Steve Hanke, a prominent economist and professor at Johns Hopkins University, recently made a bold prediction: that the shrinking money supply in the United States will lead to a recession and inflation of less than 2% by the end of the year.
Hanke, who is known for his expertise in monetary policy and exchange rates, argues that the Federal Reserve’s decision to tighten its monetary policy by raising interest rates and reducing its balance sheet has led to a decline in the money supply. This, in turn, he believes, will cause a slowdown in economic growth and an increase in unemployment.
According to Hanke, the reduction in the money supply will lead to a decrease in consumer spending and investment, leading to a contraction in the economy. He warns that this could result in a recession if the trend continues.
Furthermore, Hanke predicts that inflation will remain below 2% by the end of the year due to the slowing economy and reduced consumer demand. This is in sharp contrast to the Fed’s target of 2% inflation, which it has been struggling to reach in recent years.
Hanke’s views have sparked a debate among economists and policymakers, with some agreeing that the tightening monetary policy could lead to a recession, while others argue that the Fed’s actions are necessary to prevent runaway inflation.
Regardless of the outcome, it is clear that the shrinking money supply in the United States is having a significant impact on the economy. As we approach the end of the year, all eyes will be on the Fed to see how it responds to these challenges and whether Hanke’s predictions will come to fruition.
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Money Supply is not shrinking thouhg. Stop spreading lies that are easily verifyable….
He's talking about bonds from the perspective of a trader, not the coupon clipper.
If the government is increasing debt faster than FED is doing QT isn't that an increase in money supply? So why would inflation go down to 2% in this case?
He’s wrong. Deficit spending means we are still expanding the fiat currency supply.
The misery index is dog shit and useless lmao
Money supply is growing
I been in ressession since 89
Steve Hanke said bitciin is going to zero. Lol
The money supply contraction he is talking about is mainly QT taking out excess reserves, broad bank credit is still growing 2% YoY but is slowing down towards flat or negative in the coming months. Bank loans to businesses are already -3% YoY and that is normally associated with a recession.
1:01:17 – I like this dude.
I don't even know why…
I guess (if pressed) I would say he has a trustworthy face.
And, no, they don't handle any of my money – yet.
"WE" don't have any wars going on right now.
Ukraine and Israel DO.
Sounds like a THEM problem.
But I’m just a “dumb money American poor” who is not interested in fighting other country’s “wars” real or manufactured, so what do I know…
Doesn't Mr Hanke understand the actual real rate of inflation is actually 2 or 3 times the fed's doctored rate at any given time? I'll start worrying about deflation when the fed's doctored inflation rate goes -15%. Curious, does anyone in the world actually think this will ever happen?
Great interview of steve by Professor Taggart here!
Rigged inflation indicator method. BS
'Recession And Sub-2% Inflation', so we're going for the early 90's recession.
Hello! Is the market up because money is up, and Russia is now not a drag on world GDP? Regards
Hello! How does the premise that National Debt is owed to Americans, and not owed by Americans? Regards
But isn't the money supply still inflating?
Consider DCAing instead of a lump sum purchase. Consult a crypto expert for informed decisions. Time in the market is crucial. Following this, my pòrtfolio grew to 700k.
I love Prof Hemke but the CRB says inflation is going higher.
Just looking at that M2 chart, there has NEVER been a decline of that magnitude. Granted the move up is also unprecedented, but still.