Real Conversations | What's Next? An Intelligent Conversation About Markets & Economy w/ Steve Hanke

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Johns Hopkins Economics professor Steve Hanke joins Hedgeye CEO Keith McCullough live on Tuesday, March 5th at 11:00am ET. Their conversation will cover a lot of ground with an emphasis on Fed monetary policy, inflation, whether a recession is still in the cards, and probable outcomes for the U.S. economy and markets in the year ahead.
As Professor Hanke says, "95% of what you read in the press is either WRONG or IRRELEVANT." Join us for a transparent conversation on the state of the markets and economy.
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[@sheevamatimbas4300]

Thank you Keith, this podcast has been highly enlightening and educational with Prof. Hanke 😊

[@tylersampson5146]

Great to be with you Professor Hanke and Master McCullough!

[@markphillips2648]

Great interview, Just brilliant!

[@LibertarianRF]

1920 was also a horrible depression but the government cut spending and got completely out of the way and it was over in about a year

[@scottodonnell1723]

Really good interview, well done.

[@markvaughn2310]

One of my favorites! And I watch a lot of this stuff.

[@ivanchernenko9879]

Outstanding interview with great questions!

[@evgeniiastapov354]

Great interview. Thank you.

[@brianlangenberg3222]

This is so much better for the brain than anything in the usual financial media!

[@ZOE-ol8se]

what's happening w/ velocity in the equation?

[@mackakiwinz4353]

Love Hanke thanks guys thoroughly enjoyable and informative.

[@philhadi172]

Steve Hanke is a true economist

[@michaelstock9351]

Fabulous interview.

[@issenvan1050]

Why don’t you use timestamps?

[@profdoc8339]

Dr Hanke is a national treasure!

[@issenvan1050]

Inter-national…

[@l.a.mottern3106]

Professor Hanke is right--But there is an "Auxiliary Fuel Tank" out there even if the Fed tightens: Dollar capital flows from outside the US purchasing financial & real assets within the USA, and also those foreign deposits into US Bank & Nonbank entities. These are safe haven plays and may or may not continue based on the Confidence in the US government & it's private economy. Those inflows Must be considered when trying to figure actual "money supply" within the USA. Does that make sense?

[@issenvan1050]

What is the importance of the cost of capital/price of money, i.e., rates, for a monetarist?

[@GrantLeeEdwards]

You guys have been saying the same thing for the entire year I’ve been a subscriber. Decent info but if you can’t pivot, it’s because you’re more concerned about being right (reputation) than winning & protecting capital by GROWING it. Bear porn pays well enough, I take it. Subs are on their own, tho.

[@issenvan1050]

B/c of the inverted yield-curve for a long time already, a lot of companies have positioned themselves defensively. As such, can we dodge a recession?

[@Notaslave1961]

Hire Hanke to add to the confusion.

[@mr.q8023]

He should be in the white house

[@issenvan1050]

@@mr.q8023He was in Reagan’s time.

[@issenvan1050]

Does he include the commercial banks in the category of “the non-bank public?”

[@issenvan1050]

Should gold (miners) do well with a lower 10-yr. yield?

[@mr.q8023]

Henke is da man.

[@LibertarianRF]

We had a recession then they changed the definition of it and have been lying about all the numbers since. Literally every employment report has been revised downward some of them in a huge way

[@issenvan1050]

Is there anything between QT & QE?

[@issenvan1050]

Why was the GDP print at 2.5% today?

[@issenvan1050]

So, nominal GDP will be below -2%, then, later this year?

[@issenvan1050]

TIMESTAMPS plz. 🙏🏻

[@issenvan1050]

If money is irrelevant, why are they doing QT?

[@issenvan1050]

What happens to the reserve requirement now?

[@issenvan1050]

How would he respond to the Eurodollarists’ critisims to the monetarists?

[@lotfyken2759]

This is the professor who alone destroyed a bunch of bit ponz scam pumpers/holders, I like him !

[@issenvan1050]

How does he define a “recession?”

[@issenvan1050]

How would the shadow banking system or RRP affect the money supply?

[@issenvan1050]

What is a “variable” lag?

[@issenvan1050]

DeSantis was talking about Friedman & monetarism & lags…

[@issenvan1050]

Why would selling treasuries to the public squeeze the money supply? B/c yellen would use those funds for non-productive activities, like paying interest?

[@issenvan1050]

How about the banking crisis of the 1870s?

[@issenvan1050]

We had two consecutive quarters of negative GDP growth (a few years back). Wasn’t that a recession?

[@issenvan1050]

I wonder why there is a place called MILTON KEYNES in UK! 😂

[@issenvan1050]

Why does Ray Dalio call Friedman “naive?”

[@issenvan1050]

So, nothing in economy matters but the money supply?..

[@issenvan1050]

Do these amount to saying that $3 of stimulus/injection generates $1 of GDP/growth/CPI?

[@issenvan1050]

What is a “landing?”

[@pictureworksdenver]

Early = wrong.

[@issenvan1050]

🐐🧿

[@issenvan1050]

He used to say -4.5% YoY. Why -2% now?..

[@stevewardlaw]

Thought I would check in with Hedgeye after a 2-3 year hiatus to see if anything had changed. This egomaniac didn't make it through the FIRST question without interrupting the guest. Still interrupting experts and hovering at 10k views. See you in 2027, Keith.

[@JSDRR1992]

You act like the American people have a choice on who sits on the FED board. We don't even have a choice on who sits behind the resolute desk much less the FED.

[@danielhosking9456]

Would Biden $10k new home incentive considered fresh M2 money supply?

[@issenvan1050]

“Objective” is a loaded term. I’d be careful in using it.

[@issenvan1050]

Where does his notion of “confidence” fall in the monetarist equation he employs?

[@E_incognito]

Hanky panky was wrong about recession. What makes him correct this time?

[@rayhall7759]

You must be a weather man…….right

[@issenvan1050]

Wrong about its timing, not the recession. He had predicted 9% peak CPI 1.5 years in advance!

[@jacknaneek1681]

The ol professor-he may be crusty but at least he’s arrogant.

[@issenvan1050]

Arrogant…in admitting being wrong about his recession timing?

[@Weetorp]

How will RRP go to 0 in may when Q2 net bill issuance is negative?You are way off.

[@issenvan1050]

Explain.

[@BravoFourTactical]

A recession is baked into the market. 😂😂😂 The dumbest thing I have heard in months.

[@paulsommerhalder9049]

Not one stock recommendation. Please return to Canada😂

[@rorytrue2835]

He has an actual show where they go over company's

[@EMan-cu5zo]

Get Ross Gerber on this show. He is great with his models.

[@JamesG1126]

Academics are never right. That's why they're in academics. M2 +40% followed by -4% doesn't equal deflation. Hanke would make a good addition to Hedgeye and their Quad 4 nonsense.

[@jacquesreilly1850]

You're just jealous. Pipe down.

[@issenvan1050]

This academic had predicted 9% peak CPI 1.5 years in advance! His CPI projections have always been spot-on!

[@dbehr4869]

He has been very wrong on his deflation timing now it has gone to late 2024. Who knows? The truth is there are a lot of moving parts and he did not account for Gov spending

[@Notaslave1961]

Yes gov spending as in WAR.

[@issenvan1050]

When did he say deflation? Maybe in 2025. He had projected 9% peak CPI 1.5 years in advance! His EoY CPI projection for 2023 was accurate, too!

[@jcgoogle1808]

Hanke gives himself waaaay too much credit. His quantity theory of money/monetary theory model doesn't work,.. or not very well. A. You can't any more predict inflation from MV=PQ than the man in the moon. The money supply went up about 30% between 2020 and 2022 and inflation went to 9%. It's fallen from that extreme height a mere 4 or 5% and inflation is around 3 or 4%. Of course these are reported numbers,.. not the real much higher numbers. But 30% increase in money supply gets you 9% and a 4% reduction gets you 4%??? Obviously there's very little direct proportional correlation. M2 doubled between 2009 and 2019 and inflation averaged 2% per year. M2 went up 30% between 2020 and 2022 and we got 9%. B. And you can't blame it on some magical "long and varying lag". If MV=PQ is the right equation,.. then it's missing the time variables that define the lag. And if you can't get the timing on inflation or deflation accurately then what good is it? Something is amiss. And that's because inflation is more than just MV=PQ. C. Inflation has to do with supply and demand. The supply and demand of commodities, equipment, energy, labor,.. etc and the supply and demand of money where money has 2 components,.. 1. monetary policy, where if the Fed juices the banks to lend more, they do so with money creation (M2) that remains in the banking system backed by assets and an obligation to repay the loans (not necessarily inflationary) and 2. fiscal policy, deficit spending, printing M1 and sending checks directly to consumers where there is no asset or obligation to repay the loan.(extremely inflationary) Where these 2 components are like real and imaginary numbers in trigonometry, or phasors in electricity or vectors in 3 dimension in mechanics. Where fiscal policy deficit spending is a vector pointed up or down and monetary policy is a vector in the horizontal direction pointing left or right. Where the more vertical the component is, the more it directly adds to inflation or deflation. The US increased the money supply by about 30% from 2009 to 2019 and we had no significant inflation. It averaged about 1 to 2% per year. We increased the money supply by 30% between 2020 and 2022 and we get reported inflation of 9%. Japan has doubled their money supply through deficit spending between 2000 and 2024 and inflation has averaged less than 1%. And why, because their central bank buys their debt and keeps it in the banking system through 1. above. They don't do 2.,... and send checks directly to businesses and consumers, especially when the economy is "doing so great" and we're not even in a recession. That's not to say this is a good thing,.. because their currency against others has become worthless and at some point the debt has to be dealt with. But again and most importantly if MV=PQ can't provide a graph showing inflation plotted over time, it's wrong. That's the important part,... the "long and variable lag:" In physics I can tell/plot where a projectile has been and will be , how high and where it will land in time. If MV=PQ can't do the same,.. then it's useless. I mean after nearly an hour of Hanke patting himself on the back for "predicting" the height of inflation,.... he couldn't tell us when inflation will be quelled and or how low deflation could go. And so the stock market rallies on to irrational exuberance until the next crash,.. that he can't predict.

[@mackakiwinz4353]

Thank you your analysis is very well thought out taking all factors into account.