The Julia La Roche Show #311 Steve Hanke: Money Supply Acceleration Could Reignite Asset Bubbles and Inflation
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Nov 26, 2025 
Economics guru and Johns Hopkins professor, Steve H. Hanke, dives into the complex world of money supply and inflation. He warns that the Fed's potential end to quantitative tightening could rev up money supply, sparking asset bubbles and inflation. Hanke critiques the Fed's data-driven policies and emphasizes the dangers of deregulation allowing massive lending boosts. He also predicts gold could soar to $6,000, while offering mixed insights on recession risks due to labor market softness and money acceleration.
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Money Supply Is The Key Economic Fuel
- The money supply is the primary fuel for the economy and recent acceleration is a warning sign.
- If money growth accelerates it first inflates asset prices, then consumer inflation follows with a lag.
QT End And Deregulation Could Loosen Credit
- Ending quantitative tightening and removing the supplemental liquidity ratio will loosen financial conditions.
- That deregulation could add about $2.6 trillion in bank lending capacity and risk renewed asset bubbles.
Fed Is Flying Blind Without Money Measures
- The Fed ignores money supply in favor of data-dependent, interest-rate focused models.
- Hanke warns this 'flying blind' approach creates policy instability and misses a key driver of inflation and asset prices.
