James Grant, one of the most perceptive financial writers and publisher of Interest Rate Observer, is the subject of a story on MiningWeb: Go Long Silver, Short Fed Arrogance. Grant has long been a critic of the Fed’s policy of debasement of the dollar and an advocate for the monetary properties of gold. Quoting the article, “’Once a central bank is found unworthy, then all best are off,’ said the sardonic Grant”. Grant also calls attention to the distortions in currency exchange markets that have been created by the dollar’s status as the world’s reserve asset and mercantilist policies of Asian governments.
Grant says the singular problem facing the world is the overextension of American finances. “If Britain was the world’s workshop, the US is the world’s mouth,” he quipped. “We consume more than we produce and the money winds up in the vaults of countries that consume less than they produce.”
As a result, dollars are piling up abroad with $1 trillion (a thousand billion dollars) recorded on foreign central bank balance sheets. China and other Asian countries have been accumulating dollars faster than anyone in an effort to prevent the dollar from depreciating to rapidly, so threatening their export led economies.
