James Grant, publisher of Grant’s Interest Rate Observer, appeared on CNBC today and commented on Federal Reserve policy and his outlook for interest rates and inflation. I found the following quote to be particularly interesting. I highly recommend viewing the video below or, for those reading this via the RSS Feed, click on this link to view the video on CNBC’s site.
“If the Fed examiners were set upon the Fed’s own documents—unlabeled documents—to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down,” he said. “The Fed is undercapitalized in a way that Citicorp is undercapitalized.”