Edward Chancellor

And now with the shot clock back on and a sense of urgency injected to the economy, I think more and more people will likely have time preferences that don't match the investment time horizon of some of the more speculative investments that are out there.

So in his book, The Price of Time, it's called The Real Story of Interest by Edward Chancellor.

He shows how unprecedented and unnatural the past 10 years have been with interest rates near zero and even negative.

So in the 5000 years in which there are records of interest rates, it wasn't until the 20th century that rates touched zero.

Yes, yes.

We also interviewed a historian, Edward Chancellor, who wrote a book about interest rates a few years ago.

And he was definitely calling those changes.

And that brings me a bit to... how you address that specifically, because it's not just a macroeconomic bet where you say, okay, I can forecast, I can see that this film will change tomorrow, right? Can you tell us the big picture of how you approach your strategy?

I have really good friends at Hosking Partners.

Ed Chancellor wrote the Capital Cycle book.

But never forget, I have it written on my desk between my screens.

Obviously, it's very germane to what I do.

What creates them, how they develop, and what happens when they pop.

Edward Chancellor is a financial historian, the author of several books on finance, including most recently, The Price of Time, A History of Interest, and last but definitely not least, a regular contributor to Reuters Breaking Views.

And he joins me here in the studio in London.

Eddie Chancellor, welcome to The Big View.

There is not one syllable in that book about negative interest rates.

Here is Ed Chancellor's Price of Time.

He talks about interest rates going back 2,000 years.

There's not one syllable about negative interest rates.

The elevated demand for these assets pushes up prices, and this increases the net worth of everyone exposed to these asset classes, which again, is primarily those in the upper class.

The greatest beneficiaries from the Fed's policies of the 21st century, writes Edward Chancellor, were the financial elite, who got to enhance their fortunes with cheap leverage at a time when asset values were driven higher by easy money.

As one commentator put it, the top 1% of income-earning households that are most exposed to the market economy are dramatically outperforming the remaining 99% that are exposed to the real economy.

In addition to allowing politicians, bureaucrats, and the upper class to leech wealth from the rest of us, there is a further reason why a monetary inflation is economically destructive.

Um, and unfortunately, some of the things that I'm interested in reading are pretty boring, um, to, to most.

But, you know, I mean, like, you know, Edward Chancellor's The Price of Time is, is a great way of diving into macro analysis and appreciating what interest rates are and how important they are to every asset class, whether it's gold, whether it's stocks and bonds, um, you know, fiscal, uh, the fiscal position of any, any given country.

That is, that is, I think, a, a, an important read and, and written in a very accessible way.

Um, I, I think as people think about the w- the role that gold has in a portfolio, um, it would be helpful them to, for them to figure out what they want in liquidity.