Jim Grant Interviewed on Bloomberg TV Discusses the ECB the EU Mess

Jim Grant was interviewed on Bloomberg TV yesterday, Nov the 11th. Unfortunately, the video on Bloomberg.com is broken. Luckily, the video is also available on YouTube, but embedding is disabled.

ZeroHedge has done a good job at summarizing the interview:
On the three thread by which the world currently hangs:
i) by the financial probity of Italy
ii) by the determination of Greece to implement austerity measures
iii) and by the responsibility of our money spinning central bankers
"These are very slender threads indeed."
On what the ECB will do:
The ECB has expanded its balance sheet mightily under Trichet. We have a new leader and we have a new imperative. I dare say Europe is going to print money.
On central bank monetization and its implications:
The Italian yields did not fall on their own. It raises questions of overall integrity of market prices. In the US the Fed has nationalized the yield curve. In Europe much the same is going on: the SNB is expanding its balance sheet at astonishing rates of speed. The world over there is seeing immense money printing and there is a huge race to debase on the behalf of the sponsors of paper money.
Central banks are insolvent:
The ECB has a ratio of non-AAA rated assets to equity of 14 to 1. What the ECB has been doing is stepping in where private money fears to tread. In the private sector we call the heading for trouble... The New York Fed is leveraged 100 to one.
And the kicker analogy which is absolutely spot on:
The ECB is now implementing the MF Global trade.
He also discusses:
  • Immense money printing by the Swiss National Bank (SNB)
  • The farmland price bubble in the US: everybody is chasing it, the income yield of about 2.5%, which is at the lowest of the past 40-50 years. In the late 80s, at the bottom, they were yielding 7-8% and trading for about 10% of the current value.
I would add that once must be mad to buy farmland which is such an illiquid asset and which will be prone to all the government manipulation and extortion as soon as the second leg of the Greater Depression settles in, with confiscations, price fixings etc.

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