James Grant: “Bull Cases Are Always Hypothetical. Bear Cases, Self-Evident.” (Video)

The US Congress may have averted default with its October agreement to extend the debt ceiling until early February, but the possibility remains that the conflict will be repeated the next time the United States reaches its borrowing limit. According to James Grant, founder and editor of Grant’s Interest Rate Observer, a US default is not only possible, but also something that the United States has done before.

In his presentation at the 2013 Fixed-Income Management Conference in Boston, Grant built on his op-ed piece from the Washington Post, citing past US actions that devalued the dollar and effectively reduced the amount repaid to creditors while avoiding technical default.

In the video above, recorded at the conference, Grant offers an economic history of the world, discusses the odds of a new financial crisis, and explains how he is bullish on the Commonwealth of Puerto Rico as a form of speculation, even as he warns that “this ain’t no investment.”

Grant is the author of seven books, and his new history of the self-healing depression of 1920–1921 will be published next year by Simon & Schuster.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.