In Episode 221 of Hidden Forces, Demetri Kofinas speaks with Jim Grant, the founder of Grant’s Interest Rate Observer: a legend in the business of investor education and financial media. What separates Jim from millions of his fellow financial journalists, commentators, and authors is the historical perspective that he brings, informed not just by the immense volume of books and periodicals that he’s consumed over the course of his lifetime, but primarily by the wisdom of his own lived experiences and lessons learned from the experiences of others that he’s had the privilege to know and interview over the course his life.
Given the ongoing controversy around inflation—its causes and consequences—we couldn’t think of anyone better to talk to than Jim Grant. Jim has been warning his readers about the unintended consequences of overly-accommodative Fed policy and dollar debasement for as long as we have known him and he is uniquely positioned to provide us with the historical context to understand where we find ourselves in the present cycle. What we came to this conversation wanting to know from Jim, as someone who has lived through at least 3 major credit cycles, is if in fact he feels that this inflation is not transitory. If in fact, he thinks that we are in the process of up-anchoring inflation expectations and what this means for the Fed’s policy options, with important implications for assets like stocks, bonds, cryptocurrency, etc., whose prices have depended on the free-flow of credit that becomes less readily available in an environment of rising consumer and producer prices.
This is a phenomenal conversation that will help you integrate the history of inflation and what we know about its causes into the unique circumstances of our modern political-economy, which is characterized by historically high debt levels, aging demographics, and technology-driven deflation, in a way that can make you a better, more thoughtful investor. Topics discussed during the Overtime include precious metals, cryptocurrency, meme stocks, ethics in journalism, and more. You can access that part of the conversation, as well as the transcript and rundown to this week’s episode through the Hidden Forces Supercast Page. All subscribers gain access to our premium feed, which can be easily added to your favorite podcast application.
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James Grant was born in 1946, the year interest rates put in their mid-20th century lows. He founded Grant’s Interest Rate Observer, a twice-monthly journal of the financial markets, in 1983, two years after interest rates recorded their modern-day highs.
Born in New York City and raised on Long Island, he had thoughts, first, of a career in music, not interest rates—french horn was his love. But he threw it over to enter the Navy. Following enlisted service aboard the U.S.S. Hornet, and, as a newly minted, 20-year-old civilian, on the bond desk of McDonnell & Co., he enrolled at Indiana University. There he studied economics under Scott Gordon and Elmus Wicker and diplomatic history under Robert H. Ferrell. He graduated, Phi Beta Kappa, with a Bachelor of Arts degree in economics in 1970. Next came two happily unstructured years at Columbia University that produced a master’s degree in something called international affairs but, more importantly, the privilege of studying under the cultural historian, critic and public intellectual Jacques Barzun.
In 1972, at the age of 26, Grant landed his first real job, as a cub reporter at the Baltimore Sun. There he met his future wife, Patricia Kavanagh, and discovered a calling in financial journalism. It seemed that nobody else wanted to work in business news. Grant served an apprenticeship under the longsuffering financial editor, Jesse Glasgow. He moved to Barron’s in 1975.
The late 1970s were years of inflation, monetary disorder and upheaval in the interest-rate markets—in short, of journalistic opportunity. It happened that the job of covering bonds, the Federal Reserve and related topics was vacant. In the mainly placid years of the 1950s and 1960s, those subjects had seemed too dull to care about. But now they were supremely important—even interesting—and the editor of Barron’s, Robert M. Bleiberg, tapped Grant to originate a column devoted to interest rates. This weekly department, called “Current Yield,” he wrote until the time he left to found the eponymous Interest Rate Observer in the summer of 1983.
Grant’s books include three financial histories, a pair of collections of Grant’s articles and three biographies. The titles are these: “Money of the Mind” (Farrar, Straus & Giroux, 1992), “The Trouble with Prosperity” (Times Books, 1996) “Minding Mr. Market” (Farrar, Straus & Giroux, 1993), “Mr. Market Miscalculates” (Axios Press, 2008) and “The Forgotten Depression, 1921: the Crash that Cured Itself” (Simon & Schuster, 2014), which won the 2015 Hayek Prize of the Manhattan Institute for Policy Research.
Also, “Bernard M. Baruch: The Adventures of a Wall Street Legend” (Simon & Schuster, 1983), “John Adams: Party of One” (Farrar, Straus & Giroux, 2005) and Mr. Speaker! The Life and Times of Thomas B. Reed, the Man Who Broke the Filibuster” (Simon & Schuster, 2011).
Grant’s television appearances include “60 Minutes,” “The Charlie Rose Show,” Deirdre Bolton’s “Money Moves” program on Bloomberg TV and a 10-year stint on “Wall Street Week”. His journalism has appeared in a variety of periodicals, including the Financial Times, The Wall Street Journal and Foreign Affairs, and he contributed an essay to the Sixth Edition of Graham and Dodd’s “Security Analysis” (McGraw-Hill, 2009).
Grant is a 2013 inductee into the Fixed Income Analysts Society Hall of Fame. He is a member of the Council on Foreign Relations and a trustee of the New-York Historical Society.
He and his wife live in Brooklyn. They are the parents of four grown children.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Qui ita affectus, beatum esse numquam probabis; Positum est a nostris in iis esse rebus, quae secundum naturam essent, non dolere; Duo Reges: constructio interrete. Quae diligentissime contra Aristonem dicuntur a Chryippo. Honesta oratio, Socratica, Platonis etiam. Si stante, hoc natura videlicet vult, salvam esse se, quod concedimus; Ne in odium veniam, si amicum destitero tueri. At Zeno eum non beatum modo, sed etiam divitem dicere ausus est.
Quae hic rei publicae vulnera inponebat, eadem ille sanabat. Obsecro, inquit, Torquate, haec dicit Epicurus? Quae cum essent dicta, discessimus. Eadem nunc mea adversum te oratio est. At ille non pertimuit saneque fidenter: Istis quidem ipsis verbis, inquit; Ille enim occurrentia nescio quae comminiscebatur; Nam si beatus umquam fuisset, beatam vitam usque ad illum a Cyro extructum rogum pertulisset. Quasi vero, inquit, perpetua oratio rhetorum solum, non etiam philosophorum sit. Quae tamen a te agetur non melior, quam illae sunt, quas interdum optines. Et ais, si una littera commota sit, fore tota ut labet disciplina.
Fortitudinis quaedam praecepta sunt ac paene leges, quae effeminari virum vetant in dolore. Itaque contra est, ac dicitis; Ut in geometria, prima si dederis, danda sunt omnia. Ita ne hoc quidem modo paria peccata sunt. Multa sunt dicta ab antiquis de contemnendis ac despiciendis rebus humanis;
Quodsi ipsam honestatem undique pertectam atque absolutam. Ergo id est convenienter naturae vivere, a natura discedere. An haec ab eo non dicuntur? Apud imperitos tum illa dicta sunt, aliquid etiam coronae datum; Eaedem res maneant alio modo. Non igitur de improbo, sed de callido improbo quaerimus, qualis Q.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Mihi, inquam, qui te id ipsum rogavi? Sed id ne cogitari quidem potest quale sit, ut non repugnet ipsum sibi. Velut ego nunc moveor. Duo Reges: constructio interrete. Sed tamen enitar et, si minus multa mihi occurrent, non fugiam ista popularia. Quia dolori non voluptas contraria est, sed doloris privatio. Aut unde est hoc contritum vetustate proverbium: quicum in tenebris? Qui bonum omne in virtute ponit, is potest dicere perfici beatam vitam perfectione virtutis; Quamquam id quidem, infinitum est in hac urbe;
Hic quoque suus est de summoque bono dissentiens dici vere Peripateticus non potest. Quantum Aristoxeni ingenium consumptum videmus in musicis? Praeclarae mortes sunt imperatoriae; Videmusne ut pueri ne verberibus quidem a contemplandis rebus perquirendisque deterreantur? Dolere malum est: in crucem qui agitur, beatus esse non potest. Tu vero, inquam, ducas licet, si sequetur; Quae duo sunt, unum facit. Aliter enim nosmet ipsos nosse non possumus. Certe, nisi voluptatem tanti aestimaretis.
Nam aliquando posse recte fieri dicunt nulla expectata nec quaesita voluptate. Omnia contraria, quos etiam insanos esse vultis. Quod ea non occurrentia fingunt, vincunt Aristonem; His similes sunt omnes, qui virtuti student levantur vitiis, levantur erroribus, nisi forte censes Ti. Comprehensum, quod cognitum non habet? Et ille ridens: Video, inquit, quid agas; Intrandum est igitur in rerum naturam et penitus quid ea postulet pervidendum; Nemo igitur esse beatus potest. Quorum altera prosunt, nocent altera. Dat enim id nobis solitudo, quod si qui deus diceret, numquam putarem me in Academia tamquam philosophum disputaturum.
Bonum integritas corporis: misera debilitas. Longum est enim ad omnia respondere, quae a te dicta sunt. Unum est sine dolore esse, alterum cum voluptate. Nunc omni virtuti vitium contrario nomine opponitur. Beatus autem esse in maximarum rerum timore nemo potest. Sed in rebus apertissimis nimium longi sumus. Haec quo modo conveniant, non sane intellego. Si quicquam extra virtutem habeatur in bonis. Ita redarguitur ipse a sese, convincunturque scripta eius probitate ipsius ac moribus. Traditur, inquit, ab Epicuro ratio neglegendi doloris.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Haec mihi videtur delicatior, ut ita dicam, molliorque ratio, quam virtutis vis gravitasque postulat. At ego quem huic anteponam non audeo dicere; Cupit enim dícere nihil posse ad beatam vitam deesse sapienti. Quod autem principium officii quaerunt, melius quam Pyrrho; Ita ceterorum sententiis semotis relinquitur non mihi cum Torquato, sed virtuti cum voluptate certatio. Ut optime, secundum naturam affectum esse possit. Duo Reges: constructio interrete. Iam id ipsum absurdum, maximum malum neglegi. Nihilne te delectat umquam -video, quicum loquar-, te igitur, Torquate, ipsum per se nihil delectat?
Egone quaeris, inquit, quid sentiam? Quamvis enim depravatae non sint, pravae tamen esse possunt. Quod cum ille dixisset et satis disputatum videretur, in oppidum ad Pomponium perreximus omnes. Quodsi ipsam honestatem undique pertectam atque absolutam. Simul atque natum animal est, gaudet voluptate et eam appetit ut bonum, aspernatur dolorem ut malum. Ita prorsus, inquam; Videamus animi partes, quarum est conspectus illustrior;
Et non ex maxima parte de tota iudicabis? Nam si propter voluptatem, quae est ista laus, quae possit e macello peti? Nunc omni virtuti vitium contrario nomine opponitur. Sin te auctoritas commovebat, nobisne omnibus et Platoni ipsi nescio quem illum anteponebas? Sed quia studebat laudi et dignitati, multum in virtute processerat. Piso, familiaris noster, et alia multa et hoc loco Stoicos irridebat: Quid enim? Non igitur de improbo, sed de callido improbo quaerimus, qualis Q. Ita fit cum gravior, tum etiam splendidior oratio.
Sic, et quidem diligentius saepiusque ista loquemur inter nos agemusque communiter. Si enim ita est, vide ne facinus facias, cum mori suadeas. Beatus autem esse in maximarum rerum timore nemo potest. Idem etiam dolorem saepe perpetiuntur, ne, si id non faciant, incidant in maiorem. Ut optime, secundum naturam affectum esse possit.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nos autem non solum beatae vitae istam esse oblectationem videmus, sed etiam levamentum miseriarum. An tu me de L. Nummus in Croesi divitiis obscuratur, pars est tamen divitiarum. Haec mihi videtur delicatior, ut ita dicam, molliorque ratio, quam virtutis vis gravitasque postulat. Hoc est non dividere, sed frangere. Sed haec ab Antiocho, familiari nostro, dicuntur multo melius et fortius, quam a Stasea dicebantur. Duo Reges: constructio interrete. Et ais, si una littera commota sit, fore tota ut labet disciplina.
Tantum dico, magis fuisse vestrum agere Epicuri diem natalem, quam illius testamento cavere ut ageretur. Ratio quidem vestra sic cogit. An ea, quae per vinitorem antea consequebatur, per se ipsa curabit? Quae in controversiam veniunt, de iis, si placet, disseramus. Si qua in iis corrigere voluit, deteriora fecit. Nullum inveniri verbum potest quod magis idem declaret Latine, quod Graece, quam declarat voluptas.
Quid affers, cur Thorius, cur Caius Postumius, cur omnium horum magister, Orata, non iucundissime vixerit? Quae quidem sapientes sequuntur duce natura tamquam videntes; Tu autem negas fortem esse quemquam posse, qui dolorem malum putet. Multoque hoc melius nos veriusque quam Stoici. Mihi, inquam, qui te id ipsum rogavi? Certe, nisi voluptatem tanti aestimaretis.
Deinde disputat, quod cuiusque generis animantium statui deceat extremum. Legimus tamen Diogenem, Antipatrum, Mnesarchum, Panaetium, multos alios in primisque familiarem nostrum Posidonium. Rhetorice igitur, inquam, nos mavis quam dialectice disputare? Expectoque quid ad id, quod quaerebam, respondeas. Si stante, hoc natura videlicet vult, salvam esse se, quod concedimus; Hic nihil fuit, quod quaereremus. Rapior illuc, revocat autem Antiochus, nec est praeterea, quem audiamus. Ita enim vivunt quidam, ut eorum vita refellatur oratio.
