The David Lin Report Inflation Surge + Yen Carry Collapse: Economist’s Dire Warning For Market Bubble Pop | Steve Hanke
Dec 8, 2025
Steve Hanke, a Professor of Applied Economics at Johns Hopkins University and a renowned expert on inflation and currency policy, shares his dire inflation warning. He discusses the factors contributing to rising money supply and critiques the Fed's focus on data over essential money metrics. Hanke explains the complexities of the yen carry trade and its potential unwinding, linking it to risks in the equity markets. He advises listeners to rebalance their portfolios to mitigate exposure to these market dynamics.
AI Snips
Chapters
Transcript
Episode notes
Money Supply Signals Rising Inflation
- Money supply growth is the primary driver of inflation and currently points toward loosening, not tightening.
- Steve Hanke warns this will likely raise inflation above the Fed's 2% target as credit expands.
Four Forces Driving Monetary Loosening
- Multiple simultaneous loosening forces are converging: imminent Fed cuts, end of QT, SLR removal, and fiscal deficit-funded T-bill demand.
- Together these will increase M2 growth and amplify inflationary pressures.
Bank Money Growing Faster Than Reported M2
- Bank-produced money is already growing faster than headline M2 and has exceeded Hanke's 6% 'golden' rate.
- He expects commercial-bank-driven M2 to accelerate further once the supplemental liquidity ratio is removed in April.