Economist Steve Hanke Warns: 'A Recession Is Baked in the Cake!'

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In this episode, James Connor of Bloor Street Capital (‪@BloorStreetCapital‬) sits down with Steve Hanke, Professor of Applied Economics at Johns Hopkins University (‪@JohnsHopkins‬) to dive into crucial economic trends for 2024. They discuss the dynamics of inflation, the impact of money supply fluctuations, and the potential risks of economic recession. Hanke offers a detailed analysis of the current financial environment, explains why he thinks a 'recession is baked in the cake' and provides insight to help you navigate the economic landscape of the coming year.
Timestamps:
02:42 - Overview of Money Supply & Quantity Theory of Money
09:08 - Economic Growth & Inflation
10:37 - Asset Prices and Economic Indicators
12:45 - Historical Contractions in Money Supply
16:19 - Predictions for Future Economic Trends
22:29 - Labor Market Analysis
27:45 - Financial Markets and Money Supply
31:41 - Fed's Role and Predictions
35:56 - Strategies for Wealth Protection
39:45 - Global Economic Insights: Argentina's Case
43:33 - Closing Remarks and Contact Information
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[@kissmy_butt1302]

We are in it. Layoffs started in the fall. All of the job hires in Q4 were government jobs. The unemployment rate should have jumped almost half a point in in Q4 alone. Companies ACROSS the whole spectrum are announcing big cuts in the last few weeks. Google and the Post Office just announced 30,000 jobs alone. It is SHOW TIME.

[@erinsweet8147]

There was a Bloomberg article that was about how the jobs numbers might be double counting listings because companies are advertising the same job in multiple cities. All the numbers are bogus.

[@mattanderson6672]

Brilliant interview with Hanke!! Thanks guys!

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the comment and for taking the time to view our content! Agreed, Hanke is one of the best!

[@TB-ki1ux]

Great guest and conversation, thank you both

[@BloorStreetCapital]

Thanks for the positive comment and for joining us this morning! Wish we got more comments like this.

[@BloorStreetCapital]

Hey guys it's Jimmy Connor, thanks for joining us today! If you would like to see other guests on the channel please let us know who in the comments below.

[@freedom4all581]

Why do you not discuss how Fiat Dollars are your enslavement???

[@BloorStreetCapital]

@@freedom4all581 oh yeh and also inflation and taxes, we'd be talking for hours!

[@gopower6133]

Enjoyed this interview a lot. Keep up the good work.

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the positive comment and for taking the time to view our content!

[@shakazulu3594]

Great interview! Thanks ever so!

[@jetflyresq]

Just what I need to help me snooze on a cold rainy afternoon

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the comment and for taking the time to view our content! I hope you had a good nap.

[@henrycrews9344]

How is money supply going down when we are deficit spending almost 2 trillion? Suggest looking at M3.

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the comment and for taking the time to view our content! That's a great question and I will ask Steve during our next convo.

[@ivancho5854]

Great interview with a wize old owl. I really like Steve Hanke and respect his logic. Thank you for bringing him on. 👍

[@BloorStreetCapital]

Thanks for the comment Ivan and for joining us this morning! Yes Steve is great!

[@philhadi172]

Excellent interview very useful macro info

[@BloorStreetCapital]

Thanks for the comment Phil and for taking the time to view our content!

[@joeysocks5718]

Good information!

[@BloorStreetCapital]

Thanks for the comment Joey and thanks for joining us this morning!

[@ashanesubasinha8313]

Good interview

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the comment and for taking the time to view our content!

[@Michaeldotcom33]

How does the federal spending impact money supply growth. Although the Fed has been tighter the government keeps spending. Curious how Hanke views how government spending impacts the money growth rate.

[@BloorStreetCapital]

Thanks for the comment and for joining us this morning! That is a great question and so relevant right now given how much the governments are spending. I will bring this up the next time.

[@issenvan1050]

Will DXY go down during the next recession b/c of the fiscal response?

[@rob3bbb]

When was this recorded? Can't tell the turth on something as simple as weather. All day Monday in Toronto was Sunny and above average temperature. Time to get my info from other channels, that can at least stick to the turth.

[@BloorStreetCapital]

Thanks for the comment/question Robert! It was recorded 24 hours ago. Not sure what part of To you're in but I haven't seen the sun in weeks. Almost as bad as Vancouver.

[@bruceposch1449]

I thought the interview was "turth". @@BloorStreetCapital I always appreciate getting to listen to Steve Hanke.

[@issenvan1050]

When will his goldsentimentindex’s i-phone app become available?

[@martinithechobit]

Let's go!.

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the comment Martin and for taking the time to view our content!

[@DIVISIONINCISION]

What happened to Adam Taggart?

[@BloorStreetCapital]

It's Jimmy Connor, thanks for taking the time to view our content! Sorry, not sure who you are referring to.

[@DJ-fk6zi]

Michael Howell says "liquidity" is continueing to fuel the economy, so it would be interesting to see what he thinks about that. Also, while money supply is contracting, it grew so much in the pandemic there seems to be room for it to do so without going back to where it was in 2020, because the excess is being drawn out, which is different than previous times which were not preceded by such an absurd expansion, i wonder what he thinks about that, so far its not even down to where what would be an average level of annual growth over the past 4 years. I am also critical of underlying supply chain labor and energy costs would not contribute to inflation

[@SergiomoisesVazquezperez]

Xeventy's innovative approach to AI and investments got me hooked

[@louisgiokas2206]

Well, one has been coming for years now.

[@issenvan1050]

Timestamps would be helpful.

[@issenvan1050]

What is a variable lag?

[@baibamennika8625]

You say that harm comes from commercial banks. Please explain, how private banks can in reality contribute to money flaws? Money printing belongs to the central bank and lones are too expensive to take right now?

[@BloorStreetCapital]

Thanks for the comment and for joining us this morning! Yes only the Fed can print but private banks get their money from the Fed and from depositors.

[@baibamennika8625]

@@BloorStreetCapital Then you should stop that)) Those who care))

[@JAVEDKHAN-vb7bu]

Recession baby !!

[@autonestegg4195]

You both forgot to mention his gold Trading indicator

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the comment and for taking the time to view our content! Yes you are correct, I will bring it up during our next conversation.

[@issenvan1050]

Isn’t M2 still above-trend? Why should we have a recession?

[@issenvan1050]

Can there be positive CPI & a recession together?

[@galanoth17]

Ya it's called stagflation

[@ellaschris]

What interest rates go down so does the dollar

[@BloorStreetCapital]

Thanks for the comment Chris and thanks for joining us this morning!

[@ivancho5854]

No. Hanke said that the stock market was overvalued according to the PE Ratio AND that earnings are going down. He said that "the stock market is in for a spill." When the Fed pivots they won't do it early, they will do it in response to something, like a "spill". It smells VERY like 1929 to me and has for a couple years now. (I'm not often premature, but I was this time. 🤣 Rather early though than being a second late if it's going to be as bad as I suspect.) I think that we're in for something about 1½ times the GFC. Anyway back to your point: When crashes happen there's a flight to the US$, but more significantly the global economy excluding the US is absolutely currently in recession and as a result defaults on loans will destroy Eurodollars and that market is huge in comparison to domestic Dollars. What happens to the price of anything when quantity declines and demand remains constant? The price goes up. I think that the US$ will rise tremendously when the Fed lowers rates, because they will be reacting to a huge stock market crash. Hence I say buy long denominated US Treasuries, but what do I know. 😉 All the best Chris. 👍

[@issenvan1050]

How can anything w/ no fundamental value be considered an asset?

[@baibamennika8625]

And Mercury versus Uranium make me think that mercury potential has not been used as it should

[@issenvan1050]

Is BTC an asset?

[@baibamennika8625]

I kind of don't see the proof with examples from real life supporting what he is saying

[@issenvan1050]

So, economy is all about money but nothing else?

[@Plumology]

I appreciate Hanke’s expertise and communication skills, but there are a lot of assumptions underlying his approach that he doesn’t acknowledge. His model is an equilibrium model that assumes adiabatic (slow) changes in a closed system. I would not expect that to work in an open economy, with large international monetary flows that is under high monetary and fiscal impulse. I wonder if the predictive power of the Hanke approach is an illusion, caused by error cancellation.

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the detailed comment and for taking the time to view our content! I will bring this up in our next discussion.

[@tangobayus]

Recessions are caused by reductions in the supply of money. That is not happening. How long have "they" been warning us about an imminent recession? 2 years?

[@nickelstacking2023]

we are in a recession for two years now

[@kth6736]

This guy is a complete idiot. Last year he tried to pump gold. 😂😂

[@BloorStreetCapital]

Thanks for the comment and thanks for joining us this morning!

[@BloorStreetCapital]

Thanks for the comment and thanks for joining us this morning!

[@gustavis85]

Actually Money supply has been shrinking significantly

[@mattg8431]

Bulls will say hard landing already priced in😂

[@BloorStreetCapital]

Thanks for the comment Matt and for taking the time to view our content!

[@DexterHaven]

Remind him that M2 growth is still above trend since 2018. Who cares if it dips short term after a moonshot. He's a one-note Nancy.

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the comment and for taking the time to view our content! I love that line 'One-Note-Nancy' I'm going to use it going forward.

[@free-qe6wx]

@31:27 This whole answer here: Yeah, that's what pretty much everyone has been saying since January 2022 that would happen by the end of 2022, and all those people have been 100% completely wrong. Then it was by Spring 2023. Then it was by Summer 2023, and so on. This is not a question of were you just early on the prediction. No, you were just wrong. What you thought was happening is simply not what was happening. A different process or phenomena took place that you did not understand. This is not to say that a recession months or years from now has been avoided. It is simply to say that if we get a recession, you in no educated way predicted it.

[@freedom4all581]

The money supply has been all over the place yet nothing has changed. Not true about money supply as our Federal reserve is decreasing while the US is borrowing more and more into existence.

[@michaelfelli7661]

@free-qe6wx BTFP, Reverse Repo, TGA. Any of these ring a bell? As long as the govt pulls sh1t out their arse, the recession/implosion will be delayed.

[@VK-vc2zz]

You guys have been predicting a recession for the longest time and been wrong again and again. Even a broken clock is correct once in a while.

[@BloorStreetCapital]

It's Jimmy Connor, thanks for the comment and for taking the time to view our content! Yes you are correct, many people have been calling for a recession and they have been wrong but at the end of the day, no one knows.