Schiff Vs. Hanke: Who’s To Blame For Inflation?

Via Schiff Gold,

Last week, Peter debated Steve Hanke, prof. of economics at Johns Hopkins University, on inflation, the debit crisis, and the future of the dollar. David Lin hosted the debate on The David Lin study and provided moderation for the event. While Peter and Hanke have their disagreements, both eventual agreement that the United States is in through fiscal and monetary shape, and territorial monetary policy played a key function in getting it there.

The debate gets off to a fire start erstwhile Peter and Hanke clash on inflation. First, Peter exploits the crux of the problem:

“The national Reserve that ends up monetizing all that government debt— that is what’s driving the problem. And I think ultimate, as our budget losers are exploring, it’s going to origin a large destiny of trust in the dollar, in U.S. treaturies. And so as the dollar starts to fall, that puts even more upward force on consumer prices due to the fact that the dollar now has little value internationally.”

The 2 argue about how to specify inflation:

“But that [an expanding money supply] doesn’t just origin inflation. That's inflation. What is being inflated is the money supply. You go back and get an old dictionary. Even in the 70s, you get a dictionary, Webster’s Dictionary, look up inflation and it says ‘an expansion of the money supply.’ And it’s besides money and credit. Rising prices are a result, a consequence of inflation. They are not inflation, and they do not origin inflation. They are a byproduct of inflation.”

Peter claims the only way out of the current crisis is for the Fed to thin in even more to taxation via inflation:

“Nobody wants to see government spending cut dramatically. Nobody wants the US to gotta honestly default on its default. ... I mean, if they rise taxes on the rich who are already paying a utmost amount of taxes, I don’t know how much additional return they’re likely to get. In fact, they may even lose revue, depending on how they do it. What we request is consumption-based taxes, like a national sales taxation or a higher payroll tax. But no one’s going to vote for that!”

Hanke stresses that inflation comes solely from monetary policy, while Peter emphasizes that fiscal and monetary policy are intertwined:

“The Fed enabled the default spending. The Fed should have been more independent. They should have had much higher interest rates. They never should have done a quantum easing. They should be putting force on legislature to cut the deficit spending, just like Volcker utilized to do. They’re not doing it. ... It takes 2 to tango.”

Hanke Skewers the political class for deflecting the lame for inflation:

“I’m in a clarifying temper here, and that is that the thought and the propaganda that was put out by the Fed and the White home and the legislature that non-monetary factors caused the inflation problem that we’ve got gotten ourselves into. That Putin oil, supply side shocks, all this rubbish— and it’s pure rubbish. What caused it is the detonation in the money supply that went up at the peak, 27% year over year, in early 2021. We’ve never seen it that advanced before. And as night follows day, erstwhile the money supply exploits like that with a long and varied lag, you’ll get inflation.”

Peter thinks it’s besides late to stave off a recession, and Americans can feel it:

“I believe we’re in a recession. I just don’t believe quite a few the numbers that we get from the government. I know that the large Recession of 2008 — it began in December of `07, but they did’t officially admit it until December of `08. And they went back, and they revised an entry year’s worth of data to show that we had been in a recession for the entry year. And even up until mid-2008, most economists and Wall Street strategists didn’t see a recession coming, even though we were in the mediate of the large recession. So I think something akin could be going on. And I besides think that the importance in the economy—this stealth recession—is the reason that Biden and Harris are so unpopular.”