We Need Capitalism, Not Market Manipulation

Posted by - Friday, March 9th, 2012

James Grant, founder of Grant's Financial Publishing and Ron Paul's ideal Fed Chairman, believes our economy is scarcely one based on capitalistic ideas any more...

"Capitalism is an alternative to what we have now," Grant told CNBC's Maria Bartiromo.

The Fed has announced plans to “bolster the economy” via a new bond buying program.

Mr. Grant thinks this approach is a foolish one. Rather than agreeing that this plan has any sustainable solutions at the end of the tunnel, he suggests that this is merely another form of market manipulation.

According to Grant, the Fed is “manhandling” the way interest rates work which will result in some ideal macro outcomes, but it won't be able to solve any of our nation's debt problems. Manipulating currency values is in no way an ideal way to reform any struggling economy.

By manipulating the currency, the Fed is also manipulating peoples' perception of risk. The combination is creating an inflation crisis, especially for soon-to-be retirees. Workers who thought they had enough money saved-up to retire comfortably will soon find out that those savings simply aren't worth as much as the savers expected.

Ultimately, the Fed's new bond buying program would be very detrimental to savers.

James Grant says we're facing an extremely dangerous situation as the Fed contines to interpose itself, recklessly printing money, and distorting what's really going on with the American economy. Simply put, this couldn't be further away from the ways in which a thriving capitalistic country should behave.

The consequences are too dire to ignore any longer...

Take a closer look to find out why Mr. Grant is calling for the Treasury to issue bonds backed on a sound currency like gold as opposed to the extremely volatile U.S. dollar.

The entire interview is definitely worth a watch:

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