Jim Grant, who oversees the widely read “Grant’s Interest Rate Observer,” says the wild fluctuations in the global financial markets can be linked to one thing; record low interest rates.
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“I think the way to think about the present tumult is to consider that we have been in a kind of sedation over these many years, owing to zero interest rates, the expectation of continued zero interest rates and all of this Federal Reserve activity buying bonds,” Grant said during an appearance on FOX Business Network’s The Intelligence Report with Trish Regan.
Due to the extreme volatility in the markets, many investors seek safe havens such as gold.Today, Grant has a less-than-optimistic view on the precious metal.
“[Gold has] been a huge disappointment to its fans, including me,” he said. “It was in 2008 as well, when markets tanked people sold something to raise cash, and that something included gold. Gold is meant to be a port in the storm. It is now kind of a storm in a port. The question to me is ‘how does this end?’”
Grant predicts more central banks will attempt to sway the global markets.
“It seems to me that what happens next and next and next is more and more heavy-handed intervention by the central banks.”