Stansberry Research, Released on 8/4/23

Fitch Ratings downgraded the U.S. credit rating from a stellar “AAA” to “AA+” earlier this week, citing “a steady deterioration in standards of governance” and overwhelming debt as motivating factors in its decision. Today, Daniela sat down with Steve Hanke, an applied economics professor at Johns Hopkins University. Steve argues the Fed’s aggressive rate-hike policy has caused the burden of today’s out-of-control debt to weigh heavily on everyday people. He says, “They’re just running the numbers, and the numbers aren’t sustainable. The burden of the debt is increasing tremendously.”

Steve also contends that the Fed is using rate hikes as a guise to keep prices elevated for
consumers. “Inflation is a hidden tax. No one votes on it. It’s imposed in an undemocratic way. Inflation is a bad deal,” explains Steve. He concludes by warning investors that the markets will remain volatile moving forward, highlighting the money supply as an indicator for an eventual turnaround. “We’re sleepwalking into turbulence in the market. For some reason, people think this ‘soft landing’ thing is in the cards… I’m saying no,” he asserts.

00:00 Steve Hanke Introduction
2:14 Implications of the Fitch Downgrade
6:01 Why Downgrade Now?
7:49 Janet Yellen Says Downgrade is ‘entirely unwarranted’
10:04 Is Inflation the Only Way Out of Debt?
13:41 Swiss Debt Break Model
16:31 USA Monetary Status
18:19 RFK Jr. Gold and Bitcoin Backing Dollar
19:56 BRICS Conference Approaching
23:05 Change in the Money Supply?
25:13 Avoiding a Recession

Steve Hanke is an American applied economist at the Johns Hopkins University in Baltimore, Maryland. He is also a senior fellow and director of the Troubled Currencies Project at the libertarian Cato Institute in Washington, DC, and co-director of the Johns Hopkins University’s Institute for Applied Economics, Global Health, and the Study of Business Enterprise in Baltimore, Maryland. Hanke is known for his work as a currency reformer in emerging-market countries. He was a senior economist with President Ronald Reagan’s Council of Economic Advisers from 1981 to 1982, and has served as an adviser to heads of state in countries throughout Asia, South America, Europe, and the Middle East. He is also known for his work on currency boards, dollarization, hyperinflation, water pricing and demand, benefit-cost analysis, privatization, and other topics in applied economics. Hanke has written extensively as a columnist for Forbes magazine and other publications. He is also a currency and commodity trader.

  inflation, investing, recession, steve hanke, stock market, us economy