The Munk Debates Podcast - Be it Resolved, The risk of a recession in 2023 is overblown

Starting point is 00:00:01 These statues have to come down. It's always been a pandemic of the unvaccinated. The problem now is it's a pandemic of the willfully unvaccinated. Falling birth rates are good. They're good for our planet. They're good for our societies. We're not responsible for the escalation with Russia. We're not the ones who invaded Ukraine.

Starting point is 00:00:21 I don't think it's fair to portray people of color as victims. It is a very dangerous time in American politics. Hello and welcome to the monk debates on every end. episode, we provide you with a civil and substantive debate on the big issue of the day to arm you, the listener, with enough information to make up your own mind. Today's debate, it resolved. The risk of a recession in 2023 is overblown. A global recession is just around the corner. Stocks ended the day slightly down amid fears of a possible U.S. recession and signs that Federal Reserve is not going to slow down. sharp pace of interest rate increases anytime soon. The Fed's plan could send the United States

Starting point is 00:01:10 into a recession, that word, according to economists from Deutsche Bank. We're trying to do just the right amount, right? We're not trying to have a recession, and we don't think we have to. We think that there's a path for us to be able to bring inflation down while sustaining a strong labor market. Hello, I'm your moderator, Rudyard Griffith. Well, the holiday season is just around the corner, which brings with it cheer, merriment, and a sense of goodwill towards all men and women. But for many families, it also is bringing this year a great deal of financial strain. Perhaps the last 12 months, more than any year in the last decade, has seen all of us subjected to some pretty acute financial stress.

Starting point is 00:01:52 The volatility of the global economy over the last 12 months has reached a fever pitch, with many expecting an even more dire. For the majority of economists and market prognosticators, a recession in the coming 12 months is now all but a foregone conclusion. Inflation, after all, remains stubbornly high. Central banks around the world have pushed to contain the fallout of rising inflation by raising rates at the most rapid rate in a generation. And as money becomes more expensive to borrow, our economies supposedly will inevitably contract. Combine that with continuing fallout of COVID-19, a war in Ukraine, and we're in for some choppy seas in 2023. For these prognosticators, again, the question is not if we're headed for a recession, but how deep and how bad it will be. It's a hurricane. Right now, it's kind of sunny. Things are doing fine.

Starting point is 00:02:55 Everyone thinks the Fed can handle this. That hurricane is right out there down the road coming our way. But other economic experts believe that in spite of the current market turbulence, fundamentals of our economy remain strong. Inflation is abating. Central banks are finally slowing the rate of their interest hikes. And if history is a guide, 2023 could be a bounce back year for the global economy.

Starting point is 00:03:22 Put this all together, and one can argue that the glass. is in fact half full, and the risk of recession is being overblown. On this installment of the Monk debates, we go deep into recession risks in 2023 with our motion, be it resolved. The risk of a recession in the next 12 months is overblown. Arguing for the motion is Dr. Christopher Thornberg, the director of the UC Riverside School of Business Center for Economic Forecasting and Development, and the founder of Beacon Economics. Arguing against the motion. is Steve Hanke, the professor of applied economics at John Hopkins University and a past member of President Ronald Reagan's Council of Economic Advisors. Chris, Steve, welcome to the Monk Debates.

Starting point is 00:04:08 Nice to be here. Great to be with you right here. Chris. Terrific. I'm looking forward to today's conversation. It's what everyone is wondering, 2023, the recession risk, how big, how large, how real. We're going to get into it right now. Christopher, you're arguing in favor of our motion today, be it resolved the risk of a recession in 2023 is overblown. Let's have your two minutes of opening remarks. Well, let me start my opening remarks by kind of flipping the question around a little bit. It's not so much, why aren't we going to

Starting point is 00:04:40 have a recession? My question be, why are we? I mean, look, we know we have an inflationary spell right now created, of course, by too much money printing on the part of the Federal Reserve. But with that in mind, inflation has never caused a recession. It's not, if you will, something that typically causes a recession. Remember that we have inflation right now for the very simple reason that there's excess consumer demand. They packed bank accounts full of cash and people are trying to spend that money and that's driving prices up. Simple as that. And of course, when things re-equalibrate, we should just settle into a normal equilibrium. The only real risk of a recession would come from the Fed continuing to over respond to these inflationary pressures. But the question is, is what is that

Starting point is 00:05:26 breaking point? My guess is it's substantially above a federal funds rate of 4% or even 5%. But beyond that, I just don't see the risks at all. Christopher, thank you for that succinct to the point opening statement. I look forward to unpacking a lot of your arguments and ideas that you put on the table for us. But before we do that, let's hear from Steve. You're arguing against our motion today. let's get your opening statement on why a recession risk could be a real and pertinent danger for the U.S. and North American economy in 2023. Well, to do that, you have to have a model of where or what determines nominal national income or nominal GDP. And I use a monetary model.

Starting point is 00:06:12 Money is what drives the course of the economy, not only inflation, but the real economy. economy. And if you look at what's been going on with the money supply, broadly measured by what they call M2, it's been flat for about 12 months. In fact, the last seven months, it's actually contracted by a percent and a half. Now, that's unprecedented. The last time, we've had this, in 1929, of course, we had a big contraction in the money supply. We also had one in 1937, also had one in 1968. But that's it. They're fairly unusual, and they always result with a lag of about six to 18 months in a pretty good recession. You take the fuel out of the engine and it crashes on you. Thank you, Steve. Great perspective from a monitorist there on why a recession could be a real

Starting point is 00:07:10 probability in 2023. Let's go to rebuttals now. So same opportunity, a couple minutes on the clock. Chris, to react to Steve's opening statement? Well, the reason M2 is falling right now is for the simple reason that it went up so much over the last couple years. Okay, Chris, I'm going to ask you just for the audience who's not as educated as you guys are about economics, what the heck is M2? And can you explain it to us? Sure.

Starting point is 00:07:33 M2 is one of our broad measures of money supply. When we think about, if you will, the functioning of the monetary side of the equation, when you're thinking about price levels, ultimately it all has to do with how much money is floating around out there. Now, what is money? We always think about it, of course, as those bills sitting in our wallet. But there's really a lot more components to that. And I think most economists, even I certainly agree on this, is that M2 is probably one of the most important metrics of money supply. I won't get into all the different elements of M2.

Starting point is 00:08:07 But basically, it's a measure of just pure cash liquidity out there. And Steve's absolutely right. It has fallen a little bit, but, you know, again, it's falling a little bit from one of the greatest increases in M2 we've seen, again, since the 1930s. What the Federal Reserve, what did in response to the pandemic, that is to say, funding $5 trillion of congressional fiscal stimulus was completely unprecedented and candidly completely unnecern. necessary. Then at result of that is most of the money they printed ended up going straight into the money supply and we had about a 40% increase in about a two-year period. Now they are starting some quantitative tightening. That is to say, they're selling a tiny bit of their portfolio off and M2 is coming down a bit. But again, relative to where it was two years ago, it's so high that I don't see how even a little decline, even a lot of decline, would be enough to take the

Starting point is 00:09:13 fought of this particular economy and certainly not this 1% we've seen. Okay, Steve, your opportunity now to react to Chris's opening statement or what you've just heard. The critical thing about the money supply, it is M2. Think of it. It's the money in the hands of the general public. It's basically their firepower that they have. And if you look at the changes in the money supply, that's the critical level. That's a critical level. That's a critical thing to look at, not the level of where the money supply is right now, but you want to look at what's the change is. And we know that changes lead to reactions with lags, and those lags look like this. The first thing that happens when you get a change in the money supply is that

Starting point is 00:10:05 asset prices change, and that is with a lag of about one to nine months. Then with a lag of about six to 18 months, the real economy starts changing. And then the last thing that you get is inflation with a lag of about 12 to 24 months. So that's the transmission mechanism. And when we had COVID start and the monetization of the federal deficit, we did have a huge explosion in the money supply. And as Chris said, it increased in a cumulative way since February of 2,000. 2020 at about 40% increase, a huge increase. The annual average rate of growth in the money supply was about 15% per annum, and the rate of growth in the money supply measured by M2 that would be consistent with 2% inflation is about 6%. So it was growing about three times higher than a rate that would be consistent with hitting the Fed's inflation target.

Starting point is 00:11:11 That's what we had going out of the COVID. Now we're in a change. It's changing again, and we're slowing down. And that slowdown will eventually start transmitting into what? Asset prices. That means the stock market has been stagnant, and I think it will weaken. And it'll weaken because not only interest rates have gone up,

Starting point is 00:11:41 But eventually, when we get into this recession mode, earnings will start coming in a lot lower than the consensus earnings forecast. Right now, the consensus is about 6.5% increase in earnings on aggregate for 2023. I think that's optimistic, and the reason for that is I don't think they've factored in the fact that we'll have, I think, about a 90% chance of a recession next year. Appreciate that, Steve. Okay, let me join the debate here and think up some questions that are top of mind for our audience and come to you first, Christopher. You know, what everything has talked in terms of markets and the economy over the last nine months has been about interest rates. And the rate with which the U.S. Federal Reserve, your central bank, but also our central banking here in Canada, has hiked rates, one of the fastest in the history of either institutions. Why isn't that a, an argument in terms of the U.S. economy being a glass half full, that the effects of these rates, the lag time that monetary policy, monetary interventions do, all of that is going to unfold in 2023 as just higher interest rates reallocate where capital flows in the American economy, in the Canadian economy. And in effect, you're right, inflation doesn't cause recessions.

Starting point is 00:13:10 central banks cause for recessions. Yeah, that I agree with, right? There's never been an expansion that's died of natural causes. They've always been cruelly murdered by the Fed. That's an expression I don't actually completely agree with, but it is a saying in the industry, as the case may be. Well, here's where I come from. I like to start my analysis of where the economy is going.

Starting point is 00:13:32 You know, I like to think of myself more of as a Main Street economist, not a Wall Street economist. And therefore, what I tend to focus on would be, say the components of aggregate demand. In particular, let's talk about the nearly 70% of US GDP called consumer spending. Consumers really do drive to showdown here. And the question is, are the consumers healthy enough to handle the interest rate increases you're talking about? The answer is absolutely.

Starting point is 00:14:01 In fact, consumers in the United States right now are financially about as well off as they have ever been. in fact, probably as well off than ever before, at least in a nominal standpoint, that goes back to the idea of inflation. This is not a real level of wealth. It's fake wealth created by the excessive bottom money printing, and that money is still sitting out there. And in fact, you can even go so far as to say, for all the money they poured into the economy, consumers haven't even had a chance to really spend it. They're still trying. Right now, well, at least as of the middle of the year, which is their most recent statistic, American households are sitting. on, you ready for it? 4.7 trillion dollars in raw cash, five times as much as they had in the middle of 2019. This is an enormous cash reserve that doesn't care about interest rights.

Starting point is 00:14:52 It just doesn't. People have this money. It's burning a hole in their pocket. And that means consumer demand is going to remain strong, even as rates are going up. And remember, American consumers really aren't all that exposed to interest rates. of our debt is mortgage debt, and most of that debt is 30-year fixed rate. The issue here is not interest rates, not for American consumers. For businesses, it's a different kind of conversation. But if the consumer rate remains strong, they can push this economy through a whole

Starting point is 00:15:23 bunch of turbulence that may occur elsewhere in the economy. Interesting, Chris, a lot of the ideas there I've been thinking about, too. So let's go to Steve and get his thoughts on that trifecta. One, you know, you got this huge pile of cash. It's basically, as, as Chris said, it's in people's checking accounts. Jerome Powell has talked about this as one reason he thinks that a, quote, soft landing is a possibility for the U.S. economy. Why isn't there the case to be made here that the glass is, in fact, half full, not half empty? And the chances of recession in 2023 are tail risk. Let me go back to the again the idea of this so-called monitorist model with money driving the economy. It turns out there were only two economists that actually

Starting point is 00:16:13 forecasted what would happen with the huge explosion and the money supply that started in February of 2020. And that was John Greenwood and myself. We wrote an article in July of 2021 using the monitorist model in which we said that the inflation

Starting point is 00:16:36 would be between six and maybe as high as 9%. Well, it did peak out at 9.1% now at 7.7% in the United States. We hit the bullseye with that

Starting point is 00:16:50 model. The model works in short. Using the same model and looking at the changes in the money supply and the lags that we get between those changes in real economic activity, I think we've got a recession baked in the cake for 2023. And we've been talking a lot about interest rates, but remember the old Milton Friedman line, interest rates are very poor indicator of the tenor of monetary policy. You have to look at the money supply. What's going on with

Starting point is 00:17:26 the money supply. And if you look, by the way, at the deposits that we have and adjust those for inflation that we've had so that you get the real change in the value of deposits. They're sinking like a stone, and there's actually a lot of concern about the fact that the real value of not only deposits, which are a big part of the money supply M2. But M2 in general, I said, is shrinking in nominal terms by 1.5% over the last seven months. But if you adjust that for inflation, the real value of M2 is really going down. And when that happens, you almost always have a recession. And consistent with that, we have the leading indicators, the forecasters use.

Starting point is 00:18:25 Those are negative on us. And another big factor that does involve the interest rate is what's called the yield curve. And the yield curve, the short-term interest rates are very much above the longer term, let's say, two-year interest rates. That inversion of the yield curve is usually a pretty good indicator of what's going to happen with the economy. So we've got the money supply, shrinking in nominal terms, which is unprecedented, shrinking in real terms adjusted for inflation, an inverted yield curve, and all the leading indicators pointing negative. Hey, Monk podcast listeners, I wanted to let you know about our other weekly audio program. It's called Friday Focus.

Starting point is 00:19:16 And hey, guess what? It comes out each and every Friday. It's half an hour long. and it provides you with a masterclass on international events, all the big issues and ideas shaping our world. We've got that for you each and every Friday here at the Monk Debates. Simply access via our website, wwww Monkdebates.com. Click on Friday Focus in the top right navigation.

Starting point is 00:19:42 You'll get all the details or check out a sample of the program in the same podcast feed as the main Monk Debates. podcast. I hope you'll join us for the next edition of the Friday Focus podcast. Now back to our program. Steve, in all due respect, maybe I don't have quite the following you do, but I was out there in 2020 talking about inflation as lovely, and I'm happy to send you my old PowerPoints to show otherwise. It wasn't a hard call to see inflation when you have a 40% increase in the money supply. In fact, what's amazing to me is that most economists, weren't acknowledging the same thing.

Starting point is 00:20:22 Whenever Janet Yellen, we know Janet Yellen knows better. And then when she stands up and says inflation is being caused by problems in Ukraine, we know that we have political problems, not economic once, because that's nonsensical. I appreciate where you come from, but you can't just look at the monetary flows on a year-to-year basis to see what's going on. You've got to look at these longer-run balances.

Starting point is 00:20:42 And the reality is there's a phenomenal amount of money still floating around out there. They haven't gone far enough to really stop inflation. But this goes back, I think, to one of my larger points, which is what could cause a recession next year? The Fed. Because really, when you get right down to it, here's the biggest problem. They're going to continue to crank up the federal funds rate. It's not going to stop inflation because it's not having an impact on consumers. Ergo, it's not going to have an impact on the actual pressures that are pushing prices up.

Starting point is 00:21:10 Consumer demands remaining are phenomenally strong. The question is, is does this guy back off? Does he say, look, enough is enough? We're going to let it burn out. or does he just keep cranking it up the way, of course, Volker did back in the day, I think we could all agree if the federal fund rate hits 10%, we're going to have a recession. There's no doubt about it. Great, Steve, because that's where I wanted to go next.

Starting point is 00:21:32 You know, the Federal Reserve here is just such an outsized actor in this debate. And in some ways, it does depend, doesn't it, Steve, on what Jerome Powell decides to do. If he so-called blinks or all this endless talk of pivot, that's kind of gone by the wayside. it's now pause, let's say the dot plot unfolds like we think it will. And we end up with, you know, five and a quarter on the overnight rate and a wait and see attitude by the Fed where they say, you know, we'll hold here for a while and we'll see what happens in 2023. Why isn't that, Steve, a scenario where the so-called soft landing, the avoidance of a recession, becomes the odds on favorite call that you would make just based on the fact that we know the Fed has this dual mandate.

Starting point is 00:22:23 They have to solve also for employment, full employment, not just inflation. And they're not going to be relentless in their quest to crank the Fed funds rate up to a level that would, as Chris rightly said, we hit a point somewhere where a recession simply becomes the de facto outcome of the policy choice made by the Federal Reserve Open Market Committee. Well, the problem, it is the fact that the Fed really is flying blind. They are not, they have not embraced, they've rejected the quantity theory of money, what I'm talking about. They totally and explicitly reject that. They are not looking at the money supply.

Starting point is 00:23:08 They're flying an airplane with an altimeter that does not have the money supply on it. So they've got the joystick in their hand, and they're looking at altimeter that's blank as far as I'm concerned, because interest rates are not the important thing to look at when you're looking at monetary policy. It's the money supply that counts. And what's going on is that they have let the money supply actually contract. It should be growing if they were allowing it to grow. a rate consistent with the Fed's 2% inflation target at about 5% to 6%. It's contracting.

Starting point is 00:23:54 That's why we're, that's why we're in trouble. Just a technical point, Steve, for our listeners, if they could, if you could understand how, how would the, help them understand, how would the Fed contract the money supplies? Is this to do with quantitative tightening? There's several ways that they can do it. One direct way they're doing it right now. they call it quantitative tightening. They're running off the balance sheet of about $90 billion a month,

Starting point is 00:24:22 and that is shrinking. That is, the Fed is not contributing to the growth in the money supply. They're actually taking away, and they're making a negative contribution. That's the Fed. The other contribution comes from commercial banks, and commercial banks could offset the quantitative tightening, by the way. And if that was the case, we would actually have a soft lending. We've had three episodes in the United States in which we've had bank lending,

Starting point is 00:25:00 expanding during periods of time when the federal funds rates actually have doubled. So in the past, we've had three episodes where the feds, as, increased interest rates dramatically, the Fed funds rate, but it really didn't have much effect on the money supply, which of course is Milton Friedman's point, that there's a very fuzzy relationship between changes and interest rates, the Fed funds, and the money supply. And one reason that's so fuzzy is that it's possible

Starting point is 00:25:33 that they could be raising interest rates, and if the economy, everyone was optimistic and the demand for credit was booming. And even at higher interest rates, the banks were loaning money out, the money supply would be increasing, and you'd have a soft landing. That's not happening.

Starting point is 00:25:54 The last three months, actually, commercial banks have cut back on their lending and become stingier. And there is not that optimism in the economy for a boom. So the demand for credit is not that great. And as a result, you've had the Fed with quantitative tightening. They're taking away and not contributing. And the commercial banks now, they are not contributing with increased credit.

Starting point is 00:26:26 They're actually taking away. So you've got kind of a dual squeeze going on with the money supply contracting, contracting, contracting. And with that, you will find that with a lag of 16 to 18 months, you get a contraction in the real economy. And since this has been going on, Rudyard, for about a year, we can expect 2003 to be kind of in the recession zone. The window opens up. So, Chris, let's just, before we go to close the table, talk about a few other features of the economy right now that worry people. One is housing. We are seeing a housing market that has slowed significantly as those much envied here in Canada,

Starting point is 00:27:12 30-year mortgages in the United States get priced up 7, 8%, 8%, depending on what state you live in. Housing is a huge part of our economy, of your economy. Why doesn't that presage a much steeper economic slowdown as we pull the housing GDP multiplier out or certainly ratchen it down to an extent to which the construction industry is affected, consumer home purchases, and people's animal spirits. Isn't that part of what we should be thinking about too, Chris, is the mood of the country. It's pretty dark right now. Every economic survey, the Michigan survey of economic sentiment, you look at these, it is a negative across the board sentiment about what the next 12 to 18 months could hold.

Starting point is 00:28:02 I hear that all the time, negative sentiment and all these dismal headlines. And then, you know, the other day I was out shopping and there were 10 million people around me shopping around me. And the stores are packed and our kickoff to the Christmas season was on fire. And then, you know, so we have these dismal scary statistics. And then what you see actually going on out there is so completely different. Take housing. Housing is a centerpiece of everything. We all know about housing.

Starting point is 00:28:31 But to be clear, let's just say for the sake. of argument. Let's go and say that housing prices drop, oh, I'll say 20% in the United States, okay, over in the next two years. I don't think you're going to drop that far, but let's say they do. Well, guess what? They're still above where they were substantially in 2019. Again, you can't look at any of these trends in isolation. They all have to be metricized against the craziness that happened in 2020 and 2021. Yes, the money size contracting. but only after the largest increase in money supply this nation has ever seen. Yes, home prices are going to fall some, but again, let's think about housing.

Starting point is 00:29:12 What does that mean? Well, it's certainly not going to look like the Great Recession, because the Great Recession wasn't just about home prices falling. It was about the massive buildup of bad debt in our housing market that completely blew up and, of course, almost took down Wall Street with it. There's none of that bad debt this time. Equity levels are on an all-time high level. to equity ratios and an all-time low one.

Starting point is 00:29:35 The problem in housing is going to be, it's going to get cold because not too many people are going to want to sell their house and trade up from a 2.75% mortgage to a 7% mortgage. Steve, before we go to closing statement, it's a final question for you. And it's about what we're seeing in markets, especially as this year closes itself out, real resiliency across stock markets, a rebound in asset values. if we were heading it for a recession, why wouldn't we see asset prices being a predictor that we would see stock indices like the S&P or the Dow Jones, the NASDAQ, falling precipitously as investors rationally would think, hey, my price earning multiples are going to, you know, compress here. This market is overvalued. Yet that's not how investors are behaving.

Starting point is 00:30:26 It's not how indices are behaving. so why isn't that an important tell, important sign that if there is an economic turned down, could be a mild one. At least the market seems to think that. Now, asset prices, there are a lot of asset prices. We were just talking about home prices. Houses are assets. Remember, they boomed in 2020, 2021. When the money supply got goose, asset prices went up with a lag of one to nine months. The stock market boomed. housing prices went up, and now we've got this contraction in the money supply and what's going on. Housing prices are sagging on us, and we're pretty much dead in the water so far with the stock market.

Starting point is 00:31:13 It's just chopping around, not doing very much. So I think also we have commodity prices that are very weak. Sensitive commodity prices are actually very weak. So money supply contracts, sensitive commodity prices are weak, housing prices are weak, the stock market's just chopping around not doing very much. So that's the asset price picture. Now, coming back to what Chris said, now, he's talked a lot about the consumer saving the day. And I'm listening to somebody like Jeff Bezos running Amazon,

Starting point is 00:31:50 and he is in a pessimistic mode. He's actually fired 10,000 workers at Amazon, and they're selling to consumers. He's laying people off because he anticipates a recession. As far as being out of touch, the Fed is so out of touch with the models, these post-Kanesian models that they have. They don't even know the difference between us,

Starting point is 00:32:20 squirrel and a rabbit done at the Fed. I mean, they're completely out of it. As far as the pivot goes, and the possibility of the Fed easing up, I think that is a possibility, not because they're looking at the money supply. They look at the financial markets, and if there's a liquidity crunch on Wall Street, they will pivot immediately like they did in 2019. In 2000, 2019, they were engaged in quantitative tightening. And remember, the repo market froze up on them. And within a day or so, they pivoted and they stopped the quantitative tightening. So I think we could have a liquidity crisis as a result of this contraction in the money supply. And if that occurs, they will pivot and loosen up right away.

Starting point is 00:33:16 Okay, Steve, thanks. Let's go to closing statements. Chris, if you could humor me just to keep the order here, the tennis ball going across the court. Let's go to your closing statement first. I'll give you a little extra time on the clock if you want to respond to what you've just heard to Steve. And then if you can just wrap up and give us a sense of your final arguments, the final points you want to leave this audience with in today's debate. Sure. I mean, look, Jeff Bezos laid off 10,000 people in part because tech in general got ahead of itself over the last couple of years. and they invested in a lot of things they couldn't have.

Starting point is 00:33:52 He's also been selling off as trying to get rid of some of those warehouses he bought and built. And it doesn't seem to matter for the overall market, either for labor or for industrial real estate. We just added, of course, another 280,000 jobs this morning. That's been nonstop job gains. We continue to have unemployment rates below 3%. Worker earnings continue to grow at a 40-year high level. You have an economy that, again, if you're looking, at Wall Street, I think

Starting point is 00:34:21 2023 is going to look like a recession. If you're looking at Main Street, I don't think it will. So I think your focus has to be on, you know, are you looking at the financial markets or are you looking at the real flows of the economy? And on that real flows standpoint, again, I see an economy that's going to continue

Starting point is 00:34:37 to have consumer demand and that's going to push enough business investment to keep this economy moving forward. Not to say we aren't going to have some bumps in the road. You don't take mortgage rates from 2.5% to 7% and not create surprise. problems. But the problems are overcomeable given the fundamental health of our overall economy. Excellent. Thank you, Steve. Okay. Excellent. Thank you, Chris. Okay, Steve, we're going to give you

Starting point is 00:35:00 the last word in our debate today. The motion before the House that we've been considering is, be it resolved, the risk of a recession in 2023 is overblown. Let's get your con view. I think there's a 90% chance that we'll have a recession. in 2020. And the reason for that is that we've had a contraction in the money supply that is preceded the year 2023. And it's all about money and the money supply and the quantity theory of money. Thank you, Steve. Concied to the point. And Christopher, appreciate your wise words in this debate. I don't know. I'm still undecided. I don't know with the glasses, half full or half empty, but I feel like I've learned a lot.

Starting point is 00:35:47 So mission accomplished on behalf of the Monk membership, thank you so much both of you for coming on the program today. Well, that wraps up today's debate. I want to thank our participants, Christopher Thornberg and Steve Hankey. If you have any questions or feedback on what you've just heard, send us an email to podcast at monkdebates.com. Do you think a recession risk is the likely odds-on economic event of 2023?

Starting point is 00:36:13 share your prognostications and ideas with us. And also a reminder that our free complimentary Monk membership is available to you anytime on our website, triple W monkdebates.com forward slash membership. Join our community and get all kinds of great perks and privileges, including early access tickets to our live events, all kinds of amazing content on our website and free samples of our weekly, donor-only current affairs podcast, Friday Focus. Thank you for letting your time and attention to our efforts to bring back the art of public debate one conversation at a time. I'm your host and moderator, Rudyard Griffiths. The Monk Debates are a project of the

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The Munk Debates Podcast - Be it Resolved, The risk of a recession in 2023 is overblown

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