Steve Hanke’s Stark Warning for 2025 (Uncut) 04-24-2025

30% Market Crash Coming? Steve Hanke’s Stark Warning for 2025

I think Powell’s one of the worst Fed chairmen we’ve ever had. He’s had us on a roller coaster. I indicated that he has a position and the Fed has a position that the quantity theory of money is irrelevant and there’s no reliable connection between changes in the money supply and changes in nominal GDP.

He’s just he’s wrong. I’ve been long gold for a long time. It’s in a bull market for the last year.

Gold has been up 40 percent. And you say why? Hello and welcome back to Soar Financially, a channel where we discuss the macro to understand the micro. My name is Kai Hoffman.

I’m the Ed Jay, our mining guy over on X. And of course, your host of this channel. And I’m looking forward to bringing on a first time guest. It’s Professor Steve Henke.

I don’t think he needs a lot of introduction, but he’s a university professor over at Johns Hopkins and he teaches applied economics. Who else could we talk to? Who’s better to talk to about tariffs, recession and forthcoming or upcoming Fed policy? What should Jerome Powell do these days? It’s not an easy job to do. And I’m curious what the thoughts are of Mr. Henke.

In a few short seconds, I’ll switch over to my guest. But before I do that, hit that like and subscribe button helps us out tremendously. And it’s a free way to support our channel.

Thank you so much for doing that. Now, without much further ado, Professor Henke, it’s a great pleasure to have you on the program. Thank you so much for joining us here on SOAR financially.

Great to be with you, Kai. Yeah, we got lots to talk about. I wish I was actually in Germany right now.

It’s asparagus season, too. Oh, yeah, I was just in Munich. Don’t remind me.

Next time. Next time we’ll do it in person. We’ll have to invite you maybe out to our conference and host you in Frankfurt.

So you can enjoy the culinary scene. I’ll be in Amsterdam the first week in May and I’ll get the white asparagus there. Oh, perfect.

Perfect. With some hollandaise. Perfect.

Love it. A little lemon, some hollandaise, doesn’t get much better. Fantastic.

Steve, it’s very timely that you’re coming on today because we have lots to discuss. Lots going on, of course, also in the media coming out of the White House. Maybe we’ll start with I don’t know where the beginning is actually anymore, to be honest, but maybe with your assessment of the economy.

Let’s start there. What’s your assessment of the global, but also the U.S. economy right now, Steve? Let’s start with the U.S. and then move on from there. The U.S. for some time, I’ve anticipated that the U.S. economy this year will slow down significantly and probably go into a technical recession.

Now, that was before Trump was reelected. Why did I have that view? I had that view because I employ the quantity theory of money as the best way to determine the course of national income. And what that means is the course of nominal GDP and nominal GDP, of course, is the real rate of growth in the economy plus the inflation rate.

That’s not that equals nominal GDP. If you want to know where that’s going, you have to know what has happened to the money supply broadly measured. A year or two years prior to the data that you’re looking at right now and what’s happened in the United States, we’ve had a very unusual situation in which the money supply since the summer of 2022 is actually contracted.

The stock of money in the United States now is below the level at which it was in the summer of 2022. That’s only happened four times in the U.S. history of the Federal Reserve from 1913 on. And each one of those four occasions have resulted in recessions.

Actually, one resulted in the Great Depression, 1929 to 1933. So that was kind of baked in the cake, a policy of contracting the money supply that occurred before Trump entered the scene. He hadn’t even been reelected.

Now he was reelected and he’s gone on this tariff tantrum as well as changing many, many things within the policy structure and administrative structure of the United States. And so you have what’s what I call regime uncertainty that started to set in. And regime uncertainty is also fairly rare.

We’ve only really had it once in the United States. And that was in the administration of Franklin Delano Roosevelt and the so-called New Deal. This was during obviously during the Depression.

Roosevelt and the New Dealers were changing everything under the sun. I mean, very radical, like Trump, by the way. It became illegal for Americans to own gold, you know, with the New Dealers.

And all the gold clauses that were included in bond contracts or any other kinds of contract were refuted and done away with, as well as many changes in the government. So as a result, you didn’t have little pinpointed uncertainties that always pop up all here, there, everywhere. You had what’s called regime uncertainty, where the whole regime is changing.

So many things are changing. You can’t even more than you can shake a stick at. And what happened is that investors, of course, became very concerned and went on basically an investor strike.

There was there was essentially no investment from 1929 until World War II started in the United States. So the regime uncertainty created by the New Dealers. Meant that the depression was deeper than it would have otherwise been.

It would have been very deep, by the way, because the money supply actually contracted by 38 percent during the Great Depression from 1929 on through 1933. There was just a huge contraction in the money supply. But you had this regime uncertainty on top of it that just drugged the whole thing up.

So so now we’ve got this kind of one, two punch. We have the money supply contracting. That that occurred, started occurring, you know, a couple of years ago.

And now we’ve got Trump on the scene adding this regime uncertainty kind of element into the picture. And so I think that the probability of actually a technical recession this year is probably over 90 percent in the U.S. Now, that leads to the big thing in the stock market, of course, that that leads. I penciled in growth and earnings per share at zero.

Now, maybe if this tantrum continues with the tariffs, it could even go negative. Now, it’s a very interesting assessment of the economy overall. We need to dissect it just a little bit because you touched on a few things like economic growth, you know, Smoot-Hawley, but also the New Deal.

I think we need to see if there are some parallels, of course, today. And I’ve tried to let me see if I could steer us through that conversation and dissect it sort of in that way, like the IMF came out with their global growth forecast just yesterday and the U.S. was downgraded by over a percent, 1.8 percent instead of 2.8 percent. Eurozone was downgraded from 1.2 to 0.7. Do you agree with their assessment of the slowing of the global economy in general? Yes, I do.

Everyone is downgrading. For example, if you look at the let’s talk about earnings per share. If you look at the consensus, the Bloomberg consensus that at the start of the year, they had that thing up to I think it was about 18 percent.

Now they keep downgrading, downgrading. They’re down at 10 percent. Pankey’s down at zero.

I think they have it wrong. And the reason they have it wrong is that they don’t adhere. Wall Street, that is.

Wall Street or the Fed, they don’t pay any attention to the quantity theory of money and the importance of the money supply. I pay a lot of attention to it. I embrace the quantity theory of money.

And and that quantity theory of money tells me that the main driver in the economy will be changes in the money supply. That that’s the fuel that goes in the economic engine. And if you ran more fuel in there and goose the fuel, you’re going to get goose the nominal GDP.

You’ll probably get higher, higher real growth and higher inflation. The reverse is just the case. If you if you if you cut off the fuel and slow it down, as we’ve done in the United States, you’re going to slow the engine down and slow inflation down.

I brought a chart just for the M2 money supply from the from the Federal Reserve System here, Fred. And it seems like we’re almost at all time high levels again. Like, how does that fit together? Of course, we see the massive decline here from 2022 onwards where the Fed was running a QT program, which they pretty much stopped doing.

They haven’t called it QE yet and they haven’t dropped QT completely because they kept the five billion dollars a month QT program alive. I don’t think they’ve dared say zero, to be honest. So I’m curious what your thoughts are on on the Fed QT program, but also here at the money supply chart.

Well, the money supply, I already mentioned the contraction that’s occurred, but let’s let’s look at it from a different angle, and that is that look at the current rate of growth and M2 on that chart. It’s now running at three point nine percent. Now, what what’s Hankey’s golden growth rate using the quantity theory of money? You can calculate if the inflation target is two percent to hit that inflation target.

The money growth M2 should be growing, Kai, at about six percent or just a little over six percent. It’s growing at three point nine percent. So it’s anemic.

We not only have had the contraction, but anemic growth now. So so all of this fits into this very serious slowdown in the economy. Now, the reason for that bulge that you had right at the end of that chart, that that was due to the huge injection of money that started when the pandemic hit in February of 2020.

The Fed goosed the money supply. Actually, at one point, it was growing year over year at a little over 18 percent per year. And that’s the highest rate that it ever has reached since the Fed was founded in 1913.

So it was extraordinary. And as a result, of course, inflation went up. John Greenwood and I, using the quantity theory of money, said that the inflation rate would go up to as high as nine percent.

It actually went up to nine point one percent. Then using the quantity theory of money, we said by the end of last year, the inflation rate would go down to between two and a half and three percent. It ended the year 2024 at two point nine percent.

And now it’s gone down to two point four percent. This year, I think we’ll probably end up hitting the inflation target. Now, now, why? Why did I forecast that we probably would have this slowdown that’s going to occur this year? I thought it would probably occur last year.

The reason it didn’t occur is that big bulge in the money supply resulted in a huge amount of excess cash balances. In other words, if you divide M2 by GDP, you’ll get that’s the cash balances that are in the system. And the thing went zooming up a big bulge in it.

And it took until the end of last summer before that excess cash balance actually was burned off. It took a lot longer to burn it off than I thought it would. And that’s why I was a little ahead of the game when forecasting that we’d have a slowdown in 2024.

Now everything’s burned off. And we’re kind of, shall we say, running on normal again without this huge bulge and excess of cash balances in the system that people could spend. And and that’s why I think we’ll see rough waters ahead.

What do you make of that last little like run up here? Like if you take the end of the graphic, like at 2025, it seems like we’re back at all time high levels. Where’s that injection of capital come from? That seemingly is nobody nobody’s talking about. It’s not really a topic of conversation.

Is that the Fed just ending QT, like the banks having more access to liquidity that they might need? What do you make of that? I think it’s kind of irrelevant. If you if you look at the rate of growth, the year over year rate in March of actually, if you look at the year over year rate of growth and more. Let’s see if the number is right.

And in about February of last year, it was actually negative. The rate of growth year over year was negative one point eight percent. And then it’s steadily gone up.

And that’s that’s all you see. The little ball. But but but you’ve got to look behind the ball in the bulge is, well, what is the year over year rate? It’s it’s still three point nine percent.

And that’s a lot that’s a lot lower than six percent, a rate consistent with hitting a two percent inflation target. And even if you annualize and look at the margin, the three month rate of growth annualized is only four point one percent. The six month annualized is four point six.

So it’s it’s it’s accelerating a little bit from its from its negative position. But but it’s still below Yankee’s golden growth rate of six. Interesting, so it’s an interesting aspect, because I wonder where all that money is going.

Well, the money is it is going into the economy, but at an anemic rate. And if you look at bank, the bank loans, commercial credit by by banks, which, by the way, the biggest producer of M2 is what it’s commercial banks. It’s not the Fed.

Most people think central banks produce most of the money in the economy. Not true. And every economy, the central bank is probably only producing between 10 and 20 percent of the amount of broad money that’s produced in the economy.

Right now, by the way, if you look at the commercial bank growth rate, it’s it’s at three point four percent commercial bank loan growth. It’s about the same as the aggregate number that I gave you. And the reason for that is that most of the aggregate it was counted for by the commercial banks.

Money is produced privately. It isn’t produced by the government. The government defines the unit of account, the unit of account is the US dollar in America and Germany, where you are, of course, it’s a euro, but but who produces most of the commercial banks.

And by the way, I think what’s going to happen with this regime uncertainty that I talked about, Kai, is that bank the demand for bank loans as investors go on strike. We’ll go down, so the rate of growth is I don’t I don’t anticipate it going up with a with a bank produced money, I think it will probably stay anemic and maybe even go down. And if you look when Trump was elected, everybody said, oh, he’s going to deregulate.

There’s going to be a huge surge in M&A activity and so forth. With with regime uncertainty, the M&A activity is completely dried up in the United States, there is there is none. Yeah, I mean, I’ve heard of any M&A activity, of course, that’s that’s a big demand for bank loans.

That makes a lot of sense, it’s interesting, you were talking about the inflation rate, I do have a follow up for that. You obviously follow the true inflation numbers, I would assume. What do you make of that index and how does that fit in? Because the true inflation inflation number is one point four percent roughly.

Well, no, it’s two point four. And the true the true inflation index number, it’s a it’s a separate indicator. OK, OK, OK, OK, I OK, I didn’t I didn’t pick up there.

I mean, something was lost in your German translation or my translation. Anyway, the there this this is a very confusing and debatable area that people get all excited about. They’re all an index is it’s an aggregation of different things that and that makes up the index.

And there are all kinds of indices. And you just gave one at one point for I’m just using the headline CPI of two point four in the United States. And if we go the Fed’s favorite measure is the PCE that’s running at two point five and the U.S. core PCE is two point eight.

And if we go to the purchasing power parity, that’s two point seven in the United States. Now, why am I I’m and I could go on and on and on. There are lots of indices and you gave the true index at one point four.

Take take all I can say is I don’t like to. Essentially waste time getting into which index is the best index, take your pick. The point is what if you’re trading and paying attention to the inflation, the direction is what’s important.

And if you have a contraction in the money supply and an anemic money supply growth, it’s growing below the Fed’s target. And that target is two percent based on the CPI. That then I then then I think inflation, all of these things are going down.

So if you’re trading, for example, the direct it isn’t the level that’s so important, it’s a direction you want to you want to get the direction of the thing. Right. And the quantity theory of money will will give you that because any one of those measures, by the way, you’ve got a plethora of price indices.

One just as bad as the other, by the way. We’re talking we’re talking about, you know, to get the CPI index every month, they’re taking over ninety thousand price measurements for for three hundred different commodities, over three hundred different commodities. So so there’s a lot of fuzziness in there, Kai.

I’m not I’m not saying any one of these is is accurate. And the way Oscar Morgenstern, a famous Austrian economist and who ultimately emigrated from Vienna to Princeton, New Jersey, and it read a book and the book leaned back here and get it. Oh.

On the on the accuracy of economic observations, I would get it, but it’s behind my chair and I don’t want to move the chair. No, you’re perfectly centered right now. And Morgenstern goes through in detail if anyone’s actually interested in this topic and, you know, forget the assets on podcasts and that sort of thing.

If you really want to get into it, you got to read Morgenstern, the economics of the accuracy of economic observations. Morgenstern has a thing nailed. I require that book, by the way, for all of my students to read.

And it’s not it’s about all economic observations and data, DNP, disposable and everything and all sectors of the economy. So. So anyway, I hope I express my sentiments on that.

No, absolutely. Yeah, I appreciate your insights there, which sort of brings me to the Fed and what the Fed, some of the Fed commentary over the last, let’s say, seven days that also kicked loose a debate about whether Chairman Powell should be fired or not. But he was saying economy slowing down and inflation is going higher.

The Fed, like one of the Fed presidents, were saying four percent potentially, which brings me a bit of the counter argument to what you’ve been saying, of course, because they’re seeing it going higher. So they were talking indirectly about stagflation. I don’t think they were using that word, but that’s what they meant.

Weaker economic growth. That’s what the IMF confirmed. And higher inflation.

What do you make of that Fed statement? And should Jerome Powell be fired for that? Well, number one, whether he should be fired or not, I think he should not be fired because he has a term and, you know, riling things up by letting a governor complete his term of office, I think would be bad, actually. However, what about what about Powell? I think Powell’s one of the worst Fed chairman we’ve ever had. He’s had us on a roller coaster.

I indicated that he has a position and the Fed has a position that the quantity theory of money is irrelevant and there’s no reliable connection between changes in the money supply and changes in nominal GDP. He’s just he’s wrong and he’s been wrong. They’ve never been able, under Powell, to forecast inflation.

So I take his idea about inflation going up as it’s kind of ridiculous, because remember, when we had this inflation burst in 2021, 2022, he never was able to anticipate that at the Fed because he wasn’t relying. And he said so in testimony over and over again that that the money supply was an unreliable changes in the money supply were an unreliable indicator of changes in the economy and inflation. So I just dismiss him basic.

He doesn’t he doesn’t have a model for anything. He can’t test anything. He’s given us wild swings in the money supply.

The fastest growth rate we’ve ever had year over year and M2 is under his tenure. And now we’ve got this contraction and the contractions only happened four times in the history of the Fed. So he’s a roller coaster guy up, down, up, down, up, down.

And and remember, by the way, in the early inflation that we had when he was unable to predict it, he said, oh, this is a transitory thing. It’s all caused by supply side shocks and supply chain problems and the war in Ukraine that pumped the oil price up and so forth. He never said that inflation was coming from an explosion in the money supply.

Never. He never said that. He had all kinds of ad hoc reasons because the Fed is an ad hoc operation.

They’re data dependent. They’re looking at monthly data, weekly data, daily data, financial data, economic data that are coming out. They have their finger in the wind and they don’t realize that all of those data that are coming out are the changes in the data are caused by changes that occurred in the money supply.

A year ago, two years ago, maybe even three years ago, they see no connection whatsoever. They’re not looking at changes in the money supply and how that is related to changes in financial data and economic data. So I think he’s been a terrible Fed chairman.

And I think he’s wrong, by the way, what he’s saying about the tariffs causing inflation. Inflation is always and everywhere a monetary phenomenon. If you look at world history, which I’ve done, I have never found a significant inflation that is an inflation rate over 4% lasting more than two years that hasn’t been the result of a significant increase in the money supply prior to the observations in inflation that you’re looking at.

Never. You can’t find it. Not very interesting.

I appreciate that because money supply never comes up in anything. I’ve been following the Fed now quite closely for the last couple of years. There’s no mention.

All right. The question now is, though, QE has been coming up more often than not. Even the younger economists in Germany, they don’t follow it either.

This is kind of shocking, actually, because traditionally, the Germans latched onto the quantity theory, and we’re always quantity theory monitors. The new ones aren’t. And of course, that’s why the new younger economists in Germany have the whole thing wrong, because they, like the economists in the U.S. And most of the young Germans, by the way, they’re trained in the United States.

So what do they have? What’s their model? They use post-Keynesian macroeconomic models. And those post-Keynesian macroeconomic models, they don’t include a monetary aggregate. The M2 kind of thing that you’re looking at in that chart, it’s not included in those post-Keynesian models.

So they’re not looking at the money supply. No, they’re absolutely not. They basically have been poorly trained.

Well, we got history to prove that money supply is actually quite important, especially when you try to print yourself out of debt. And that failed miserably. I don’t think we need to go into history here, Steve.

But we will touch on history in a second, because I want to talk about Smoot-Hawley and the New Deal era. But I don’t think we’ve learned anything from history here that printing our way out of a situation or bad situation is the solution here. Have you seen that anywhere, by the way? Like a bit of a tangent of where I wanted to go, but have you seen that money printing can actually solve any problems? No.

The only thing that really solves things and creates stability—and stability might not be everything, but everything is nothing without stability—is a constant rate of growth in the broad money supply, a rate of growth, given the quantity theory of money and the equation of exchange, MV equals PY, that is constant, that’s roughly constant. In the U.S., it’s about 6%. By the way, it’s more or less the same.

It’s a little lower in Europe, but it should be between 5% and 6%. It varies. Now, China, for example, let’s look at China.

What’s the Hanke’s growth rate for China? China, a very important economy, they’re having big troubles now. And the reason for that is that they’ve changed their inflation target from 3% to 2%. And at 2%, the Hanke’s growth rate for the money supply, broad money, is 10%.

But they’re only growing at about 7%. So it’s been way too slow, and that’s why the economy—that’s why they’re actually deflation. The inflation rate, it’s been about zero for the last several months in China.

It’s been below 2%. And the reason it’s below 2% is that the broad money growth is 7%, which is 3 percentage points lower than Hanke’s golden growth rate. And what’s happened—inflation, by the way, they’ve now entered a kind of a doom loop because they have what’s called a balance sheet recession.

Everyone is deleveraging their balance sheet. So when you deleverage, and if everybody’s deleveraging, there’s very little demand for credit because you want to get rid of debt. You don’t want to add debt if you’re deleveraging.

So that’s why they call it a balance sheet kind of recession. So China’s in a very tough spot because the only way they can really goose the money supply and get it up to 10% is to have the central bank itself go into quantitative easing, which they could do, by the way. But remember, central banks are a small contributor to the total broad money supply.

Commercial banks are the big contributor. And that’s going to be tough to get the commercial banks to goose things because on the demand side, it’s going to be weak because of this balance sheet recession and deleveraging thing that’s going on. Now, let’s get to the history part real quick.

Before we run out of time, I know we’re both there on a bit of a timer, but Smoot-Hawley we need to talk about, but also the New Deal. What are the similarities that you’re seeing right now? And how scarily similar is it to what we’ve seen in the past right now? Well, the rough scenario, the Great Depression and what we see now, the narrative is the same. Of course, the severity in the Great Depression was much more exaggerated than anything I would be anticipating in the United States for 2025.

I said there are two stages to the Great Depression. One is a contraction in the money supply. That’s the first order condition that really drove us down.

But we had the contraction. I said 38%. We’re not talking about anything close to that now.

So you can’t even imagine that kind of a contraction. So that’s one stage in the Great Depression. The second stage, you mentioned Smoot-Hawley with huge increase in tariffs and counter tariffs all over the world.

And we’re not quite in that ballgame yet. Although Trump, it really is toying with getting into the Smoot-Hawley kind of area. So that is a problem.

And that’s the regime change part of the thing. So money supply contraction, we’ve got it. And regime change uncertainty, we’ve got that.

But all of these things are the same kind, but not the same degree. The degree is much, much different than it was in the Great Depression. The degree was much more severe in the Great Depression.

I was going to say your voice doesn’t sound like there’s urgency just yet. We’re seemingly headed that way. But how urgent is it? Is it time to panic? I’m exaggerating, of course, a little bit.

I’m curious, how close are we to falling off the cliff here, Steve? Well, I don’t think it’s ever wise to get in a panic about anything. I tend to be a little bit of a member of the stoic school. So keep your wits about you and think things through.

The main thing is don’t panic, but think. And that’s what we’re trying to do now. We’re talking, Kai, and we say a little bit of a brainstorming session on the economy.

And the fact that I think, by the way, that the market, we could see very easily in the United States a correction of 15% to 30%. Because the economy is going to be slowing, number one. And number two, earnings growth is going to disappear.

Good at zero. And we’re in a situation, I have something I call a bubble detector, Dr. X’s bubble detector, which I’ve written about. You can Google about it.

And we are in bubble territory in the United States. The stock market is overhyped, overbought price. So if you’re in a bubble and people haven’t anticipated the economy is going to slow, earnings are going to slow, and that means the PE ratios will drop, the market will drop, that’s what you have to be thinking about.

So you don’t want to be long the index, by the way. You might keep some of your good stocks, but you want to be, why do you think Warren Buffett is 27% in cash? And if you look at the Wall Street Journal just today, by the way, the herd on the street section, which is a highly financial section, one of the best ones, that, or if you go to the FT, you go to LEX, that’s where you find high quality stuff. The Wall Street herd on the street today has a column on perfect timing of unloading some of Apple position.

He still has a huge Apple position, but since he liquidated his position, Apple has lost about a trillion dollars in value. I’m surprised, like everybody questioned him, but nobody followed him, if that makes sense. Everybody said, oh, he’s cash, but why should we go into cash right now? Everybody was questioning him, and Warren Buffett has the best track record on Wall Street, bar none, regardless.

I’m sorry, the guy deserves his status. We don’t know what’s in Buffett’s mind, but we can go through scenarios, and one scenario I’ve been on, because I’ve been interviewed on Buffett, and I teach economics courses at Hopkins, our evaluation techniques are very Buffett-ish, if you know what I mean. They’re fundamental valuation models, and so you have to think, well, what is in Buffett’s mind? What are the possible scenarios that led him to such a hoard of cash? It’s pretty easy to figure out a reasonable scenario, and one element in that scenario is that I think Buffett anticipated, he saw storm clouds on the horizon, let me put it that way, and made adjustments accordingly, and the Apple adjustment isn’t because he doesn’t like Apple.

He does like Apple. He holds a huge amount of Apple, but he said, my God, we’ve got so much Apple. Maybe we should thin things down just a little bit.

I was going to say, he lives in Omaha. So that’s not what people should be thinking about there. Buffett lives about 45 miles from where I grew up.

In Iowa. No, what I meant is he saw the storm clouds and probably a few tornadoes coming his way as well. Yeah, yeah, he did.

Spring always brings storm clouds in the Midwest. He spotted some of them coming in western Nebraska, Omaha’s in eastern Nebraska. No, absolutely.

Steve, allow me one last question. Always good. Yeah, gold at all-time highs, bond yields are rising, and the US dollar seems to be relinquishing some of its value recently.

What should investors do? Where should we go? I just listed the tier one assets here, of course, but how should investors position now for the storm? Well, this gets into one aspect. What usually happens in the United States, you say bond yields have gone up, but the stock market’s going up. Usually they go in opposite directions.

So the US is kind of behaving like an emerging market. I think it’s becoming, if this continues, it’ll be the biggest emerging market in the world. Now, in terms of its relation between equity prices and bond prices, I’ve been long gold for a long time.

It’s in a bull market. The last year, gold has been up 40%. And you say, why? Why the US and Europe have been in the sanctions? They’re sanctioning everybody.

Now, sanctions are like tariffs. They’re a form of protectionism and a form of disruption. And the sanctions have caused central banks around the world to lighten up on the number one international currency, the only international currency in the world, the US dollar, and they’re going into gold.

So that’s the beginning and the end of the story. As long as these sanctions regimes and uncertainty, it’s lawlessness that’s going on. It’s something called an enemy.

And if you look up enemy and go back to the origin of the word, which is a Greek word, you’ll find that it means lawlessness. The world is entering a phase of lawlessness. We’ve always had this around in South America, Africa.

Essentially, every place outside of the world has always had a lot of enemy. Now, we’ve got an enemy increasing throughout the world, including the Western world. But a lot of Western countries, they’re not even following international law.

They’re just ignoring it. So in that situation where enemy is increasing, gold becomes buy gold, wear diamonds. Diamonds are best because you can stuff them in your socks and you can run with them.

So, yeah, absolutely. I mean, they’re even better than Napoleons. A sack of Napoleons, you’d have to drag the thing around.

It’s kind of heavy. But diamonds, you can stuff a lot of them in a bag. Exactly.

Exactly. Professor Henke, Steve, it was a great pleasure to have you on the program. Did you offer any free lectures at Johns Hopkins that we could follow online, by the way? No, we can do more frequent podcasts, Kai.

They can follow me on your podcast. I’d love that. It’s hugely educational.

I really appreciate your time. Where can we send our audience in the meantime? I know you have a really active Twitter channel as well. Yeah, my ex account is at Steve underscore Henke.

And also, two things where they can get fresh, my two most recent books. One was published by Paul Gray Macmillan, co-authored with Leland Yeager. It’s called Interest, Waiting.

It’s a category book that has a lot of finance in it and a lot of monetary policy. And then the new one that’s coming out on May 6th is Wiley’s publishing. I co-authored that with Matt.

The last few seconds were cut short just a little bit with Professor Henke, but really appreciate you watching. Thank you so much for tuning in. Make sure to follow him on X. And of course, make sure to check out his books.

It’s a wealth of knowledge. Really appreciate his time coming on. And of course, if you haven’t done so, hit that like and subscribe button.

Follow us on X. Follow us on YouTube. It’s a free way to support us by just hitting that subscribe button. So we thank you so much for doing that.

And of course, we’ll be back with lots more here on SOAR Financially. Thank you so much for tuning in.