Wealthion - Be Financially Resilient
Steve Hanke: The Fed is Behind the Curve - Recession is Inevitable
Aug 20, 2024
In a compelling discussion, Professor Steve Hanke, a renowned applied economics expert from Johns Hopkins University, warns about an inevitable recession. He highlights the alarming contraction of the money supply and its implications for both the stock market and consumer behavior. Hanke argues that the Fed is lagging in its responses, leading to forecasting errors. He advocates for cautious investment strategies, suggesting alternatives like gold amidst economic uncertainty. Tune in to hear his insights and recommendations!
47:40
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Quick takeaways
- The contraction of the money supply since July 2022 signals an inevitable economic recession, highlighting the link between monetary dynamics and market outcomes.
- As consumer spending declines and unemployment rises, investors should prioritize safety by considering U.S. government bonds and diversifying into gold.
Deep dives
Rising Unemployment and Economic Indicators
The unemployment rate has been climbing from a low of 3.5% in 2023 to 4.3%, indicating potential economic distress. This increase in unemployment is concerning as it directly affects consumer income and spending power, crucial components of economic health. Measures suggest that the unemployment rate's upward trend may hint at an ongoing recession, revealing a disconnect between consumer behavior and economic optimism reported elsewhere. The correlation between rising unemployment and reduced spending underlines the risk of a slowdown in economic growth.
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