THE YEN CRUMBLES AGAIN AS THE US-JAPAN INTERVENTION FAILS – w/ Prof. Steve Hanke

State of the US Economy00:00:02

Professor Hanke analyzes the current US economy, emphasizing that nominal GDP is driven by money supply and inflation. He argues that while real growth may be sluggish, the massive influx of money supply ensures the economy is not heading off a cliff, though inflation remains a persistent issue.

Trade Wars and Economic Drags00:05:43

The discussion shifts to the negative impacts of trade conflicts, particularly with Canada, and the inflationary pressures caused by tariffs. Hanke notes that these policies act as taxes on consumers and disrupt housing markets, hindering long-term stability.

Military Spending and Debt00:09:36

Hanke critiques the massive increase in defense spending as an unproductive drag on the economy. They discuss the $40 trillion debt load, noting that servicing this debt now consumes a significant portion of personal income taxes, essentially acting as a hidden tax on citizens.

Bessant vs. Worsh: Policy Clashes00:24:27

The conversation covers the policy differences between Scott Bessant and Kevin Worsh. Hanke highlights Bessant's interventionist approach, such as currency manipulation and yield curve control, contrasting it with Worsh's preference for market-led interest rates.

Monetary Policy and Bank Regulation00:43:01

Hanke explains that commercial banks, rather than just the Federal Reserve, are the primary drivers of money supply through lending. He warns that loosening bank regulations could lead to further instability and inflationary pressures as banks expand their loan portfolios.