Saturday, April 3, 2010

Does Jim Grant Really Predict an Interest Rate Rise Here?

He Does?

In this March 31st 2010 Youtube interview below, Mr Jim Grant, a famous financial author and originator of "Grant's Interest Rate Observer" for 28 years and author of 5, [and counting] books on the economy, markets etc., and consequently a well respected figure in the financial and investment community, appears to say that interest rates will rise soon [the implication being that inflation is due for a return] , at least according to the videos' Youtube headline. [The full headline reads:" James Grant Says U.S. Treasury Yields `Likely' to Rise: Video"]

He Does Not

However, if you listen closely to the end of the interview, it is apparent that in fact he does not claim to be a predictor of interest rate movements, at least, not any more.

Perhaps, after all of this time, Mr Grant has learnt a small measure of humility regarding the mysteriousness and inherent unknowability of the future movements of all markets?

His admission here makes a point I have repeatedly made in this blog : nobody can consistently, reliably predict the future state of the economy.

Use Money you Can Afford To Lose For Speculations on Interest Rates etc.

If you wish to make predictions and place bets on interest rate changes [or changes in anything else] do so with money you can afford to lose [if you are lucky enough to have some!] not with precious long-term savings that you cannot afford to lose, which must be saved in such a way as to protect against a broad range of economic scenarios, without a need to second-guess or predict any possible future market movements and thereby have to execute buy or sell orders.

Such a long term savings plan is possible.

For more on this, please review my article "Financial Safety Rule #1"

Regards, onebornfree.

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