Jeremy Grantham Blasts The Fed

I’ve made no secret that I despise how Federal Reserve policy has over-reached its proper boundaries.

The Greenspan put, bank bailouts, and quantitative easing are just a few examples of the ever-growing influence of the Fed. The result is market manipulation, inflated asset values, mis-allocation of resources, rotating bubbles followed by vicious collapses, increasingly excessive government debt and an unknown risk of inflation and/or currency depreciation down the road.

Good stuff, eh? Thanks a lot, Alan and Ben!

And we wonder why Americans feel less economically secure now than they did in the good ol’ days… Maybe it’s because we are!

It is one thing to understand the negative long-term implications of our current government insanity, but it is another issue entirely to teach it with clarity in language most people can understand. That is where Jeremy Grantham from GMO enters the picture. He writes an always insightful quarterly letter that is must reading for financial junkies like me, and the October 2010 issue Night of The Living Fed provided a superb explanation of all the problems with Fed policy that should be required reading for anyone who votes or owns a savings account.

It’s a relatively long read by internet standards at 16 pages, but if you set aside the few minutes necessary you will be treated to insights from one of the great investment minds of our time explaining why recent Fed policy is so horribly misguided and how it is at the root of many (most) of the serious economic problems we face today.

Yes, it is all the Fed’s fault… That is how serious this issue is.

I hope you enjoy this resource, and please share your thoughts in the comments section below. I would love to get some discussion on this topic going…