Summary:
Economist Steve Hanke predicts a recession could occur as early as the first quarter of 2024 based on the decline in the money supply since July 2022. Hanke explains that economic activity typically responds to changes in the money supply with a lag of six to 18 months. He believes a recession is already “baked in the cake” given the role of money in driving the economy. Hanke also notes that US inflation has cooled to 4% and there is a chance it could hit 2%. He criticizes the Federal Reserve for excessive money printing and suggests that both a recession and inflation could occur. Hanke has previously criticized Bitcoin as a bubble with no inherent value and has expressed skepticism about its performance as a hedge against inflation.
Key Points:
– Economist Steve Hanke warns of a recession potentially occurring in the first quarter of 2024.
– Hanke bases his prediction on the decline in the money supply since July 2022.
– Economic activity typically responds to changes in the money supply with a lag of six to 18 months.
– Hanke believes a recession is already inevitable given the importance of money in driving the economy.
– US inflation has cooled to 4%, and there is a possibility it could reach 2%.
– Hanke criticizes the Federal Reserve for excessive money printing and suggests that both a recession and inflation could occur.
– Hanke has previously criticized Bitcoin as a bubble with no inherent value and has expressed doubts about its effectiveness as a hedge against inflation.
Hot Take:
Economist Steve Hanke’s warning about a potential recession in 2024 raises concerns about the future of the economy. His analysis of the decline in the money supply and its impact on economic activity serves as a reminder of the interconnectedness of these factors. Hanke’s skepticism about Bitcoin’s value and its performance as a hedge against inflation highlights the ongoing debate surrounding cryptocurrencies. As the economy continues to navigate uncertainties such as supply chain disruptions and policy decisions, it remains crucial to monitor indicators like inflation and the money supply to anticipate potential downturns.
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