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    Jim Grant: Expect Adverse Consequences to Markets & U.S. Economy

    The markets and economy of the United States seems to be in a more unstable position than ever. 

    The markets and economy of the United States seems to be in a more unstable position than ever.  Many are worryingly, yet rightly asking: What’s next?


    One of the most accurate assessors of the markets and economy, financial historian, and famed publisher of Grant’s Interest Rate Observer, Jim Grant is painting a bleak picture.

    After the Federal Reserve attempted to rescue the United States’ economy with a ‘Get-Out-of-Jail-Free’ card — the chickens may be coming home to roost.

    Because of all of the interest rates manipulations over the years, dire circumstances could be ahead if one is not appropriately paying attention and staying informed.

    “To the extent that we have lived through a ten-year demonstration of the futility of price control, we ought to expect some adverse consequences,” said Grant, on the Interest Rate Observer podcast.

    Macro Strategist and President of Bianco Research, Jim Bianco agreed with Grant’s assessment of the upcoming adverse consequences.  The Fed is certainly a culprit.

    “They have been, through the expansion of their balance sheet, purchasing securities, depressing interest rates and forcing everybody out the risk curve under the guise of Milton Friedman’s portfolio balance channel,” said Bianco.

    …And now, what are those adverse consequences going to be?

    “The reversal of that is going to produce volatility — which we’ve seen — and a correction much greater than we would’ve had otherwise.

    “That turbulence is going to be exasperated because the balance sheets of the Federal Reserve have manipulated markets much higher than they would’ve been otherwise,” Bianco stated on the podcast.

    And according to Bianco, who provides some of the most objective research and unique insights into the financial markets: “Something significant has happened to markets in last two months.”

    What could that be? And how would this imperative information be of service to the everyday American who is already struggling to get by?