Switzerland’s move to break the franc away from its set value against the euro is proof that when the constant “meddling” by central banks ends “something noisy and sudden happens,” Jim Grant, founder ofGrant’s Interest Rate Observer, told CNBC on Thursday.
“It is a day to take measure of our infatuation with central banking,” Grant said in an interview with “Closing Bell.”
Grant first made the call in September, writing that the Swiss would be forced to permit the franc to appreciate “and thus to enrich the holders of low-priced, three-year call options on the Swiss/euro exchange rate.”
“What today underscores is that they, the monetary mandarins, the powers that be, can attempt to suppress volatility. They can attempt to raise up certain asset values but they can’t do these things forever,” he said Thursday.
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