Is the U.S. economy set to face an imminent collapse? Learn why Professor Steve Hanke predicts why the economy is heading for a crisis and how the Fed could spark the next recession. In this episode of ‘Speak Up’, Anthony Scaramucci speaks with Professor Steve Hanke, a leading expert in applied economics and co-director at Johns Hopkins University. Prof. Hanke explains the alarming contraction of the money supply, its historic implication and why he thinks the U.S. economy is heading for a crisis. Discover how current fiscal policies might lead us to the brink of a recession and what you can do to protect and grow your wealth in these turbulent times. From the impact of quantitative tightening to the long-term outlook on inflation, Hanke provides actionable advice and forecasts you can’t afford to miss.
Steve Hanke 0:00 fiscal policies simply way out of equilibrium, shall we say, it's not sustainable. So I would start doing something with it right now. And as I say, what I would do is be pushing for a constitutional convention and the constitute change in the Constitution that impose something like the Swiss debt break into the US Constitution, that that that would fix the fiscal thing right away. The next thing I would do is, is get a chairman of the Federal Reserve that was in there paying attention to what was going on with the money supply. Somebody like Paul Volcker, who paid attention to the money supply, it's all about the money supply. The current chairman Powell is not even looking at the money supply. They don't even look at it. They poo pooed the thing. Anthony Scaramucci 0:59 Hello, and welcome to Speak up here on the wealthion network. I am your host, Anthony Scaramucci. Today joining us Steve Hankey. Steve is a Professor of Applied Economics. And he's the founder and co director of the Institute of Applied Economics, global health in the study of business enterprise at the Johns Hopkins University. Steve, thank you so much for joining us, I'm going to get right into it with you if you don't mind. I love your bookshelf. By the way, I'd like to have a big book reader. So I'm sure you got some really smart stuff on that bookshelf. What's happening in the economy? Sir? Where is inflation? We at skybridge think the inflation numbers are lower than the Fed is suggesting? Do we have that wrong? Are we in a period of long term inflation? Steve Hanke 1:45 No, I think generally, broadly speaking, Anthony, you're correct. And the reason for that is that the the money supply, broadly measured by him to the broadest measure that the Fed has, has been falling, and contracting since July of 2022. And it's actually contracted by almost 4%. Since July of 2022. That's, that's only occurred four times in US history. You gotta have to go way, way back to 1948-49 to find the the last contraction and then you go, you go back, you got another one and 3738 and then of course, the big kahuna 2933, that was a great depression. And then 1920 1922, you had another contraction. So they're, they're very, very unusual. We haven't had any in modern times. And they're always followed by economic slowdown and recession, of course, the Great Depression was 2933 contraction. So so the economy is is is going to slow down because money is the fuel that drives the economy. And and with long leads, and variable leads after you get these changes in the money supply, then you get changes in asset prices, changes in economic activity and changes in inflation. So what did we have on the upside? We had the money supply, skyrocketing. And in February of 2021, it was growing at 21%, 27% Sorry, 27% per annum. That's a record. It's never grown that fast. And we got inflation makes it exactly what we thought. Now it's contracting. And we're back to your point, that inflation has been kind of plateaued a little bit in here for four months, but it's, it's coming down. It's baked in the cake, John Greenwood. And I think by the end of this year, it'll be down to two and a half to 3%. So that's a kind of a long answer, but you gotta get the money supply. It's all about the money supply. Anthony Scaramucci 4:09 Okay, and I appreciate all that. I mean, been a long term monetarist. They understand exactly where you're coming from, I guess. I guess the question I have is, if you were the Fed chair, let's say you were the whole board. I empowered you and made you the Fed czar. You'd be cutting rates, you'd be waiting to cut rates. Are you worried about the economy slipping into a recession and unnecessary recession? If they don't start to move on the rate table? Steve Hanke 4:36 I would be reducing rates and stopping quantitative tightening. Stop quantitative tightening stop the shrinkage in the balance sheet. Because when your quantitative tightening occurs, what happens is that the the Fed is is no longer buying bonds and refreshing the bonds that are that are going off the off maturing, they're having to sell as bonds to. When that happens, the general public pays with a check out of their checking account for the bond. And, and the reduction in their checking account reduces the money supply. So it's a drag on the money supply. So so we don't want that the money supply should be growing. hankies golden growth rate, Anthony is about 6%. Now that's consistent with hitting an inflation target of 2%. If you want to hit two, you got to grow the money supply, but five or 6%. Right, right now, the money supply is growing a little over 2%. Anthony Scaramucci 5:48 So my next question is like sort of related to the same thing. It's, it's the fiscal policy. So you've got the Fed, probably doing the right thing, they've taken some money out of the system to try to reduce inflation, but we are spending like drunken sailors, I mean, it's six and a half to 7% of the GDP of the country and deficit spending. At a time when the country's more or less at full employment, the participation rate seems to be pretty good, sir. What what is that the right thing to do to where the CBO is now saying we're gonna have a $50 trillion deficit over the next 10 years in terms of the cumulative deficit? Is that the right thing to do for the United States? Steve Hanke 6:32 No, the right, the right thing to do is get that deficit on the on a shrinking basis, not an expanding basis, and get our fiscal house in order. So it's sustainable. Even the nonpartisan Congressional Budget Office says this can't go on. This is not sustainable. So how do you how do you correct it? There, there are only three ways to do it. One is to reduce government spending, that would be the best thing, by the way for the economy, to goose the economy, reducing government spending, and letting the private sector have more of the change would be the best policy. But you also can shrink a deficit by increasing taxes. Now that that slows the economy down. So that's not that's not so great. You and this, I'm talking about direct taxes, what you pay on April 15, you can also have another kind of tax to shrink the the burden of the fiscal deficit and the debt to GDP. And that's what's called an inflation tax. And that's bad. So all the two taxes are bad, and shrinking. government expenditures are good. So I'm on the shrinking government expenditures are slowing those down to close that deficit, the deficit is definitely bad. Anthony Scaramucci 7:54 Do we have anybody that is willing to do that, though? Steve Hanke 7:59 I don't see anyone on the political scene that's willing to do that. And if you look at the history of fiscal control, if you have statutory changes, that that are put in place new fiscal rules that try to slow things down, those tend to work for a little little while, and then they break them. So the only way you really can do it, I think, is to have a constitutional convention under Article Five of the Constitution, and look specifically at how to change the constitution that would require something like a Swiss that break like, like the Swiss do, they change their constitution, and now they must balance their budget. And the government expenditures can't grow any more any more rapidly than the rate of growth in the economy. So that's that. I think that's the only long term solution, really. Anthony Scaramucci 9:00 if I talk to business leaders, no one cares if I talk to the campaign. So I have friends on both campaigns, the Biden campaign and the Trump campaign, don't care not going to stop it not going to do anything about it. Don't care. So why such apathy, you're concerned about and I'm concerned about it. If I was in the government, I'd be pulling a five alarm fire, I'd be working on a 15 year deficit reduction plan. I'd be telling the American citizens how dangerous this is and how we're going to lose our dollar supremacy we could I mean, you're you're now spending more on interest rate payments, and we are in national defense and that's only going to accelerate sir so. So what am I missing or, or is you know that because there is also wisdom in crowds? Maybe I'm completely wrong. Listen, I've been humbled by life and markets, professors, so I'm not here even pretending for a moment that I'm right. I'm just Am I missing Something is the marketplace, right that the indifference is the right approach? or should there be some some less indifference. Steve Hanke 10:07 You and I are in the same camp, obviously, on this, on this score. These kinds of things aren't a problem until they sneak up and bite you in the rear end. It's that it's that kind of problem. And, as herb Stein, who was the chairman of the President's Council of Economic Advisers under Nixon once said, If If something can't go on, it will stop. And this can't go on. And it will stop. And what people have to think about, are those three options that I just mentioned to you. Are we going to, are we going to squeeze government spending? Are we going to increase taxes? or direct taxes? Are we going to have more inflation tax? That's that's the only thing that can happen. And it will happen, by the way, because it Stein says, if something can't go on, it will stop. Anthony Scaramucci 11:06 Yeah. Well, I mean, you know, that's the thing I'm worried about, sir. I mean, you know, this is the I mean, and it ties into my next question, which I want to ask you about the stimulus when I look back at the stimulus, and the amount of money that was over inducted into the economy. Did we miss handle that? And so the question is, you had a crisis. And so what ends up happening is the we overreact to the crisis, or sometimes we under react, but mostly overreact when it comes to monetary supply and fiscal policy. And so, you know, are we setting ourselves up for that type of collision again? And so first question, though, is, do you think we put too much money into the economy during COVID? Steve Hanke 11:52 Well, the way we put it in was a problem, because we had a massive increase in government spending a massive increase in the deficit. And the bonds that were being issued to finance that deficit, were being bought by the Federal Reserve, about 90% of the deficit was was being what they call monetized, Anthony. And that's why the money supply shot up, we would not have the inflation we had, if that monetization of the fiscal deficit hadn't occurred, if those bonds are dismissed, sold to the general public, that we would not have had the kind of inflation that we experienced. So it was the Fed, that was kind of basically in in bed with, with the fiscal authorities. And that's where the nub of the problem is, it comes back to what I originally said it money matters, money dominates, it's all about the money supply. Anthony Scaramucci 12:54 Okay, so let me set the stage for you. It's 2030. We're spending $2 trillion in interest rate payments, one and a quarter trillion dollars in national defense. And we're upside down in our budget deficit by two and a half trillion dollars and we're having $1 crisis. People are shedding dollars internationally, because they're worried about this upside down applecart. What would the United States do in the event of a crisis like that, sir? Steve Hanke 13:25 With those who occupy Washington, DC and got us into the hypothetical crisis that you just put forward, it's very hard to predict what they would do. My guess is they would probably panic and make a move that maybe would make the crisis even worse. So so so it's this is one thing in the in the markets I mean, you're in the market every day and and the thing that amazes me is that the markets aren't aren't pricing any of these kinds of things in at all. You and I are talking about the debt and the deficit and in the CBO says this isn't sustainable. We we know the arithmetic just can't keep going like this. The markets just don't have anything priced in for that the markets are not pricing any any of these broad things in for example, the the proxy war, the US is engaged in with Russia right now in Ukraine, that none of none of that's priced in what's going on in the Middle East. None of that's priced in there, just all these larger things that are kind of off beyond the horizon that that bite you when they buy before biting. Nothing is happening. Not none of that's priced in. No one No one's pricing in a bite. Anthony Scaramucci 14:50 Okay, um, what would you do so is there anything actionable? Given everything that we're discussing? I always like asking our guests is, is there something x tenable that you would do today that would improve your portfolio Steve Hanke 15:07 Actionable in terms of fiscal policy, fiscal policy is simply way out of equilibrium, shall we say, it's not sustainable. So I would start doing something with it right now. And as I say, what I would do is be pushing for a constitutional convention, and the constitute change in the Constitution that impose something like the Swiss debt break into the US Constitution, that that that would fix the fiscal thing right away. The next thing I would do is, is get a chairman of the Federal Reserve that was in there paying attention to what was going on with the money supply. Somebody like Paul Volcker, who paid attention to the money supply, it's all about the money supply. The current chairman Powell is not even looking at the money supply. They don't even look at it. They poo pooed the thing they said it doesn't matter. It doesn't count. So it's not in there. It's not in their models. It's not in any of their templates. They they hardly even report on it. How many how many times do you see in the newspaper? A headline of what just happened to the to the change in the money supply during the last month? You've got to look in some footnote, even on the Wall Street Journal to find the number. Anthony Scaramucci 16:29 What about from my portfolio? What would I do for my portfolio actionable right now, Steve, Steve Hanke 16:35 Let's talk about the stock market for just a second. To get my kind of perspective, we the stock market, the s&p 500. It's up about 15% this year, and we've had over 30 record closes this year. And there's very little volatility in the markets this day is the trading range plus 1% minus 1%. The fear gauge the joy index is below 12. That's the lowest it's been in five years. Now. That's the price for options to hedge against a downturn in the stock market. The breadth of the market is actually very narrow 10 stocks make up 37% of the market cap. And if you take this if you just don't wait, given market cap size of the stocks trade on the s&p 500, just a simple sum of those, the market actually would be down the s&p 500 be down in the last 30 days. So and the volumes low. And as I say no factoring in of any of these geopolitical things, no factoring in of what I think we will see a continued slowdown and a recession, starting probably late this year, early next year, due to the fact that we've had this monetary contraction, we've got an inverted yield curve. We've got gross output, that's if you take all the sales, we've got gross output is all a sales between all intermediate everything in the supply chain. And that is growing actually less than at a slower rate than GDP, which is the major for final goods and services in the economy. Now that's all all of these things are very negative. The price the market is very pricey. If you look at Robert Schiller's inflation adjusted P E, and look at the data since 1881. We have 95% of the time, the PE that inflation adjusted Shiller PE is been less than the P e is right now. So the P e is the price prices are strong. So what would I do? Well, I I'm a, I'm a buffet kind of guy. And Buffett's rule, when Buffett really piled into Apple, he said, I want to look for a stock that's trading, it's cheap, less than 15 as a P E. Well, the current PS but a little a little north of 2021 in the stock market, so so so the market wouldn't qualify for the Buffett Rule. And then Buffett said, I want a company that there's a 90% chance that the earnings will grow over the next five years. And the third element of Buffett's rule he says, I want a 50% chance that their earnings would grow at least 7%. Year over year. Well, now how many companies qualify for the Buffett Rule investment plus this overall picture? I have of caution in there the markets pretty tough. So I would say hang on to your good stocks that are doing well. And And, but pay attention to things. And and you're not going to find any stocks to buy that merit buying, given the Buffett Rule, there's there's essentially nothing to buy. And then also in your portfolio, since inflation is coming down, you want to be long the 10 year, the 10, the 10 year bond, remember the the interest rate on the 10 year, when I, when I, when I was recommending going along the tenure, the yield was about 5%. And I said, you know, inflation is going to be coming down, because the money supply is contracting. And with that, interest rates always follow inflation, Anthony. So if inflation is coming down, interest rates are going to be coming down on these long bonds. So enter the 10 year, I think I think it's a pretty safe bet. Keep your keep your good stocks that are doing well. And and I and follow the Buffett rule about adding any new ones, and I don't think you're gonna find many. Anthony Scaramucci 21:05 So he just added occidental. What do you think of that? Steve Hanke 21:14 He usually knows what he's doing. That's what I think of that. Anthony Scaramucci 21:18 Right. So, but I mean, maybe the strategy is just to buy Berkshire Hathaway right. I mean, I, I often think about that when I first met him. I've Ted, you know, if I just bought if I didn't buy any private equity? Professor, if I didn't buy the yes, I've just bought him. I would have been fine. You know, I mean. Steve Hanke 21:41 you know, he's over 90, and he's clearly still hitting the long ball. Anthony Scaramucci 21:46 Yeah, there's no question. Alright, so... Steve Hanke 21:50 By the way, another he did just by Occidental, but he also has been accumulating huge pile of cash. Anthony Scaramucci 22:03 Yes, I mean, he mentioned that during his annual meeting in May, that he's he's got this ton of cash. And he's built up. I guess, you know, people a lot of disinformation out there clear some things up for all of us the petro dollar agreement with the Saudis. It looks like they haven't read up that agreement. Some people say that that's a big deal. Other people say it's not that big of a deal. But you know, the BRIC countries, many of these countries are thinking about figuring out ways to trade in commodities, away from the US dollar. Our sanctions on our enemies have certainly created incentives for these people to do that. Are we at risk of losing our mantle of monetary leadership? Steve Hanke 22:50 Well, for for one thing, that petro dollar agreement, from what I can figure out, never existed. So this, this has been something that's been floating around on the social media, but as someone who's, you know, been studying currencies, more or less, for over 50 years, I, I'm not aware of that agreement from what I can figure out it never really existed. But, but be that as it may, what, what are the risk? Well, the risk if you go back 2500 years, and look at all the currencies, there's or the world economy for 2500 years, there's always one dominant international currency, the US dollar happens to be the dominant international currency, there have only been 14, Anthony and 2500 years. So it's, it's hard to knock the king off off his throne. But how do you do that? When the challengers come in and knock a king off the throne, they come in with basically bad monetary management and bad economic policies of one sort or another. So let's look at the US and the US dollar. Right, right. Now, of course, it's unbelievably strong. It's been unbelievably strong for a couple of years. You know, it's the O line as a trader, you'll know this and appreciate it. Buy dollars were diamonds. And so that's where we're at right now. So but but if you look at the social media, you've got basically the enemies of the United States who want to D dollar rise so that they're they're fanning the flames saying, all these weaponization of the dollar sanctions and so forth, are going to cause the dollar to tank and somebody else will take over. Well, I agree sanctions are a bad thing. And the weaponization of the dollar is something that makes it more vulnerable, but but it has something to keep your eye on. But at this point, we're certainly not in any The tipping point. So, so you have, you know, China and Russia, they talked a lot about D dollarization. And, and the fact that the dollar is history, and of course, all the crypto crowds, they put out basically the same propaganda. So you get a lot of chatter about D dollarization. But the fact is, if you look, even for central bank reserve buying central banks are piling into the dollar. Now, they're actually increasing their dollar reserves, they the percentage of their total portfolios, that has been in dollars, it has gone down a little bit in the last 10 years. But one of the main reasons for that is that the Swiss were intervening tremendously to try to hold down the value of the Swiss franc, which kept ever appreciating, and they were doing that by by doing what they were buying euros, they were selling Swissy and buying Euro. So that's what that's probably the main factor. If you look in the aggregate reserves of all the central banks, that's the reason the dollar is rule looks like it was sliding a little bit. It was mainly that Swiss intervention, now they're actually coming back into the market and buying dollars. Anthony Scaramucci 26:19 I mean, it's brilliant exposition, which is why I'm not interrupting you. I want to talk about this tweet that you put out last week, okay. Even though sanctions have a history of failure, US Treasuries announced more of them on the Iranian backed Houthis. In Yemen, stupidity is doing the same thing over and over again, and expecting a different result. So so when we agree, I mean, I loved your tweet, I guess the question is, if you were this Secretary of the Treasury, what would you do? If anything? Would you have no sanctions on any of our adversaries? Are I what would what would you do? Steve Hanke 26:53 As a principal, I would, I would deep exit sanctions are counterproductive. They hurt the United States more than they hurt the enemy. What do they do they strengthen the enemy, you get a rally around the flag effect. Right? If you sanction somebody in a country or a country, everybody says, Oh, those who are imposing sanctions on us, they're at war with us, they're our enemy. So they want to circle the wagons rally around the flag. And that's why the history of sanctions since World War One had been a complete failure there almost no sanctions have ever accomplished their stated objectives. And I, by the way, I was involved in this once with President Trump administration was considering putting financial sanctions on Hong Kong as you remember. And sacred Secretary Pompeo called me one Sunday afternoon says, you know, we're, we're gonna meet on Monday and decide on these financial sanctions against Hong Kong. And I was requested to get your opinion on it. So we talked for about 35 minutes, I was of course, adamantly opposed. Pompeo was adamantly for. And ultimately, the next day, I got a message back from the White House. This basically said, hanky you won. There won't be any there won't be any sanctions on Hong Kong. Anthony Scaramucci 28:20 Well, it was a great move. Thank God, thank God for your contribution, because sometimes these things are reactionary, and they don't really factor in all of the long term consequences. So I, before we go to the audience, Steve Hanke 28:34 By the way, the Hong Kong thing is interesting in the sense that the Hong Kong dollar is issued by the Hong Kong monetary authority, which is a currency board. And, and it trades on a fixed exchange rate of 7.8. Hong Kong for one US dollar, and it's backed 100% with US dollar reserves. So the Hong Kong dollar is is in effect a clone of the US dollar. So if you put sanctions on Hong Kong, what would be financial sanctions, you'd basically be attacking the US dollar. So it would it would have been stupidity, doing the same thing over and over again expecting a different result. It would have been a complete disaster. Anthony Scaramucci 29:17 Well said well said sir. Alright, let's go to let's go to some outside audience questions. One on election year. With an election year on government debt refinancing coming due, can more liquidity keep on powering the stock market in 2024 and beyond? This is from Jay from New York City. Steve Hanke 29:40 Actually, the stock market right right now is not actually being there, there really isn't excess liquidity. So so it isn't kind of illiquidity boom i i think it's it's basically a high tech boom with with In this AI, fad, if you look at the multiples on the stock market in general, it's about 21. And the high tech stuffs about 30 are north of 30. Right. So it's all concentrated that that's what's going on. That's that, you know, it's not abroad broad based thing, due to huge amount of liquidity hanging around. Anthony Scaramucci 30:25 Right. It's interesting, the, the earnings are not bad on certain companies, though, right? I mean, there's these certain tech companies have done very well. If you take out that Magnificent Seven, though, I get your point that the overall market is not doing as well, I guess. Steve Hanke 30:46 Yeah. Anthony, here's the thing. If we look forward, this is the thing. We kind of we're talking about this in various ways, and that is, we've got this kind of optimism and, and kind of, you know, sleepwalking maybe into disaster. Now, when you talk about earnings. Only earnings forecast are going up. But But what happens if the economy is going into recession earnings go down? They don't go up. But but no one, almost no one thinks there's going to be a recession? I do. And I do because the money supply has contracted since July of 2022. That's only happened four times in our history. And every time it happened, we had a recession. So I think the air I think the earnings forecast are, are wildly optimistic point number one. And I also think the multiples are, are high on the high end. So if you if you crank, if you don't slap a multiple of, of 21, on on, on earnings that are forecast to be too high, and put a multiple, it's lower, what do you get? You got lower earnings and a lower moldable. And you got lower stock prices? Anthony Scaramucci 32:10 Yeah, no, it's it's fascinating, because, you know, it's crystal clear what your analysis is. I guess the secondary question, though, is if they they start cutting rates, let's say they cut three times that, you know, over the next year, four times, well, that, you know, reduction in rates, which eases financing, will that help the market. Steve Hanke 32:34 You've got two things going on with the Fed policy, you've got the interest what's going on with the federal funds. And if the federal funds come down, that's not going to hurt the market, if anything is going to help the market. But But opposed to that, and something that is going to continue to drag on the economy is quantitative tightening. And that if that continues, we'll we'll still have an over tight monetary policy. Because monetary policy, whether it's loose or tight, is not determined by the federal funds rate, forget that. It's all about what's going on with the money supply. And if quantitative tightening continues, even if they reduce the Fed funds rate, you will have continued slow slow growth in the money supply. And you'll get certainly no goose out of that. That's for sure. It's dragging now. Remember that the money supply right now is is actually growing at currently, six tenths of a percent year over year, six tenths of a percent year over year Anthony hit their inflation target at 2%. It should be growing at 6%. Right. So that's the point. That's how much of a drag this thing is on on the economy. Anthony Scaramucci 34:02 All right. Let's go to the next question. I mean, it's it's really, really insightful point. Thank you, sir. GM Ford, and Solana should exit the Chinese market as soon as they possibly can. A Bank of America analyst said the other day. And so the question from Michelle from Detroit is how does Detroit stay competitive? Steve Hanke 34:27 This is this is an age old problem. I remember when I was on the Reagan's Council of Economic Advisers in the early 80s. The same question that was being asked, and of course then remember it was the Japanese cars. Yes, exactly. Remember those voluntary restraints the unfortunately, Reagan was forced to do that by elements in the Republican Party protectionist elements in the Republican Party. And I was of course opposed to that, but But it turned out well Let me just walk you through that. What happened that the Japanese said we're not going to send we agree voluntarily, we're not going to send as many cars to the United States, as we have been sending. But what they did, they sent all the high price models with big margins. And Toyota, all a Japanese car companies made out like bandits. And nothing happened in Detroit. I mean, Detroit's been in sickbay for at least 40 or 50 years. Anthony Scaramucci 35:33 so I guess, I guess the question is, they never fully get there anymore, right? There's just too much competition, right? I mean, these cars are okay, but they're not I mean, some of them are okay. But some of them I mean, are just subpar compared to the international competition. Steve Hanke 35:55 Yes, and I, I'm, I'm a unilateral free trader. So I'm all for free trade. That makes life better for everybody. For some people specifically, where the competition is super tough, it's not that good a deal. And so the general population benefits from all the free trade but there are a few groups get squeezed and the few when when they get squeezed, they make a lot of noise in Washington, and even a free trader like Reagan had actually a pretty mixed picture on on free trade. He was much better than than Trump or Biden, no question about that. But still, it wasn't a perfect Reagan esque kind of picture. It was a it was kind of a mixed bag there. There was some good but some bad and and it was the squeaky wheel. Who caused the problem. Understand and squeaky wheel was was who it was Detroit. Anthony Scaramucci 37:06 Yeah. It make sense sir. Let's go to the next question. Bought a starter home a few years back with record housing prices would renovating be a better investment than trying to buy bigger in the next couple of years? This is from Dave from Long Island. Steve Hanke 37:26 Yes, in general, because it, let's say let's say you're in a good luck, you're in a good community, and you want to stay in that community. But your house is not quite up to where you want to be. You want to you want to stay in that house and renovate it. Because number one, it's going to be hard to find another acceptable house in that community number one, and number two, if you get out of your low interest mortgage, you're going to be facing a high interest mortgage if you move so, so that that's just the financing cost switch is something to consider. But realistically, renovation has lots of it's, it's attractive. Anthony Scaramucci 38:15 Well said, and I agree. Let's go to the next one. What impact is the SEC news that a theory will be considered a security have on the crypto market? So I'll take this one is from Jamie from Connecticut, I think that the Aetherium decision by the SEC to approve it is going to take some of the market share away from Bitcoin. And so as you look at a pie chart, if you're going to be a crypto investor, some of that money from a pie chart perspective is going to go into Aetherium. So it marginally helps the overall market but it may weaken Bitcoin, at least in the short term. All right. Well, that was our last question, sir. Any other final thoughts for us before? I know, I mean, I mean, the honestly, I'm really looking for your health and beauty secrets. Okay. Because I did. I did Google you and looked at your Wikipedia page or a fellow Capricorn and I, I got your age and you look about 1518 years younger than you actually are. So I mean, I probably should have asked you who your dermatologist is. Before we ended, you know, and Steve Hanke 39:26 Anthony, you know how to make a guy feel good, I think. The company of Mrs. Hankey and her diet does a pretty good trick. All right. Well, Anthony Scaramucci 39:36 there you go. Okay, so you got to eat right? I think that's, that's probably the best you got to invest right and eat right. Those are probably the two best tips that me and Professor Anki can give you for this coming week and we'll say thank you very much for joining us on speak up. I really do get hoping to get a chance to see you soon. I'm a huge fan of your your work of course and was delighted when you accepted our invitation. Steve Hanke 39:57 Great to be with you. Thank thanks for inviting Great to meet you
