On Friday afternoon, after US equity markets closed, the United States government bought Japanese yen for the first time in twenty-eight years.<br>And every explanation we&#x27;ve seen from the mainstream media looks like fish floundering.<br>So Hedgeye CEO Keith McCullough called the money doctor. Professor Steve Hanke of Johns Hopkins has spent forty years watching governments try to outsmart currency markets, and he does not grade on a curve.<br>&quot;Not only the analysts, but the financial press just have Japan completely wrong, and they&#x27;ve had it wrong for a long time.&quot; — Steve Hanke<br>In a new (hopefully) regular segment, Keith and Steve discuss the topics that Wall Street and its media are missing - or getting dead wrong.

Lunch Break with Keith & Steve | Financial Media Has Japan Dead Wrong

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Well I said it on the macro show, I said I was going to call Steve. Steve is well known by many people who know what they're doing as the money doctor. So if you don't know what the money doctor is, when you want to know about money, you call the doctor. We have a big issue Steve to talk about in Japanese yen intervention, fully loaded US government intervention, we might call it manipulation, we'll get into it, but I figured it'd probably help a lot of people.

If you just explain what's going on, because there's not a lot of truth telling on this one. Oh, there certainly isn't Keith. It's great to be with you. I see you're moving around in the trading floor. I'm down here in Baltimore at Johns Hopkins doing my thing. Anyway, great to be with you.

The thing is, not only the analysts, but the financial press just have Japan completely wrong and they've had it wrong for a long time. And when I say wrong, what's the narrative? The narrative is that Japan has very easy monetary policy. Their monetary policy is easy.

And the reason they say that is because interest rates are relatively low in Japan. But monetary policy is not about interest rates. It's about changes in the money supply. And the money supply has been very anemic for many, many years in Japan. And what is it right now? It's growing. The money supply is growing, M2, at 2.2% per year.

It should be growing. Hankey's golden growth rate based on the quantity theory of money is that it should be growing at about 6% per year, a rate consistent with hitting its 2% inflation target.

Lunch Break with Keith & Steve | Financial Media Has Japan Dead Wrong

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Lunch Break with Keith & Steve | Financial Media Has Japan Dead Wrong

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.