The Financial Crisis Of 2026: Economists Sound Alarm Bells | Hanke & Skousen
Summary
Market Outlook: Expect slow growth with stubborn inflation as money supply accelerates and wealth effects keep consumption elevated.
Precious Metals: Strong secular bull case for gold and silver, with targets up to $6K–$7K for gold and tailwinds from a weaker dollar and diminishing Bitcoin hedge appeal.
AI Infrastructure: Data centers and chip-making are boosting industrial demand for silver, supporting sustained consumption despite potential tech stock volatility.
Uranium/Nuclear: Uranium and nuclear stocks pitched as having better upside than gold/silver, aided by SMR adoption and tight supply dynamics.
Copper: Ongoing infrastructure build and data center growth underpin copper demand; copper equities were highlighted as attractive.
Companies Mentioned: Miners cited as examples of recent strength include Kinross Gold (KGC), Newmont (NEM), and Southern Copper (SCCO).
Risks: Geopolitical tensions (Iran/Hormuz), tariff uncertainty, and potential government shutdowns pose macro risks, while above-ground silver hoarding dynamics could influence supply.
Transcript
To me, that's the financial crisis that's kind of symbolizes the financial crisis of 2026 that could be developing here. >> And the inflation, genie, will never really be put back in the bottle. Now, that that part is actually consistent with what Mark said. >> What is this financial crisis of 2026? What's going to happen to inflation, economic growth, and the stock market? What's going to happen to the gold and silver price after they've just exploded to unprecedented all-time highs? What's going to happen to monetary policy in the US and around the world? And which sectors are likely going to outperform and survive this financial crisis? We're going to find out with our two esteemed guests of the panel that we're hosting today, Mark Scowzen and Steve Hanky. Mark Scousin is the founder and editor of the Scousin Report and Steve Hanky is the professor of applied economics at Johns Hopkins University. This video is sponsored by Koshi. It is a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Sign up and use my code lin in the description down below or scan the QR code here and new users will get $10 when you deposit $100. Traders can put money down on their favorite teams, events, elections, and more in all 50 states, including California and Texas, and over 140 countries. More on that later. I'm pleased to be uh welcoming our two esteemed guests now, Mark and Steve. Welcome to the show. Good to host you both. >> Thank you for having us. >> Pleasure. Let me play uh for both of you this clip of um Howard Lutnik at Davos last week uh talking about his outlook on economic growth. We'll start there. Take a listen and we'll react together. >> I think we're going to grow more than 5% GDP this quarter and that's for the $30 trillion US economy. And if rates were lower, you would see us hit 6%. What is holding us back is ourselves. Okay? We are going to align our our economy and our industrial policy with growth and success and we hope to export that that we were exporting the power of our economy to the rest of the world in one year of change. I just said my expectation is GDP of the United States of America is over 5% in the first quarter of 2026. That's just my opinion. But so far in the first quarter they So when I said I said I thought the United States would grow 4% and the whole world said you got to be kidding me 4.3% in the third quarter. You're going to see plus 5% from the United States of America the $30 trillion economy winning and that >> I'll just stop here. Uh professor Scoutin I want to start with you. You track your own estimate or measure of growth. It's called gross output uh output for the economy. different uh different from GDP, but can you just comment on the Secretary of Commerce LetNick's remarks that you just heard just now? >> Yeah. Uh first of all, let me just mention that uh in 45 for the last 45 years, I've been writing forecasts and strategies and uh I am actually changing publishers. uh when this will come out. I'm now moving over to the Oxford Club and uh this has been a an emotional change in my life after 45 years of writing FNS. But the Oxford Club uh made me a offer that I couldn't refuse and uh even have a signing bonus and uh I'm tripling my subscriber base as a result of moving. So I'm now write the editor of the Scousin report subtitled central intelligence from America's economist and um I I would say uh uh we both I think we've all been kind of surprised by the GDP data. I think we've been pretty accurate on inflation coming down because uh the tight money policy uh has worked in reducing inflation. Um we thought we might see a recession and as a matter of fact we did see slowing down of the economy. If you use my statistic gross output gross output is the top line in national income accounting. It's often ignored by uh government officials unfortunately although the the BEA uh does publish every quarter gross output. And what's interesting is that you're still seeing uh slow growth in and inflation not quite stagflation because we are seeing some growth in business uh activity but it but it's only consumer spending that is uh driving the GDP statistic higher and of course it leaves out the supply chain and the supply chain has been flat for the last year. it really hasn't grown at all in real terms. In nominal terms, yes, but in real terms, it hasn't. So, I I'm more cautious uh than government officials uh on this area. And I do think that uh we have to recognize the job market. Go is much more consistent with this stagnating job market. We can't ignore the fact that new job creation is really flat and that uh Trump's trade war is still wreaking havoc in the supply chain and in the business sector. So those are cautionary tales. I'm still very bullish on the stock market. I'm 100% invested in the markets. Uh and I think gold and silver have uh way outperformed what I was expecting. Uh so there's been a lot of surprises that have gone on so far. I >> I'll come back to the gross output calculation in just a minute. Professor Hanky, I'll give you a chance to respond to uh Howard Lutnik's comments first and then also to uh Professor Scowz's remarks. >> Well, I I think Lutnik is on the delusional side of the spectrum. uh the the potential growth rate in the United States is uh along long-term around two and a half percent per year or something like that. So he's talking about doubling that. So it does fluctuate around the potential. Sometimes it's a little higher, sometimes a little lower, but five to six% is is I think u getting way out ahead of anyone's skis. That's that's a that's a political statement, not not really an analytical statement. So I I'm I'm more with with Scousson in terms of my sense of things. Mark Mark elaborated and I I think one thing that's important to talk about and we should elaborate on it because Mark has been the the big proponent of gross output and and let me just say, well, what is gross output? Well, he as Lutnik said, we've got about a $30 trillion economy. Actually, $31 trillion economy. That that's GDP. That's the value of final goods and services sold in the economy. And that's what's in every textbook. Everybody looks at it all the time, spends all their time looking at it. But gross output is actually 51 trillion. it it it's it's it's about 65% higher than GDP. Now, why is that? What is gross output? Gross output is is looking at all the transactions in the economy that are required before you can get to something called the value the final goods and services sold in the economy or GDP. So it's in in kind of modern lingo what we're talking about in the modern it's it's everything in the supply chain starting from you know when you produce a bushel of corn well where does the corn go how is it processed there's a transaction an initial one and then there's another one and another one and another one and another one and and then eventually you get corn flakes or ethanol or or something you know out of the thing. So, what Mark has been advocating and and I've been supporting Mark in this and writing about it also, but Mark Mark has been literally lobbying for the Bureau of Economic Analysis to include this in their reporting and and now they do actually. So this is this is a very important thing because you get a handle on what's going on under the hood. What what's happening in the economy under the hood and and this comes from something that Mark and Mark and I are both members of the Austrian school of economics. That way of thinking about economics and and why did Mark get into gross output? I actually have thought about this quite a bit. Mark and and that's because he wrote a book a theoretical book taking off and kind of modernizing some of the things that Frederick von Hayak had written and and it's called the structure of production and that structure of production leads that's that's everything in between the start and the finish of producing something. So that's the structure of production. So it's a very theoretical thing. It's in Austrian economics. Most other economists don't understand it. They don't even know it exists. But Mark wrote this pathbreaking book on that. And and then the logical thing is well, how do you measure this? Does anyone actually measure it? And then you get into gross output. And and that's important as I as I say because it gives you some idea of a leading indicator of what's coming down the pike kind of. >> Okay. >> And what's going on before we actually get to GDP? So Mark, what do you have for a measurement on that now? What what is that looking looking like relative to GDP? Lutnik gave us the last quarter report 4.3% growth in GDP. Well, what's going on with go? >> Well, go is in real terms is actually growing at a slower rate because the supply chain is not moving much at all. So, it's less than 3% in real terms. Uh it did go up uh like GDP. But uh anytime uh gross output or GDP is growing faster than gross output that means business is slowing down and in fact in real terms it actually declined again in the third term. It's been declining for about a year in real terms. Go has or not go but B2B business spending and uh while consumer spending is the only thing that's keeping the economy going. And you wonder how long can this disconnect last at some point either business spending has to start catching up to consumer spending which it hasn't done so far. Again we have these lags. It's it's we only have third quarter GDP and and go. Uh but uh it or consumer spending has to peter out and start moving back down equal to business spending. And the jury is really out on that. And of course, both of us were expecting a recession as a result of the tight money policy the Fed had. And it shows you the resilience of our US economy that despite Trump's tariffs and the supply chain disruptions and so forth, uh it seems like there's a lot of money still being spent out there. And I think a lot of it is due to the technological advances of AI. And that's why I think we're entering this era of uh you know, I I have that I have a sense of optimism as well that this could last for some time. Uh you mentioned uh the Fed is engaged in easy money. Well, okay, they've cut interest rates a few times, but the money supply really hasn't grown very much. I know you're an advocate of quantity theory, and so am I, but uh it's not growing like it used to. It's growing at a at a fairly slow rate, suggesting to me that we're probably going to be in this period of uh slow growth and stubborn inflation. That's how I describe it. slow growth and stubborn inflation. And I would also add that more more importantly, we're we're uh we're going to struggle with uh the economy for a while uh with the uncertainty of of these tariffs and uh what's happening in terms of economic growth. I I have some optimism about the technological advance that I think is uh covering a multitude of sins, if you will. And I also think that um things like the Trump accounts, which apparently they're predicting 25 million Americans will uh invest $1,000 each uh in the stock market uh in the S&P 500. that could push things that could push this bubble that you talk about to a higher and higher level. >> Okay. Uh just on that note, Professor Hanky, can you respond to uh Mark's comments on uh M2 money supply growth 4 2% now? 4.3 oh 4.6 now. That's latest meeting. >> Uh it it yeah, let me comment on a couple of things. I'll get to the money supply. I thought I'll just do this in sequence kind of. So the the consumption and and one reason that I think we were a little bit off on our anticipation of a a slowdown in the economy and and a recession was the the wealth effect. This K-shaped economy kind of thing after the CO hit and they goose the money supply of course asset prices exploded and we we ended up with uh the economy of course accelerated and inflation ultimately came into the picture with a lag but but the asset price thing and a wealth effect thing are are tremendous and and it's something that I don't think we anticipated and now I think I understand it at the time I really didn't think it was that important but you've got 20 the top 20% of earners account for 60% of all the consumption in the US economy. And when we look at GDP about 2/3 of the GDP is final consumption. So so that's what's driving consumption. It's this this Kshaped economy. Uh the the the rich have gotten very rich and have have a hell of a lot of money to spend and they're spending it and driving consumption. the little the little guy has been screwed because inflation has eaten away at his at at his real income. Inflation's gone up faster than his wages. And that's why Trump's ratings on the economy are so low. You have a you have a lot of people out there who who have these so-called affordability problems because the the the income increases that they've had, they've gone up more slowly than inflation. So, so you've got this this kind of duality in the economy. They call it a Kshape, you know, the up upward up upward trajectory on the rich and then the downward on the ones that are below the median kind of thing. So that's one thing I think the wealth effect is very is in fact important and and if the stock if Mark's right about the stock market that that will keep fueling consumption because of the wealth effect. the wealthy people that keep spending money and they're the ones that count. The little guy doesn't amount to that much in terms of aggregate consumption. So that's one factor. The now the money supply thing I I have I think a little bit maybe different view than Mark does. The the level the rate of growth year-over-year in the money supply is still below Hanky's golden growth rate of 6% a year. a rate consistent with hitting a 2% inflation target, but it's accelerating. It's going up. And and where is it going? It's going to keep going up. Now, yesterday the Fed did did not change the Fed funds rate, but they have been going down and I think they'll they'll go down probably the next meeting. They'll take it down another 25 basis points. That's kind of a minor thing. The major thing is that the Fed has switched in December from quantitative tightening where they were reducing their impact on the money supply, reducing the size of the balance sheet to what they promised and they have bought $40 billion worth of tea bills with Treasury bills. They're monetizing the deficit just like they were monetizing the deficit after the CO hit. Then they monetized 90% of of all the deficit. The money supply exploded. Asset prices exploded. Real economy went up. Inflation went up. And and now they're they're they're back in the quantitative easing mode again. So that's that happened in December. Now what's going to happen in April is even more significant because about 80% of broad money measured by M2 is account is is generated privately by commercial banks not the Fed. The elephant in the room are commercial banks and and they actually are growing their their loan books at a rate that exceeds 6% right now on an annualized basis. And I think in April the supplemental liquidity ratio will come off and they will have many more reserves, a lot more ammunition and they will accelerate their loan growth. That that might go up to maybe 10% or something like that. So what what does this mean? This means that the money supply is loosening. It's accelerating. I think it will consili continue to accelerate and the inflation genie will never really be put back in the bottle. Now that that part is actually consistent with what Mark said. Mark said we'll probably have a slow economy and and continue having this inflation problem. I I and and that scenario I kind of agree with. The economy is not going to be as hot as everybody thinks and the inflation will be the Achilles heel of Trump because the the inflation's been more or less flatlined. It's the CPI is 2.7%. It's been flatlined for about 6 months, nine months and I think it will probably I think I think it will probably go up, not down. Okay, professor, before we move on, uh I just want to show uh both of you this one statistic here. According to prediction markets, this one's from Koshi. Government shutdown on Saturday. Traders are placing a 74 75% chance of a government shutdown on Saturday. As you know, the Senate is uh Democrats are blocking a funding bill over the recent ICE shootings in Minnesota. But regardless, uh let's suppose we have a government shutdown this weekend. and this will be the second one in a matter of months. Would that have any impact on your gross output uh or even GDP outlook? I'll start with Yeah, go ahead. >> Let me just say we we do have an election coming up. This is going to be another negative on Trump. Th this time the the last government shutdown from in terms of blame, the blame game, it was kind of even between Republicans and Democrats. Everybody was pretty fed up with the whole thing and and the whole bunch of Congress. This time I think the blame will end up residing on the Republican side and be bad news for Trump. I mean ba basically it it it was generated by Minneapolis and and and the problems in Minneapolis although I think you can it's a complicated thing. I mean, one reason they have a problem and one reason the local authorities don't uh uh coordinate and collaborate with the federal authorities is that Minneapolis is a sanctuary city. They they never talk about this. By the way, I don't I don't know why the Republicans don't just say, "Look, it's a sanctuary city. They're not cooperating. they're they're not uh in allowing for the proper enforcement of federal laws and so forth. And so so the whole thing is just spun completely out of control. And and I think with these two shootings, I think the Republicans are going to take the blame for it. >> All right. So So I think it's very negative. >> Let's pass it over to Mark. Uh what do you think about uh this this looming shutdown? How would it impact growth? How would it impact employment >> have never really impacted economic growth uh o overall because it's a short term short-term phenomenon. I think this time it'll be a short-term phenomenon as well. It the stock market never seems to be bothered much by it. Uh I do think that uh ICE created the Trump administration shot themselves in the foot and primarily because ICE isn't just going after the criminal element and deporting them. They're also 44% of all arrests are by on illegal immigrants who have no criminal record whatsoever. So this is what really caused is this extremism on behalf of the uh uh immigration authorities and ICE going after everybody and anybody and breaking up families and stuff like that. It was really a stupid move on be part of Trump kind of like his tariff policies and so forth. He's he's uh he's made a number of mistakes, but nevertheless, uh the unet benefit, I mean, you have the deregulation environment. You got a tax cut going on. Um you have these uh Trump accounts uh for 25 million uh Americans uh that uh you know, that's all uh pretty positive. So, uh I do think um uh that we can kind of ignore the shutdown type of situation. I do think the midterms are going are favoring the Democrats, taking over government again, at least in the House, maybe even in the Senate. Uh so that will stifle uh Trump's ability to make any changes, then he'll be forced to just do executive orders, which he's been largely doing anyway. So uh uh I I I'm uh I have mixed feelings about u all the things that are going on but on net balance it still seems to favor a higher uh slightly higher economic growth rate on in terms of GDP not go but GDP consumer spending still seems to be extremely positive and when that turns then then we're going to have a problem. I should mention historically, you know, Trump is always saying this is this is the greatest recovery. This is the greatest economy ever. Well, in 1983, in Reagan's uh third year, GDP, real GDP went up 8%. So, uh that shows you how how uh a real economic uh recovery can uh can be pretty impressive. >> Well, what's your view on uh what could happen during the midterm elections? I'll start with Professor Hanky first and whether or not that's going to have any impact on fiscal spending and u and trade policies going forward. >> Well, I I think I I'm I happen to be a divided government uh person. The the performance of the government and I've analyzed this very carefully and written about it. The the performance of the government's always better when it's divided. when when the when the Congress is in one party and the White House is in another party, every everything works much better. And um of course the classic one recently in terms of fiscal control and everything was when you had N. Genrich was the speaker of the house and Bill Clinton was the president. That that was a great divided government because you you had two intelligent people dueling it out. And what happened? Remember the last two years of of of Clinton. Of course, he he was a big beneficiary of the peace dividend when when the Soviet Union collapsed. Now we're going into a war cost. We're ramping up. We we we Trump wants to increase this shows you how bad things are. He wants to increase the defense department budget from 1 trillion to 1.5 trillion. Now, that's the the home of waste, fraud, and abuse is the Department of Defense. The biggest department we have in the government. So, this is a complete train wreck coming. And there's another one coming on on a shorter term basis. And that is what we've got an armada going in to start a war with Iran. And and Iran indicates that this time around it's not going to be a 12-day war. They're they're going to fire back heavy heavy duty which means that the Gulf the straight of Hormuz will definitely be closed and and you can see that oil is up WTI is up over $2 a barrel. It's up over $65 a barrel right now and it's been below 60 for quite some time. So, so I I think we have a lot of things going on that that are kind of like Minneapolis. Mark says shooting yourself in the foot. >> Professor Scowz, let me just get your uh outlook on. >> By the way, let me let me just let me I didn't mention that the last two years of Clinton's administration, we actually had where Clinton was running a a surplus. Remember the the big scare then was the bond market was saying, "God, there there not going to be any more bonds. There's not going to be a bond market." So So anyway, I I'm a divided government person. So I I think I think if the government is divided, things will improve in Washington DC. >> Professor Scassin, are you are you concerned about the recent activities in the Middle East? the Armada that Professor Hanky was talking about heading towards Iran, uh, tensions escalating over Iran and also the fear of Europeans and perhaps other countries dumping US treasuries and other US assets over the uh, um, uh, threat of Greenland annexation, but that I think that's in the past. Anyway, are you concerned about the selling of US assets? And generally speaking, as an investor or somebody looking at investment strategies, uh, do recent geopolitical activities, especially in Iran, alter your forecasts? >> Yeah, I see both Trump emphasizing Fortress America, but I also see him as an aggressive uh promoter of uh uh trying to be the peacemaker around the world. and he's using it aggressively going toward the you know he changed the name from defense department to the war department that kind of indicates uh where his mind is look what he did in Venezuela he removed Maduro which I supported but he left the Maduro government in Venezuela and uh I I still think that's going to be a real quagmire uh there's been quite a bit of studies on how Venezuela is very corrupt and the gangs, the drug gangs and so forth in support with the generals and so forth. That's going to be very difficult and Iran would be even more difficult to try to manage that situation. But Trump has such a massive ego that he thinks uh yeah, we can intervene in Iran. Uh we can intervene in the Ukraine. We can intervene uh in uh the Middle East. Uh he's he's he's full full throttle ahead and the military loves it. Of course, the military loves all these new techniques, these new technologies and they're using them. They're delighted that they can try out all of these new ways to uh and you know, they're they're basing it on that very big success in Venezuela. Uh so the president is flexing his muscle is the way I look at it and he's hoping that these countries will back down. Uh I do think that you mentioned also the dollar situation uh Japanese carry trade is a is a major issue. You know, we all know that uh financial crises arise uh with uh relatively small events uh that suddenly explode and make the front page of uh of the newspapers and the Japanese carry trade could be one of those because Japan has this huge debt. They have a huge position in US treasuries as does China. China is uh reducing its uh uh purchase of government securities and they're buying gold right left central banks are buying gold left and right silver I like to point out that uh the silver dollar right here the silver dollar the American Eagle silver dollar now costs a Benjamin in order to buy what is legal tender a silver dollar that was worth $1. It was in our pockets in the 1960s and now you have to pay $100 for a silver dollar. To me, that's the financial crisis. That's kind of symbolizes the financial crisis of 2026 that could be developing here. >> Yes, Professor Hanky, go ahead. >> Well, on on the defense thing, I I'm two things. I I don't think I think the juryy's totally out on Venezuela. I don't know how you could say that we've had success in Venezuela. We we haven't really done anything. We we and and we will just wait and see what how how how that all turns out. uh usually our interventions by the way we have a a long history of regime attempts at regime change and and those have all almost all ended in total disaster and and the thing I'd like to ask Mark is what what Austrian economist what what would Levig von Mesi say about what you just said I think he'd be all over your case about leaning into the defense thing I mean I I know have no Austrian economist who who has been a man of war. They're they're men of peace and cooperation and trade and and and so forth. >> Well, no, Steve, I think you misunderstood what I said. I said that the Trump administration and the military uh you know Marco Rubio and Hess you know these people they all think see this as a incredible success story in terms of a military operation and they are flexing their muscle right now. Now they've left behind u what is appeared to be a disaster because the Maduro regime and the generals they're all still in power. So, I I am not optimistic that they're going to be able to solve this problem. Uh, but I am saying they they feel like they're they're the cat's pajamas now. They are flexing their muscle and they may become more aggressive in Iran and in Venezuela and other places. >> Mark, we we know that. The question is, what does Scousson think about this? They think it's great. They look look at look Nick when he's talking about the growth in the economy. He he he gives a vision. Our vision of the growth rate in the economy is not consistent with his. So my my question is well what about all this international interventionism and attempts at regime change? Because that's what it is. Call it what you what it is. It is regime change. And if you look at Lindsay Auroric's uh book that was published on regime changes by the U Cornell University Press about three or four years ago. She goes through all of these things. I mean there have been over a hundred of them these covert operations that the US is involved in and virtually all of them have been a complete disaster. Well, there are some exceptions and of course Chile is an exception. Uh, Pinocha and the Chicago boys have ultimately altered the uh cultural and economic changes. It took a long time to happen, but Chile is on its way. Now, just recently uh elected a free market conservative uh president. Again, they've gone through different phases of socialism. I'm very optimistic about Malay. I actually think Latin America could be transformational here if indeed Venezuela could uh the Chilean model could be adopted. Now, it's got to be in they've got to be support internally and that's the real question mark. I mean, I lived in V I lived in Venezuela for a year. I was there when it was uh one of the freest wealthiest countries in the world in the late60s. And of course it collapsed gradually and then suddenly uh as uh as they they say uh mainly because Venezuela nationalized its oil. So if they denationalize the oil they it's a tall order. I certainly agree with you uh Steve. It's a tall order. But I am optimistic that co possibly we could we could see the Chilean model being adopt adopted throughout Latin America. We shouldn't just sit back and say, "Well, let's hope it happens." I think we should encourage it. >> Oh, I I I I I I'm all for encouraging the thing. Uh but let me remind you I was President Raphael Caldera's chief economic adviser in 1995 and 1996 and the place was a mess. Why did he call me in? Because the place was a mess. They call the money doctor when things get bad and and they called me in and I >> maybe I should call you in again, Steve. Well, I I am advising the opposition, but you know, the opposition is isn't in power. As as you pointed out, nothing is >> you you you got the you got the same old people in there. And the the elites, by the way, people don't understand the the many of the rich elites support the current regime, >> which is hard to believe considering the poverty, you know, uh, Venezuelans are now f poor. I mean, how can you support Maduro when that's happening? They have to be completely blind. If you're if you're in an elite making a lot of money, you support them, >> right? But 70% of the people in poverty, there's no way they can support them. In fact, they voted against Maduro. The opposition won 70% of the popular vote. So, they need to make another a major change there. And I'm hoping that will happen. >> Well, I I I I hope that I hope they do, too. And uh the it it has considerable potential. Let's put it that way. But the first thing you have to do is is smash something that I measure every day and that's the inflation rate in Venezuela. It's the world world's highest at 742% per year. So, and the only way you can do that is to get rid of the central bank and the boulevard and dollarize the country. >> Dollarization makes sense since oil is their major export and that's quoted in dollars. it makes perfect sense to adopt the currency board approach or just dollarize as you said. Argentina unfortunately hasn't done that. Uh based uh they've they've not followed your advice in that respect. Uh but they're making a lot of progress in Argentina. I'm I'm optimistic there as well. >> I I I think uh the the Achilles heel of Argentina will be the peso. So, I'm not holding my bread breath on Malay being successful. He He hasn't done you. You It's hard to be successful when you win an election promising to deliver something and you never deliver it. He promised to dollarize and there's no way. He's following the standard IMF format which is you usually ends in a river of tears. It it could be the case, Steve, but uh the Argentine stock market is at an all-time high. Malay has balanced the budget. He's done a lot of good things. And uh so I I agree with you. He's got to stabilize the peso. Certainly inflation has come down to 2% per month, but that's still 24% a year. So it it is a problem. But but he's moving in the right direction. moving in the right moving in the right direction. But my experience is and and if you have a fundamental long-term systemic currency problem and you don't fix it, you you're you're going to end up in in in the ditch. And that's that's why I said his Achilles heel. It's fine now. And and of course everybody loves it. They're specul uh you know >> well foreign investments coming back to Argentina too and that's really important that's kind of your in best indicator is what is foreign investment they all left uh during the pedonista era and Malaya is encouraging a lot of foreign investment to come back into Argentina that's another positive sign >> well the the negative sign is my my measurements of capital flight and Argentina ina. It's got one of the largest capital flight ratios in the world. About 70% of what comes in the front door goes out the back door in terms of capital flight. So a lot of that money ends up in Uruguay or New York or Zurich or London or someplace else. So, so this is this is why it's very difficult for Argentina to advance because when I say 70% it's 70 70% of the of the debt incurred by Argentina which is of course the biggest debt debt deadbeat around ends up in capital flight. So so they have a huge capital flight problem. Let's just move on. >> One of the worst in the world. >> Professor Hanky, uh Mark earlier talked about gold and silver uh as as forms of um investment uh potential. Let's just talk about your views on gold and silver and uh whether or not you concur. >> Well, the the secular bull markets are still in place. uh in your program in September uh September 22nd actually uh when gold was about $3,700 an ounce. I I said that I thought it would peak out at 6,000. It it has gone up much more rapidly than I ever anticipated uh back in September when I talked to you. I it it is still going up. it it and you know just uh jump on the bandwagon and join and enjoy the ride. You know, I I think it's going to keep going up and and all of these mixed messages and and concerns that Mark and I have said about Trump. Okay, Mark has emphasized a lot of the positive side. I've emphasized more of the negative side, but you end up with tremendous regime uncertainty with a guy like Trump and and now you you internationally, geopolitically, everyone's pivoting away from from Trump and the US. They they don't like the threats and and and and so you have Prime Minister Mark Carney going to Beijing. Canada pivots away. The EU was just signed an a huge agreement with India which which was a great by the way India should thank Trump for threatening all these tariffs because one of the most protected countries in the world one of the most screwed up countries in terms of trade policy is India and and now what's happened this pivoting of everyone towards China and India and away from the United States in terms of international trade has has actually benefited India because it's given Modi a rationale for getting rid of tariffs. Before he couldn't do that politically, but now he can say, you know, given all this stuff that Trump is doing and threats that Trump is making, we we have to liberalize. We have to start trading with people. And that's just what they're doing. So I think it's a huge benefit for India. >> Mark, do you think with >> and that's a that's a positive view toward Trump in that regard. The silver lining if you will. Uh I do see the dollar is down 10% since Trump took office. I think that's one reason gold and silver have taken off. But I also think there is a difference now because Bitcoin used to be this big competitor as an inflation hedge and seemed to be winning this battle. Gold was floundering. Silver really wasn't going anywhere, but Bitcoin was going through the roof. Now we're seeing that Bitcoin is not the inflation heads that they thought it was. And so where where are speculators going? They're going into gold and silver. Plus you have on top of that especially for silver the tremendous industrial uses of silver with the AI phenomenon and the data centers and the chip making all requires a lot of silver construction as well. The industrial the infrastructure building and stuff like that is great for copper. It's great for silver. It's great for uranium the nuclear. there's a lot of great investment opportunities in this commodity sector and I don't think we've seen the end of that. >> So I I I completely agree with what Mark just said. I'm not even going to add anything to it. I completely agree. >> What do you think is going to happen to the >> and and by the way let me let me this this gets back to go this gets back to gross output all this commodity stuff. The reason I meant I I've always been interested since I was 10 years old, I've been trading commodities. That's because I grew up in Iowa and Iowa. It's it's commodity country, of course, soft commodities, not oil, but or or copper, gold or anything like that, but corn and soybeans and and oats and so forth. So, so, so the commodities are are of interest to me because of that a age 10. That's 73 years ago. I've been I've been trading commodities for 73 years. Now, we're moving. >> Can't be that old. Steve, >> what? >> You can't be that old. >> Yeah. Well, fortunate fortunately, Mark, I'm still alive and kicking. But but at at any rate, the the the key thing is this this the one reason I think that Mark and I are interested and always have been interested in commodities is is this Austrian type of the structure of production and gross output. Everything going on in the supply chain. Well, how how do you start to make a a a bolt? Well, you've got to go to a mine and mine something and that has to be transformed into something else. And finally, you you get a bolt or a screw or whatever it is that you're making. So, all of all of those things are back and and accounted for by gross output. You don't you don't see that in GDP. >> No. In fact, u one of the things that's really interesting is the huge amount of silver in coins and because it used to be uh we used to have the silver standard and people have bags of gold and silver and they're sitting on it. You know, copper is not that kind of situation. Copper is used in industry 100%. Nobody is hoarding copper but they are holding uh hoarding silver in huge amounts bars coins. >> 50 million of these were 50 million of these were minted last year and they aren't even minting them this year by the way. 2026 American Eagle silver dollars are not being minted. Maybe they are in Canada, but the US men has suspended the production of silver and meanwhile it's being uh it's kind of um a disconnect. You know, it's like like Paul Samson used to say about gold. Everybody's digging gold out of the ground and then they put it back into the ground in Fort Knox and that's happening to silver, too. So, I think silver has a potential of moving even higher. >> I do too. By the way, my my friends in Iowa, I still stay in contact with some of my my old pals from Iowa and and they're they at least one of them is as as a big horde of silver and and he actually sent me Mark photos. He's got silver dollars from the tha horde. Have you ever heard of the tha horde? It's one of Kansas. It's one of the one of the biggest hordes and and that uh that silver dollar I can't remember now exactly. I think it's worth over $3,000. >> What what's going to happen uh to tech companies when silver goes even higher from above $100? Are they >> I think you're going to see a lot of melting of the s bags of silver dollars and uh people taking their silverware out and men selling that as well. uh because there has to be more silver available for industrial use instead of being hoarded by uh by gold bugs. >> Yeah. So, so this is happening now. Uh, now my friends in Iowa get get, you know, they get down where the rubber meets the road and and they they deal with the the coin dealers and so forth in in Ames, Iowa and De Moines and and what's happened they they used to if they took their silver in they they they they would the the coin dealer would buy it at a discount. Now they're buying it at a premium. A a and and and if one of my friends went down from Ames w with a bag of silver to the usual dealer that he dealt with. He said they have a restriction that only two people can be in the shop at one time for security purposes. He said there was a queue and there's never been a queue. Never. He said there were 27 people waiting to get into that coin dealer. This this was >> buy or to sell >> both. >> Do you think if the tech companies sell off like software companies sell off that would curb demand for copper and silver? >> Well, it's not whether the stocks will sell off or not because that will happen from time to time. We're already seeing a a a fear that that maybe this tech the demand for uh chip making and and AI is overdone like it was in year 2000 with the dotcom boom. Uh so but it's it's there's a difference between the stock price and the actual demand for these commodities. uh I don't see any reduction in the demand for commodities and this uh data centers and the chip making I mean there there are huge backlogs for orders in this area so I don't see that happening what I see is an increase in the supply available because the prices are so high >> okay uh let's close >> that's true but what the one thing get getting back to the economics of mining and and and recycling. You have to take into account with silver the recycling of course is a big deal. But but the the elasticity of supply is is pretty low. It it it it doesn't just happen like turning a switch on a light. The price goes up and oh you just flip and you you get more supply. It doesn't work that. It doesn't happen that fast. You do get more recycling obviously silver than than than gold. But >> yeah. Well, I'm not talk, Steve. I'm not talking about mining uh uh the actual mining of new silver. I'm talking about the huge uh amount of uh above uh supplies that of silver that those you're going to see a lot of melting down. And I I really think there's going to be a an influx of supply from above ground supplies of of silver. That's what that's where I'm seeing. >> Okay. Well, I I I agree with that. It's happening. That's that's what the the anecdote that I gave you about Ames, Iowa, and De Moines. That that that's getting into that. That's the that's the recycling thing going on. >> Okay. Let's let's uh end on one final question for both of you. your outlook for the gold price for 2026 to cap off the discussion. I think uh Professor Hanky, I'll start with you. You mentioned you mentioned this to me on my prior show. I don't know if you changed your outlook given the recent rally. >> I I'll just stick with my uh secular bull peaking out at 6,000. Now I what I did tell you is that in September 22nd when I did my my arithmetic, my sharp pencil, the number I actually had on the piece of paper was 6,600. I I thought Jesus that's really going way out there. I'm going to round down, not round up. I should have rounded up to 7,000. So let me let me adjust and and say between six and 7,000. All right, Mark, do you have a >> Yeah, in my case, uh, actually a year ago, um, I put out a special alert, uh, a marketing piece called 5,000 gold or gold 5000, I think was the prediction. And nobody believed me. I mean, it was really interesting. That marketing piece bombed and no, nobody believed me. It's kind of like uh in 1981 I sent out a promotion. My very first promotion for my newsletter was uh the financial shock of uh 1981. You open up the envelope and it says regonomics will work. Sell your gold and silver and buy stocks and bonds. It was a very good call, but the marketing bomb. And this is so typical. I'm sure Steve the same thing when you said $6,000 gold. Nobody believed you. And now it's very real. So, I'm over I'm over my prediction of 5,000. I have no idea how how much higher it's going to go. >> Yeah. Well, I I think I'm kind of falling into that camp a bit, Mark. That they you know, you you get this nutty professor label when you when you get out out with a prediction like that, all of a sudden that comes back, oh, what in the hell would this guy know? He's just a professor, you know, and just blow the thing off, you know. Now, now I there was some credibility because because I wasn't that far over Goldman Sachs. >> So, so it wasn't I wasn't on a different planet. Let's put it that way. I was just on the way on the on the upside of the distribution, which you at 5,000, you were way on the upside when you made that thing, too. And so, people >> So, I would just like to add that uh it's not just gold. I actually think uranium and nuclear stocks have a better upside potential because uranium prices are now at approaching n $990 per pound, but they were as high as 120. So I actually think uh if investors are concerned, they should look at uh uranium stocks as a uh more upside potential. We've already seen a tremendous move. I mean hyperbolic for my uh Kin Ross Gold for example, Aino Silver, there's a lot of these stocks out there. Pneumont all of these companies have just gone through the roof and what's the better alternative? I think uranium has a POS and copper as well. I think copper stocks like Southern Copper have a very good chance of making better money now at this point than your gold and silver plays. >> Okay. Uh on the uranium side, I like Mox Mox because these SMS these small uh reactors that they're getting into they they burn a lot of mocks. >> Excellent. Well, I thank you very much, gentlemen, to both of you for lending us your time. Where can we follow your work? Let's start with uh let's start with Mark first. >> Well, I'm now at the Oxford Club. So people go to uh uh scowls and oxford.com they've actually can get a uh a free uh copy of my newsletter at the Oxford Club uh oxfordclub.com. So uh I'll start on Monday uh starting to uh write an investment newsletter and a weekly uh intelligence hotline called the Scousin Report. >> Okay. And uh, Professor Hanky, >> you can follow me on X, Steve_Hanky. >> Okay. Uh, we'll put the links down below. So, please follow Mark and Steve down there. Thank you again, both of you, and we'll speak again soon. Take care for now. >> Thank you. See you, Mark. >> Thank you. >> And thanks for watching. Don't forget to like and subscribe and follow Professor Hanky and Professor Scousin in the links down below. And make sure to use my code lin l i n when you sign up to koshi link down below or scan the QR code here. New users will get $10 when you deposit $100.
The Financial Crisis Of 2026: Economists Sound Alarm Bells | Hanke & Skousen
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Transcript
To me, that's the financial crisis that's kind of symbolizes the financial crisis of 2026 that could be developing here. >> And the inflation, genie, will never really be put back in the bottle. Now, that that part is actually consistent with what Mark said. >> What is this financial crisis of 2026? What's going to happen to inflation, economic growth, and the stock market? What's going to happen to the gold and silver price after they've just exploded to unprecedented all-time highs? What's going to happen to monetary policy in the US and around the world? And which sectors are likely going to outperform and survive this financial crisis? We're going to find out with our two esteemed guests of the panel that we're hosting today, Mark Scowzen and Steve Hanky. Mark Scousin is the founder and editor of the Scousin Report and Steve Hanky is the professor of applied economics at Johns Hopkins University. This video is sponsored by Koshi. It is a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Sign up and use my code lin in the description down below or scan the QR code here and new users will get $10 when you deposit $100. Traders can put money down on their favorite teams, events, elections, and more in all 50 states, including California and Texas, and over 140 countries. More on that later. I'm pleased to be uh welcoming our two esteemed guests now, Mark and Steve. Welcome to the show. Good to host you both. >> Thank you for having us. >> Pleasure. Let me play uh for both of you this clip of um Howard Lutnik at Davos last week uh talking about his outlook on economic growth. We'll start there. Take a listen and we'll react together. >> I think we're going to grow more than 5% GDP this quarter and that's for the $30 trillion US economy. And if rates were lower, you would see us hit 6%. What is holding us back is ourselves. Okay? We are going to align our our economy and our industrial policy with growth and success and we hope to export that that we were exporting the power of our economy to the rest of the world in one year of change. I just said my expectation is GDP of the United States of America is over 5% in the first quarter of 2026. That's just my opinion. But so far in the first quarter they So when I said I said I thought the United States would grow 4% and the whole world said you got to be kidding me 4.3% in the third quarter. You're going to see plus 5% from the United States of America the $30 trillion economy winning and that >> I'll just stop here. Uh professor Scoutin I want to start with you. You track your own estimate or measure of growth. It's called gross output uh output for the economy. different uh different from GDP, but can you just comment on the Secretary of Commerce LetNick's remarks that you just heard just now? >> Yeah. Uh first of all, let me just mention that uh in 45 for the last 45 years, I've been writing forecasts and strategies and uh I am actually changing publishers. uh when this will come out. I'm now moving over to the Oxford Club and uh this has been a an emotional change in my life after 45 years of writing FNS. But the Oxford Club uh made me a offer that I couldn't refuse and uh even have a signing bonus and uh I'm tripling my subscriber base as a result of moving. So I'm now write the editor of the Scousin report subtitled central intelligence from America's economist and um I I would say uh uh we both I think we've all been kind of surprised by the GDP data. I think we've been pretty accurate on inflation coming down because uh the tight money policy uh has worked in reducing inflation. Um we thought we might see a recession and as a matter of fact we did see slowing down of the economy. If you use my statistic gross output gross output is the top line in national income accounting. It's often ignored by uh government officials unfortunately although the the BEA uh does publish every quarter gross output. And what's interesting is that you're still seeing uh slow growth in and inflation not quite stagflation because we are seeing some growth in business uh activity but it but it's only consumer spending that is uh driving the GDP statistic higher and of course it leaves out the supply chain and the supply chain has been flat for the last year. it really hasn't grown at all in real terms. In nominal terms, yes, but in real terms, it hasn't. So, I I'm more cautious uh than government officials uh on this area. And I do think that uh we have to recognize the job market. Go is much more consistent with this stagnating job market. We can't ignore the fact that new job creation is really flat and that uh Trump's trade war is still wreaking havoc in the supply chain and in the business sector. So those are cautionary tales. I'm still very bullish on the stock market. I'm 100% invested in the markets. Uh and I think gold and silver have uh way outperformed what I was expecting. Uh so there's been a lot of surprises that have gone on so far. I >> I'll come back to the gross output calculation in just a minute. Professor Hanky, I'll give you a chance to respond to uh Howard Lutnik's comments first and then also to uh Professor Scowz's remarks. >> Well, I I think Lutnik is on the delusional side of the spectrum. uh the the potential growth rate in the United States is uh along long-term around two and a half percent per year or something like that. So he's talking about doubling that. So it does fluctuate around the potential. Sometimes it's a little higher, sometimes a little lower, but five to six% is is I think u getting way out ahead of anyone's skis. That's that's a that's a political statement, not not really an analytical statement. So I I'm I'm more with with Scousson in terms of my sense of things. Mark Mark elaborated and I I think one thing that's important to talk about and we should elaborate on it because Mark has been the the big proponent of gross output and and let me just say, well, what is gross output? Well, he as Lutnik said, we've got about a $30 trillion economy. Actually, $31 trillion economy. That that's GDP. That's the value of final goods and services sold in the economy. And that's what's in every textbook. Everybody looks at it all the time, spends all their time looking at it. But gross output is actually 51 trillion. it it it's it's it's about 65% higher than GDP. Now, why is that? What is gross output? Gross output is is looking at all the transactions in the economy that are required before you can get to something called the value the final goods and services sold in the economy or GDP. So it's in in kind of modern lingo what we're talking about in the modern it's it's everything in the supply chain starting from you know when you produce a bushel of corn well where does the corn go how is it processed there's a transaction an initial one and then there's another one and another one and another one and another one and and then eventually you get corn flakes or ethanol or or something you know out of the thing. So, what Mark has been advocating and and I've been supporting Mark in this and writing about it also, but Mark Mark has been literally lobbying for the Bureau of Economic Analysis to include this in their reporting and and now they do actually. So this is this is a very important thing because you get a handle on what's going on under the hood. What what's happening in the economy under the hood and and this comes from something that Mark and Mark and I are both members of the Austrian school of economics. That way of thinking about economics and and why did Mark get into gross output? I actually have thought about this quite a bit. Mark and and that's because he wrote a book a theoretical book taking off and kind of modernizing some of the things that Frederick von Hayak had written and and it's called the structure of production and that structure of production leads that's that's everything in between the start and the finish of producing something. So that's the structure of production. So it's a very theoretical thing. It's in Austrian economics. Most other economists don't understand it. They don't even know it exists. But Mark wrote this pathbreaking book on that. And and then the logical thing is well, how do you measure this? Does anyone actually measure it? And then you get into gross output. And and that's important as I as I say because it gives you some idea of a leading indicator of what's coming down the pike kind of. >> Okay. >> And what's going on before we actually get to GDP? So Mark, what do you have for a measurement on that now? What what is that looking looking like relative to GDP? Lutnik gave us the last quarter report 4.3% growth in GDP. Well, what's going on with go? >> Well, go is in real terms is actually growing at a slower rate because the supply chain is not moving much at all. So, it's less than 3% in real terms. Uh it did go up uh like GDP. But uh anytime uh gross output or GDP is growing faster than gross output that means business is slowing down and in fact in real terms it actually declined again in the third term. It's been declining for about a year in real terms. Go has or not go but B2B business spending and uh while consumer spending is the only thing that's keeping the economy going. And you wonder how long can this disconnect last at some point either business spending has to start catching up to consumer spending which it hasn't done so far. Again we have these lags. It's it's we only have third quarter GDP and and go. Uh but uh it or consumer spending has to peter out and start moving back down equal to business spending. And the jury is really out on that. And of course, both of us were expecting a recession as a result of the tight money policy the Fed had. And it shows you the resilience of our US economy that despite Trump's tariffs and the supply chain disruptions and so forth, uh it seems like there's a lot of money still being spent out there. And I think a lot of it is due to the technological advances of AI. And that's why I think we're entering this era of uh you know, I I have that I have a sense of optimism as well that this could last for some time. Uh you mentioned uh the Fed is engaged in easy money. Well, okay, they've cut interest rates a few times, but the money supply really hasn't grown very much. I know you're an advocate of quantity theory, and so am I, but uh it's not growing like it used to. It's growing at a at a fairly slow rate, suggesting to me that we're probably going to be in this period of uh slow growth and stubborn inflation. That's how I describe it. slow growth and stubborn inflation. And I would also add that more more importantly, we're we're uh we're going to struggle with uh the economy for a while uh with the uncertainty of of these tariffs and uh what's happening in terms of economic growth. I I have some optimism about the technological advance that I think is uh covering a multitude of sins, if you will. And I also think that um things like the Trump accounts, which apparently they're predicting 25 million Americans will uh invest $1,000 each uh in the stock market uh in the S&P 500. that could push things that could push this bubble that you talk about to a higher and higher level. >> Okay. Uh just on that note, Professor Hanky, can you respond to uh Mark's comments on uh M2 money supply growth 4 2% now? 4.3 oh 4.6 now. That's latest meeting. >> Uh it it yeah, let me comment on a couple of things. I'll get to the money supply. I thought I'll just do this in sequence kind of. So the the consumption and and one reason that I think we were a little bit off on our anticipation of a a slowdown in the economy and and a recession was the the wealth effect. This K-shaped economy kind of thing after the CO hit and they goose the money supply of course asset prices exploded and we we ended up with uh the economy of course accelerated and inflation ultimately came into the picture with a lag but but the asset price thing and a wealth effect thing are are tremendous and and it's something that I don't think we anticipated and now I think I understand it at the time I really didn't think it was that important but you've got 20 the top 20% of earners account for 60% of all the consumption in the US economy. And when we look at GDP about 2/3 of the GDP is final consumption. So so that's what's driving consumption. It's this this Kshaped economy. Uh the the the rich have gotten very rich and have have a hell of a lot of money to spend and they're spending it and driving consumption. the little the little guy has been screwed because inflation has eaten away at his at at his real income. Inflation's gone up faster than his wages. And that's why Trump's ratings on the economy are so low. You have a you have a lot of people out there who who have these so-called affordability problems because the the the income increases that they've had, they've gone up more slowly than inflation. So, so you've got this this kind of duality in the economy. They call it a Kshape, you know, the up upward up upward trajectory on the rich and then the downward on the ones that are below the median kind of thing. So that's one thing I think the wealth effect is very is in fact important and and if the stock if Mark's right about the stock market that that will keep fueling consumption because of the wealth effect. the wealthy people that keep spending money and they're the ones that count. The little guy doesn't amount to that much in terms of aggregate consumption. So that's one factor. The now the money supply thing I I have I think a little bit maybe different view than Mark does. The the level the rate of growth year-over-year in the money supply is still below Hanky's golden growth rate of 6% a year. a rate consistent with hitting a 2% inflation target, but it's accelerating. It's going up. And and where is it going? It's going to keep going up. Now, yesterday the Fed did did not change the Fed funds rate, but they have been going down and I think they'll they'll go down probably the next meeting. They'll take it down another 25 basis points. That's kind of a minor thing. The major thing is that the Fed has switched in December from quantitative tightening where they were reducing their impact on the money supply, reducing the size of the balance sheet to what they promised and they have bought $40 billion worth of tea bills with Treasury bills. They're monetizing the deficit just like they were monetizing the deficit after the CO hit. Then they monetized 90% of of all the deficit. The money supply exploded. Asset prices exploded. Real economy went up. Inflation went up. And and now they're they're they're back in the quantitative easing mode again. So that's that happened in December. Now what's going to happen in April is even more significant because about 80% of broad money measured by M2 is account is is generated privately by commercial banks not the Fed. The elephant in the room are commercial banks and and they actually are growing their their loan books at a rate that exceeds 6% right now on an annualized basis. And I think in April the supplemental liquidity ratio will come off and they will have many more reserves, a lot more ammunition and they will accelerate their loan growth. That that might go up to maybe 10% or something like that. So what what does this mean? This means that the money supply is loosening. It's accelerating. I think it will consili continue to accelerate and the inflation genie will never really be put back in the bottle. Now that that part is actually consistent with what Mark said. Mark said we'll probably have a slow economy and and continue having this inflation problem. I I and and that scenario I kind of agree with. The economy is not going to be as hot as everybody thinks and the inflation will be the Achilles heel of Trump because the the inflation's been more or less flatlined. It's the CPI is 2.7%. It's been flatlined for about 6 months, nine months and I think it will probably I think I think it will probably go up, not down. Okay, professor, before we move on, uh I just want to show uh both of you this one statistic here. According to prediction markets, this one's from Koshi. Government shutdown on Saturday. Traders are placing a 74 75% chance of a government shutdown on Saturday. As you know, the Senate is uh Democrats are blocking a funding bill over the recent ICE shootings in Minnesota. But regardless, uh let's suppose we have a government shutdown this weekend. and this will be the second one in a matter of months. Would that have any impact on your gross output uh or even GDP outlook? I'll start with Yeah, go ahead. >> Let me just say we we do have an election coming up. This is going to be another negative on Trump. Th this time the the last government shutdown from in terms of blame, the blame game, it was kind of even between Republicans and Democrats. Everybody was pretty fed up with the whole thing and and the whole bunch of Congress. This time I think the blame will end up residing on the Republican side and be bad news for Trump. I mean ba basically it it it was generated by Minneapolis and and and the problems in Minneapolis although I think you can it's a complicated thing. I mean, one reason they have a problem and one reason the local authorities don't uh uh coordinate and collaborate with the federal authorities is that Minneapolis is a sanctuary city. They they never talk about this. By the way, I don't I don't know why the Republicans don't just say, "Look, it's a sanctuary city. They're not cooperating. they're they're not uh in allowing for the proper enforcement of federal laws and so forth. And so so the whole thing is just spun completely out of control. And and I think with these two shootings, I think the Republicans are going to take the blame for it. >> All right. So So I think it's very negative. >> Let's pass it over to Mark. Uh what do you think about uh this this looming shutdown? How would it impact growth? How would it impact employment >> have never really impacted economic growth uh o overall because it's a short term short-term phenomenon. I think this time it'll be a short-term phenomenon as well. It the stock market never seems to be bothered much by it. Uh I do think that uh ICE created the Trump administration shot themselves in the foot and primarily because ICE isn't just going after the criminal element and deporting them. They're also 44% of all arrests are by on illegal immigrants who have no criminal record whatsoever. So this is what really caused is this extremism on behalf of the uh uh immigration authorities and ICE going after everybody and anybody and breaking up families and stuff like that. It was really a stupid move on be part of Trump kind of like his tariff policies and so forth. He's he's uh he's made a number of mistakes, but nevertheless, uh the unet benefit, I mean, you have the deregulation environment. You got a tax cut going on. Um you have these uh Trump accounts uh for 25 million uh Americans uh that uh you know, that's all uh pretty positive. So, uh I do think um uh that we can kind of ignore the shutdown type of situation. I do think the midterms are going are favoring the Democrats, taking over government again, at least in the House, maybe even in the Senate. Uh so that will stifle uh Trump's ability to make any changes, then he'll be forced to just do executive orders, which he's been largely doing anyway. So uh uh I I I'm uh I have mixed feelings about u all the things that are going on but on net balance it still seems to favor a higher uh slightly higher economic growth rate on in terms of GDP not go but GDP consumer spending still seems to be extremely positive and when that turns then then we're going to have a problem. I should mention historically, you know, Trump is always saying this is this is the greatest recovery. This is the greatest economy ever. Well, in 1983, in Reagan's uh third year, GDP, real GDP went up 8%. So, uh that shows you how how uh a real economic uh recovery can uh can be pretty impressive. >> Well, what's your view on uh what could happen during the midterm elections? I'll start with Professor Hanky first and whether or not that's going to have any impact on fiscal spending and u and trade policies going forward. >> Well, I I think I I'm I happen to be a divided government uh person. The the performance of the government and I've analyzed this very carefully and written about it. The the performance of the government's always better when it's divided. when when the when the Congress is in one party and the White House is in another party, every everything works much better. And um of course the classic one recently in terms of fiscal control and everything was when you had N. Genrich was the speaker of the house and Bill Clinton was the president. That that was a great divided government because you you had two intelligent people dueling it out. And what happened? Remember the last two years of of of Clinton. Of course, he he was a big beneficiary of the peace dividend when when the Soviet Union collapsed. Now we're going into a war cost. We're ramping up. We we we Trump wants to increase this shows you how bad things are. He wants to increase the defense department budget from 1 trillion to 1.5 trillion. Now, that's the the home of waste, fraud, and abuse is the Department of Defense. The biggest department we have in the government. So, this is a complete train wreck coming. And there's another one coming on on a shorter term basis. And that is what we've got an armada going in to start a war with Iran. And and Iran indicates that this time around it's not going to be a 12-day war. They're they're going to fire back heavy heavy duty which means that the Gulf the straight of Hormuz will definitely be closed and and you can see that oil is up WTI is up over $2 a barrel. It's up over $65 a barrel right now and it's been below 60 for quite some time. So, so I I think we have a lot of things going on that that are kind of like Minneapolis. Mark says shooting yourself in the foot. >> Professor Scowz, let me just get your uh outlook on. >> By the way, let me let me just let me I didn't mention that the last two years of Clinton's administration, we actually had where Clinton was running a a surplus. Remember the the big scare then was the bond market was saying, "God, there there not going to be any more bonds. There's not going to be a bond market." So So anyway, I I'm a divided government person. So I I think I think if the government is divided, things will improve in Washington DC. >> Professor Scassin, are you are you concerned about the recent activities in the Middle East? the Armada that Professor Hanky was talking about heading towards Iran, uh, tensions escalating over Iran and also the fear of Europeans and perhaps other countries dumping US treasuries and other US assets over the uh, um, uh, threat of Greenland annexation, but that I think that's in the past. Anyway, are you concerned about the selling of US assets? And generally speaking, as an investor or somebody looking at investment strategies, uh, do recent geopolitical activities, especially in Iran, alter your forecasts? >> Yeah, I see both Trump emphasizing Fortress America, but I also see him as an aggressive uh promoter of uh uh trying to be the peacemaker around the world. and he's using it aggressively going toward the you know he changed the name from defense department to the war department that kind of indicates uh where his mind is look what he did in Venezuela he removed Maduro which I supported but he left the Maduro government in Venezuela and uh I I still think that's going to be a real quagmire uh there's been quite a bit of studies on how Venezuela is very corrupt and the gangs, the drug gangs and so forth in support with the generals and so forth. That's going to be very difficult and Iran would be even more difficult to try to manage that situation. But Trump has such a massive ego that he thinks uh yeah, we can intervene in Iran. Uh we can intervene in the Ukraine. We can intervene uh in uh the Middle East. Uh he's he's he's full full throttle ahead and the military loves it. Of course, the military loves all these new techniques, these new technologies and they're using them. They're delighted that they can try out all of these new ways to uh and you know, they're they're basing it on that very big success in Venezuela. Uh so the president is flexing his muscle is the way I look at it and he's hoping that these countries will back down. Uh I do think that you mentioned also the dollar situation uh Japanese carry trade is a is a major issue. You know, we all know that uh financial crises arise uh with uh relatively small events uh that suddenly explode and make the front page of uh of the newspapers and the Japanese carry trade could be one of those because Japan has this huge debt. They have a huge position in US treasuries as does China. China is uh reducing its uh uh purchase of government securities and they're buying gold right left central banks are buying gold left and right silver I like to point out that uh the silver dollar right here the silver dollar the American Eagle silver dollar now costs a Benjamin in order to buy what is legal tender a silver dollar that was worth $1. It was in our pockets in the 1960s and now you have to pay $100 for a silver dollar. To me, that's the financial crisis. That's kind of symbolizes the financial crisis of 2026 that could be developing here. >> Yes, Professor Hanky, go ahead. >> Well, on on the defense thing, I I'm two things. I I don't think I think the juryy's totally out on Venezuela. I don't know how you could say that we've had success in Venezuela. We we haven't really done anything. We we and and we will just wait and see what how how how that all turns out. uh usually our interventions by the way we have a a long history of regime attempts at regime change and and those have all almost all ended in total disaster and and the thing I'd like to ask Mark is what what Austrian economist what what would Levig von Mesi say about what you just said I think he'd be all over your case about leaning into the defense thing I mean I I know have no Austrian economist who who has been a man of war. They're they're men of peace and cooperation and trade and and and so forth. >> Well, no, Steve, I think you misunderstood what I said. I said that the Trump administration and the military uh you know Marco Rubio and Hess you know these people they all think see this as a incredible success story in terms of a military operation and they are flexing their muscle right now. Now they've left behind u what is appeared to be a disaster because the Maduro regime and the generals they're all still in power. So, I I am not optimistic that they're going to be able to solve this problem. Uh, but I am saying they they feel like they're they're the cat's pajamas now. They are flexing their muscle and they may become more aggressive in Iran and in Venezuela and other places. >> Mark, we we know that. The question is, what does Scousson think about this? They think it's great. They look look at look Nick when he's talking about the growth in the economy. He he he gives a vision. Our vision of the growth rate in the economy is not consistent with his. So my my question is well what about all this international interventionism and attempts at regime change? Because that's what it is. Call it what you what it is. It is regime change. And if you look at Lindsay Auroric's uh book that was published on regime changes by the U Cornell University Press about three or four years ago. She goes through all of these things. I mean there have been over a hundred of them these covert operations that the US is involved in and virtually all of them have been a complete disaster. Well, there are some exceptions and of course Chile is an exception. Uh, Pinocha and the Chicago boys have ultimately altered the uh cultural and economic changes. It took a long time to happen, but Chile is on its way. Now, just recently uh elected a free market conservative uh president. Again, they've gone through different phases of socialism. I'm very optimistic about Malay. I actually think Latin America could be transformational here if indeed Venezuela could uh the Chilean model could be adopted. Now, it's got to be in they've got to be support internally and that's the real question mark. I mean, I lived in V I lived in Venezuela for a year. I was there when it was uh one of the freest wealthiest countries in the world in the late60s. And of course it collapsed gradually and then suddenly uh as uh as they they say uh mainly because Venezuela nationalized its oil. So if they denationalize the oil they it's a tall order. I certainly agree with you uh Steve. It's a tall order. But I am optimistic that co possibly we could we could see the Chilean model being adopt adopted throughout Latin America. We shouldn't just sit back and say, "Well, let's hope it happens." I think we should encourage it. >> Oh, I I I I I I'm all for encouraging the thing. Uh but let me remind you I was President Raphael Caldera's chief economic adviser in 1995 and 1996 and the place was a mess. Why did he call me in? Because the place was a mess. They call the money doctor when things get bad and and they called me in and I >> maybe I should call you in again, Steve. Well, I I am advising the opposition, but you know, the opposition is isn't in power. As as you pointed out, nothing is >> you you you got the you got the same old people in there. And the the elites, by the way, people don't understand the the many of the rich elites support the current regime, >> which is hard to believe considering the poverty, you know, uh, Venezuelans are now f poor. I mean, how can you support Maduro when that's happening? They have to be completely blind. If you're if you're in an elite making a lot of money, you support them, >> right? But 70% of the people in poverty, there's no way they can support them. In fact, they voted against Maduro. The opposition won 70% of the popular vote. So, they need to make another a major change there. And I'm hoping that will happen. >> Well, I I I I hope that I hope they do, too. And uh the it it has considerable potential. Let's put it that way. But the first thing you have to do is is smash something that I measure every day and that's the inflation rate in Venezuela. It's the world world's highest at 742% per year. So, and the only way you can do that is to get rid of the central bank and the boulevard and dollarize the country. >> Dollarization makes sense since oil is their major export and that's quoted in dollars. it makes perfect sense to adopt the currency board approach or just dollarize as you said. Argentina unfortunately hasn't done that. Uh based uh they've they've not followed your advice in that respect. Uh but they're making a lot of progress in Argentina. I'm I'm optimistic there as well. >> I I I think uh the the Achilles heel of Argentina will be the peso. So, I'm not holding my bread breath on Malay being successful. He He hasn't done you. You It's hard to be successful when you win an election promising to deliver something and you never deliver it. He promised to dollarize and there's no way. He's following the standard IMF format which is you usually ends in a river of tears. It it could be the case, Steve, but uh the Argentine stock market is at an all-time high. Malay has balanced the budget. He's done a lot of good things. And uh so I I agree with you. He's got to stabilize the peso. Certainly inflation has come down to 2% per month, but that's still 24% a year. So it it is a problem. But but he's moving in the right direction. moving in the right moving in the right direction. But my experience is and and if you have a fundamental long-term systemic currency problem and you don't fix it, you you're you're going to end up in in in the ditch. And that's that's why I said his Achilles heel. It's fine now. And and of course everybody loves it. They're specul uh you know >> well foreign investments coming back to Argentina too and that's really important that's kind of your in best indicator is what is foreign investment they all left uh during the pedonista era and Malaya is encouraging a lot of foreign investment to come back into Argentina that's another positive sign >> well the the negative sign is my my measurements of capital flight and Argentina ina. It's got one of the largest capital flight ratios in the world. About 70% of what comes in the front door goes out the back door in terms of capital flight. So a lot of that money ends up in Uruguay or New York or Zurich or London or someplace else. So, so this is this is why it's very difficult for Argentina to advance because when I say 70% it's 70 70% of the of the debt incurred by Argentina which is of course the biggest debt debt deadbeat around ends up in capital flight. So so they have a huge capital flight problem. Let's just move on. >> One of the worst in the world. >> Professor Hanky, uh Mark earlier talked about gold and silver uh as as forms of um investment uh potential. Let's just talk about your views on gold and silver and uh whether or not you concur. >> Well, the the secular bull markets are still in place. uh in your program in September uh September 22nd actually uh when gold was about $3,700 an ounce. I I said that I thought it would peak out at 6,000. It it has gone up much more rapidly than I ever anticipated uh back in September when I talked to you. I it it is still going up. it it and you know just uh jump on the bandwagon and join and enjoy the ride. You know, I I think it's going to keep going up and and all of these mixed messages and and concerns that Mark and I have said about Trump. Okay, Mark has emphasized a lot of the positive side. I've emphasized more of the negative side, but you end up with tremendous regime uncertainty with a guy like Trump and and now you you internationally, geopolitically, everyone's pivoting away from from Trump and the US. They they don't like the threats and and and and so you have Prime Minister Mark Carney going to Beijing. Canada pivots away. The EU was just signed an a huge agreement with India which which was a great by the way India should thank Trump for threatening all these tariffs because one of the most protected countries in the world one of the most screwed up countries in terms of trade policy is India and and now what's happened this pivoting of everyone towards China and India and away from the United States in terms of international trade has has actually benefited India because it's given Modi a rationale for getting rid of tariffs. Before he couldn't do that politically, but now he can say, you know, given all this stuff that Trump is doing and threats that Trump is making, we we have to liberalize. We have to start trading with people. And that's just what they're doing. So I think it's a huge benefit for India. >> Mark, do you think with >> and that's a that's a positive view toward Trump in that regard. The silver lining if you will. Uh I do see the dollar is down 10% since Trump took office. I think that's one reason gold and silver have taken off. But I also think there is a difference now because Bitcoin used to be this big competitor as an inflation hedge and seemed to be winning this battle. Gold was floundering. Silver really wasn't going anywhere, but Bitcoin was going through the roof. Now we're seeing that Bitcoin is not the inflation heads that they thought it was. And so where where are speculators going? They're going into gold and silver. Plus you have on top of that especially for silver the tremendous industrial uses of silver with the AI phenomenon and the data centers and the chip making all requires a lot of silver construction as well. The industrial the infrastructure building and stuff like that is great for copper. It's great for silver. It's great for uranium the nuclear. there's a lot of great investment opportunities in this commodity sector and I don't think we've seen the end of that. >> So I I I completely agree with what Mark just said. I'm not even going to add anything to it. I completely agree. >> What do you think is going to happen to the >> and and by the way let me let me this this gets back to go this gets back to gross output all this commodity stuff. The reason I meant I I've always been interested since I was 10 years old, I've been trading commodities. That's because I grew up in Iowa and Iowa. It's it's commodity country, of course, soft commodities, not oil, but or or copper, gold or anything like that, but corn and soybeans and and oats and so forth. So, so, so the commodities are are of interest to me because of that a age 10. That's 73 years ago. I've been I've been trading commodities for 73 years. Now, we're moving. >> Can't be that old. Steve, >> what? >> You can't be that old. >> Yeah. Well, fortunate fortunately, Mark, I'm still alive and kicking. But but at at any rate, the the the key thing is this this the one reason I think that Mark and I are interested and always have been interested in commodities is is this Austrian type of the structure of production and gross output. Everything going on in the supply chain. Well, how how do you start to make a a a bolt? Well, you've got to go to a mine and mine something and that has to be transformed into something else. And finally, you you get a bolt or a screw or whatever it is that you're making. So, all of all of those things are back and and accounted for by gross output. You don't you don't see that in GDP. >> No. In fact, u one of the things that's really interesting is the huge amount of silver in coins and because it used to be uh we used to have the silver standard and people have bags of gold and silver and they're sitting on it. You know, copper is not that kind of situation. Copper is used in industry 100%. Nobody is hoarding copper but they are holding uh hoarding silver in huge amounts bars coins. >> 50 million of these were 50 million of these were minted last year and they aren't even minting them this year by the way. 2026 American Eagle silver dollars are not being minted. Maybe they are in Canada, but the US men has suspended the production of silver and meanwhile it's being uh it's kind of um a disconnect. You know, it's like like Paul Samson used to say about gold. Everybody's digging gold out of the ground and then they put it back into the ground in Fort Knox and that's happening to silver, too. So, I think silver has a potential of moving even higher. >> I do too. By the way, my my friends in Iowa, I still stay in contact with some of my my old pals from Iowa and and they're they at least one of them is as as a big horde of silver and and he actually sent me Mark photos. He's got silver dollars from the tha horde. Have you ever heard of the tha horde? It's one of Kansas. It's one of the one of the biggest hordes and and that uh that silver dollar I can't remember now exactly. I think it's worth over $3,000. >> What what's going to happen uh to tech companies when silver goes even higher from above $100? Are they >> I think you're going to see a lot of melting of the s bags of silver dollars and uh people taking their silverware out and men selling that as well. uh because there has to be more silver available for industrial use instead of being hoarded by uh by gold bugs. >> Yeah. So, so this is happening now. Uh, now my friends in Iowa get get, you know, they get down where the rubber meets the road and and they they deal with the the coin dealers and so forth in in Ames, Iowa and De Moines and and what's happened they they used to if they took their silver in they they they they would the the coin dealer would buy it at a discount. Now they're buying it at a premium. A a and and and if one of my friends went down from Ames w with a bag of silver to the usual dealer that he dealt with. He said they have a restriction that only two people can be in the shop at one time for security purposes. He said there was a queue and there's never been a queue. Never. He said there were 27 people waiting to get into that coin dealer. This this was >> buy or to sell >> both. >> Do you think if the tech companies sell off like software companies sell off that would curb demand for copper and silver? >> Well, it's not whether the stocks will sell off or not because that will happen from time to time. We're already seeing a a a fear that that maybe this tech the demand for uh chip making and and AI is overdone like it was in year 2000 with the dotcom boom. Uh so but it's it's there's a difference between the stock price and the actual demand for these commodities. uh I don't see any reduction in the demand for commodities and this uh data centers and the chip making I mean there there are huge backlogs for orders in this area so I don't see that happening what I see is an increase in the supply available because the prices are so high >> okay uh let's close >> that's true but what the one thing get getting back to the economics of mining and and and recycling. You have to take into account with silver the recycling of course is a big deal. But but the the elasticity of supply is is pretty low. It it it it doesn't just happen like turning a switch on a light. The price goes up and oh you just flip and you you get more supply. It doesn't work that. It doesn't happen that fast. You do get more recycling obviously silver than than than gold. But >> yeah. Well, I'm not talk, Steve. I'm not talking about mining uh uh the actual mining of new silver. I'm talking about the huge uh amount of uh above uh supplies that of silver that those you're going to see a lot of melting down. And I I really think there's going to be a an influx of supply from above ground supplies of of silver. That's what that's where I'm seeing. >> Okay. Well, I I I agree with that. It's happening. That's that's what the the anecdote that I gave you about Ames, Iowa, and De Moines. That that that's getting into that. That's the that's the recycling thing going on. >> Okay. Let's let's uh end on one final question for both of you. your outlook for the gold price for 2026 to cap off the discussion. I think uh Professor Hanky, I'll start with you. You mentioned you mentioned this to me on my prior show. I don't know if you changed your outlook given the recent rally. >> I I'll just stick with my uh secular bull peaking out at 6,000. Now I what I did tell you is that in September 22nd when I did my my arithmetic, my sharp pencil, the number I actually had on the piece of paper was 6,600. I I thought Jesus that's really going way out there. I'm going to round down, not round up. I should have rounded up to 7,000. So let me let me adjust and and say between six and 7,000. All right, Mark, do you have a >> Yeah, in my case, uh, actually a year ago, um, I put out a special alert, uh, a marketing piece called 5,000 gold or gold 5000, I think was the prediction. And nobody believed me. I mean, it was really interesting. That marketing piece bombed and no, nobody believed me. It's kind of like uh in 1981 I sent out a promotion. My very first promotion for my newsletter was uh the financial shock of uh 1981. You open up the envelope and it says regonomics will work. Sell your gold and silver and buy stocks and bonds. It was a very good call, but the marketing bomb. And this is so typical. I'm sure Steve the same thing when you said $6,000 gold. Nobody believed you. And now it's very real. So, I'm over I'm over my prediction of 5,000. I have no idea how how much higher it's going to go. >> Yeah. Well, I I think I'm kind of falling into that camp a bit, Mark. That they you know, you you get this nutty professor label when you when you get out out with a prediction like that, all of a sudden that comes back, oh, what in the hell would this guy know? He's just a professor, you know, and just blow the thing off, you know. Now, now I there was some credibility because because I wasn't that far over Goldman Sachs. >> So, so it wasn't I wasn't on a different planet. Let's put it that way. I was just on the way on the on the upside of the distribution, which you at 5,000, you were way on the upside when you made that thing, too. And so, people >> So, I would just like to add that uh it's not just gold. I actually think uranium and nuclear stocks have a better upside potential because uranium prices are now at approaching n $990 per pound, but they were as high as 120. So I actually think uh if investors are concerned, they should look at uh uranium stocks as a uh more upside potential. We've already seen a tremendous move. I mean hyperbolic for my uh Kin Ross Gold for example, Aino Silver, there's a lot of these stocks out there. Pneumont all of these companies have just gone through the roof and what's the better alternative? I think uranium has a POS and copper as well. I think copper stocks like Southern Copper have a very good chance of making better money now at this point than your gold and silver plays. >> Okay. Uh on the uranium side, I like Mox Mox because these SMS these small uh reactors that they're getting into they they burn a lot of mocks. >> Excellent. Well, I thank you very much, gentlemen, to both of you for lending us your time. Where can we follow your work? Let's start with uh let's start with Mark first. >> Well, I'm now at the Oxford Club. So people go to uh uh scowls and oxford.com they've actually can get a uh a free uh copy of my newsletter at the Oxford Club uh oxfordclub.com. So uh I'll start on Monday uh starting to uh write an investment newsletter and a weekly uh intelligence hotline called the Scousin Report. >> Okay. And uh, Professor Hanky, >> you can follow me on X, Steve_Hanky. >> Okay. Uh, we'll put the links down below. So, please follow Mark and Steve down there. Thank you again, both of you, and we'll speak again soon. Take care for now. >> Thank you. See you, Mark. >> Thank you. >> And thanks for watching. Don't forget to like and subscribe and follow Professor Hanky and Professor Scousin in the links down below. And make sure to use my code lin l i n when you sign up to koshi link down below or scan the QR code here. New users will get $10 when you deposit $100.