The David Lin Report Economist: Gold To $6,000 As Economy Implodes, Fed Loses Independence | Steve Hanke
Sep 22, 2025
Joining the discussion is Steve Hanke, a Professor of Applied Economics at Johns Hopkins University and a prominent expert on currency and monetary policy. He delves into the recent central bank actions, emphasizing their impact on inflation and market behavior. Hanke argues that gold could surge to $6,000 as the economic landscape shifts. He also critiques the Fed's loss of independence and explores the monetary strategies of major banks like the BoC and ECB. Expect insights on dollar depreciation and the potential success of a secular bull market in gold.
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Fed Controls Short Rates, Not Long Rates
- The Fed controls the short-term funds rate but not long-term yields or mortgage rates.
- Money supply growth and quantitative tightening drive longer-term rates and asset prices more directly.
Stop QT To Lower Mortgage Rates
- To lower mortgage rates, stop quantitative tightening and support mortgage-backed securities prices.
- Target the money supply rather than obsessing over Fed funds movements.
Golden Growth Rate: 6% Money Supply
- Hanke's 'golden growth rate' is about 6% money-supply growth to hit 2% inflation.
- Current U.S. money-supply growth (~4.8%) is too low, implying tighter monetary conditions than the Fed's rate cuts suggest.
