“We don’t know what we’re doing.”
According to investor and bestselling author Jim Rickards, that’s what one Fed governor told him recently at a small private dinner. This Fed official continued:
“We try stuff. If it works, we do a little more. If it doesn’t work, we back off and we try something else.”
Well there you have it!
It’s a pervasive feeling among central bankers, Rickards says. He recalls another private conversation he had, this time with former Fed head Ben Bernanke. “He described everything he did as ‘an experiment’ and said, ‘We won’t know whether it worked or not for another 30 years.’”
In the video clip above, taken from a broader interview with Hedgeye CEO Keith McCullough, Rickards describes the hubris of central bankers tinkering with their economies. “The problem with all this activism is that it creates uncertainty, and the capital goes on strike,” he says. “That’s the situation you’re in today.”
Rickards has worked on Wall Street for the past 35 years, including as general counsel for hedge fund Long-Term Capital Management. Rickards is also the best-selling author of the book “The Road to Ruin.” He is currently an economic adviser to the Department of Defense and U.S. intelligence community. He brings all of this past experience to bear in his interview with McCullough.
In a world awash in central bank liquidity with equity markets pinned up on the whims of central bankers, this is must-see TV.
WANT MORE?
Click here to watch the Rickards interview in its entirety.
