, extraordinary monetary policy has become the norm.

The financial markets seem to like it: Stocks are close to record levels and the global economy is finally picking up. Nonetheless, James Grant sees no reason to sound the all-clear signal. The sharp thinking and highly regarded editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» argues that historically low interest rates are distorting the

Retaken from Christoph Gisiger via Finanz und Wirtschaft,

James Grant, Wall Street expert and editor of the investment newsletter «Grant’s Interest Rate Observer», warns of a crash in sovereign debt, is puzzled over the actions of the Swiss National Bank and bets on gold.

From multi-billion bond buying programs to negative interest rates and probably soon helicopter money: Around the globe, central bankers are experimenting with ever more extreme measures to stimulate the sluggish economy. This will end in tears, believes James Grant. The sharp thinking editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» is one of the most ardent critics when it comes to super easy monetary policy. Highly proficient in financial history, Mr. Grant warns of today’s reckless hunt for yield and spots one of the biggest risks in government debt. He’s also scratching his head over the massive investments which the Swiss National Bank undertakes in the US stock market.
Jim, for more than three decades Grant’s has been observing interest rates. Is there anything left to be observed with rates this low?

Interest rates may be almost invisible but there is still plenty to observe.

Submitted by Christoph Gisiger via Finanz und Wirtschaft,

Kenneth Rogoff, Professor of Public Policy at Harvard University, postulates to get rid of cash. In his opinion, killing big bills would hamper organized crime and make negative interest more effective.
Kenneth Rogoff makes a provocative proposal. One of the most influential economists on the planet, he wants to phase out cash. «Paper currency lies at the heart of some of today’s most intractable public finance and monetary problems», he writes in his brand-new book «The Curse of Cash». In it, he highlights that today it’s mostly large scale criminal organizations that are still depending on cash to go after their business. Also, in a world without big bills negative interest rates would work much better, argues the professor at Harvard University. In an extensive interview, he’s also expressing severe concerns about the banking system in Europe and about the economic slowdown in China

Professor Rogoff, you are proposing to get rid of cash. Why?

I actually favor a less cash society over a cashless society. Currency has a lot of important uses which are not so readily replaced in the foreseeable future. The use of cash in the legal economy is very concentrated in small purchases where I guess it’s convenient.