Crazier Monetary Policy Coming

Jim Grant appeared on CNBC’s Closing Bell and unhesitatingly said he thinks the US economy has already gone into recession:

I think we are in one…I think there’s a defensible case to be made that a recession began late last year.”

In early January, Grant joined Peter in predicting the Fed would have to backtrack on its December rate hike.

It seems to me that the Fed is more likely to go to zero than to go to one-half of one percent from here. I think the Fed felt that through a combination of institutional self-regard and as it read the data, it felt it had to move. It had been saying for so long it would, [therefore] it had to, [and] it did. That doesn’t mean it was right to do so in the Fed’s own scheme of things. I think the Fed will regret the move it did in December.”

In yesterday’s CNBC interview, Grant took things a step further, saying central banks may well go beyond negative rates and quantitative easing into even crazier monetary policy like “direct monetary funding.”

Radical monetary policy begets more radical monetary policy. I think that’s what the markets are afraid of.”

Reprinted from SchiffGold.com.

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