Central banks have been so focused on force-feeding financial markets with cash that they've overlooked a brewing inflation crisis, said Jim Grant, editor of Grant's Interest Rate Observer, on Wednesday.
Amid a global credit crunch, liquidity has reached buzz word status in financial markets and among monetary policy officials, so that the implications of adding so much money to the system has been largely ignored.
"The word liquidity is a phony word that sounds sophisticated," Grant told the Reuters Investment 2008 Outlook Summit. "It clearly means money, money that is being materialized out of thin air through the actions of central banks.">>>MORE