Economist Reveals When America Can Expect One ‘Whopper’ Of A Recession | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    Johns Hopkins University economics professor Steve Hanke predicted on Monday that America will experience a "whopper" of a recession in 2023 due to manipulation of the money supply by the Federal Reserve.

    During an interview with CNBC, Hanke noted that M2 - a measure of the money supply that incorporates cash, checking deposits, savings, and other relatively liquid assets - soared in 2020 as a result of the central bank's actions before plateauing this year, as indicated by data from the Federal Reserve.

    "The bottom line is we're going to have stagflation - we're going to have the inflation because of this excess that's now coming into the system," Hanke explained, arguing that Federal Reserve Chair Jerome Powell does not recognize that "inflation is always caused by excess growth in the money supply, turning the printing presses on."

    To stimulate the economy after COVID and the lockdown-induced recession, the Federal Reserve pegged a near-zero target interest rate and began buying $120 billion in assets each month - policies intended to lower the cost of borrowing while increasing the amount of liquidity in the economy. Officials have since announced two consecutive interest rate hikes of 0.75% such that the current target is between 2.25% and 2.5%.

    Hanke said that there has never been "sustained inflation" in history that has not been the result of runaway money supply growth. "That is why we are having inflation now," he continued, "and that's why, by the way, we will continue to have inflation through 2023 going into probably 2024."

    The United States met the rule-of-thumb definition of a recession - two consecutive quarters of negative growth - last month as the economy shrank at a 1.5% annualized rate in the first quarter and contracted at a 0.6% pace in the second quarter. Year-over-year inflation reached 8.5% in July 2022, according to data from the Bureau of Labor Statistics, with a slight moderation from the 9.1% reading in June 2022 driven by lower energy prices - even as costs for food, new vehicles, medical care, and shelter continue to rise.

    During a speech last week at the Federal Reserve's annual meeting in Jackson Hole, Wyoming, Powell vowed to continue executing policies such that inflation returns to the 2% benchmark largely maintained over the past three decades.

    "Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy," he explained. "Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them."

    Powell emphasized that unpredictable price levels seen during the 1970s and early 1980s taught the Federal Reserve that it "can and should take responsibility for delivering low and stable inflation" despite the fact that other developed nations are presently witnessing the same phenomenon.

    "Our responsibility to deliver price stability is unconditional," he said. "None of this diminishes the Federal Reserve's responsibility to carry out our assigned task of achieving price stability. There is clearly a job to do in moderating demand to better align with supply. We are committed to doing that job."

poll#154

Inarguably, the policies of the Democrats in congress and Joe Biden as the Executive is plunging the United States into a recession, if we are not already there; a recession that was completely avoidable. Will abrupt changes in policies occur in time?

  Yes, the Democrats have a bold plan, yet to be revealed, to save us.

  No, there will have to be a complete undoing of the damage done by these Democrats.

  I can't do simple math, so how am I to understand the concept of basic economics.

1,216 total vote(s)     What's your Opinion?

poll#145

After one full year of the Biden /Harris Administration: Does Joe Biden have the intellectual capacity, and, or the energy to lead the United States of America through the mess that he predominately created ... in just one year?

  Yes

  No

  Unsure

1,220 total vote(s)     What's your Opinion?