280: Steve Hanke - Decoding the Drivers of Inflation and Markets
May 8, 2024
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Steve Hanke, an economist, shares insights on inflation and markets. He discusses macroeconomic factors, challenges prevailing narratives, and his trading background. Topics include the Fed's interest rate decision, neglect of money supply in economic models, analyzing GDP metrics, and concerns over rising debt and Modern Monetary Theory.
Professor Hanke challenges prevailing economic narratives by uncovering deeper forces driving inflation and market fluctuations.
Steve Hanke emphasizes the importance of closely monitoring macroeconomic factors when making trading decisions.
Hanke highlights the significance of money supply contraction and advocates for a proactive approach based on the quantity theory of money.
Deep dives
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Professor Steve Hanky Discusses Gold Breakout and Dollar Strength
Professor Steve Hanky, an economist and currency reformer, shares insights on the unusual gold breakout occurring despite the dollar's current strength. He notes that typically, when the dollar is strong, gold weakens, but this scenario defies that trend. Professor Hanky highlights the central role of China and Russia in driving gold demand and discusses the impact of government deficits and monetary policies on gold prices.
Professor Steve Hanky Shares Trading Insight and Historical Trades
Professor Steve Hanky discusses memorable trades from his past, including predicting OPEC's collapse and the subsequent oil price decline, as well as foreseeing the collapse of the Russian ruble in 1998. He emphasizes the importance of closely monitoring macroeconomic factors impacting trading decisions and shares his experience with trading commodities from a young age.
Professor Steve Hanky Analyzes Fed's Interest Rate Decision and Money Supply Contraction
Professor Steve Hanky provides insights on the Federal Reserve's decision on interest rates, highlighting Chair Powell's focus on steady rates in response to sticky inflation. He emphasizes the significance of the money supply contraction, linking it to historical economic slowdowns and advocating for a more proactive approach based on the quantity theory of money to address current economic challenges.
Trading commodities since 14 years old, Professor Hanke started learning the importance of closely following macro economic factors which impact the prices of currencies, commodities and consumer goods. His evidence-based approach uncovers the deeper forces driving inflation and market fluctuations and challenges prevailing narratives as it relates to economics. By exploring macro topics often overlooked by the mainstream, Professor Hanke broadens our collective understanding and invites us to think more deeply and critically about the economic forces shaping our world.
About Steve Hanke:
Steve Hanke is an American economist and professor of applied economics at the Johns Hopkins University in Baltimore, Maryland. Steve is known for his work as a currency reformer in emerging-market countries and served on President Reagan’s Council of Economic Advisers. Very recently, Washingtonian magazine recognized Steve Hanke in their annual list of Washington, D.C.'s 500 most influential figures in shaping public policy.