zerohedge.com / by Tyler Durden on 12/20/2013 17:39 -0500
From the United States to Europe and Asia: The world’s central banks are flooding markets with liquidity and pushing deeper into unknown monetary policy territory. Jim Grant tells Germany’s Finanz und Wirtschaft that he “fears that this journey will not end well.” The sharply thinking Wall Street veteran doesn’t trust the theoretical models of the central banks and warns of irrational exuberance in the financial markets adding that “the stock market is increasingly full of stocks that are borne aloft by hope rather than demonstrated performance.”
Mr. Grant, half a decade after the financial crisis hope is rising that the United States finally are on a sustainable path to economic recovery. How are chances that the US economy gets back soon its status as the growth engine of the world?
In the past, the United States has been very resilient even in the face of very unfavorable and even punitive policy measures. The United States seem to want to be prosperous despite of what’s happening in Washington. Therefore, one can never rule out a great unscripted outburst of prosperity. I hope for that to happen, but I don’t predict it. Also, I’m coming increasingly to wonder about the concept of an economy as an integrated whole. People who talk that way don’t appreciate the incredible complexity of individual choices and decisions.Until fairly recently, no one thought about what we now call the economy as anything organic and macro in whole. This wasn’t a concept that entered our collective thinking until the nineteen forties. If you go back and read what economists wrote and what newspapers reported in the early portion of the twentieth century, you see that they would talk about prosperity or depression. But they wouldn’t talk about the economy. They just didn’t see it that way.