A few weeks ago, Jeremy Grantham
), the co-founder of money management firm GMO, called
newly appointed Federal Reserve chairman Janet Yellen "ignorant" in the New York Times.
He also said the reason for the slow recovery was not the severe financial crisis, continued high unemployment, or the many standoffs in Washington. Instead, he blamed the Fed for ruining the recovery it was supposed to stimulate. To someone who believes in the laws of economics, it's hard to overstate how odd that claim is. It's positively bonkers.
Low interest rates stimulate the economy. The Fed has done everything in its power to keep interest rates down, lower and longer than anyone can remember. That should have helped the economy. And yet the recovery has been just meh. So, either Grantham is bonkers, or he is onto something. Fortune
recently caught up with him to find out. Continue Reading »