Senior Economy Professor says that the stock market “begins to resemble the era of collapse in the thirties”
⚈ Professor Steve Hank warns that the current conditions in the market and trade reflect these depression in the thirties of the twentieth century.
⚈ It cited protectionism, poor monetary policy, and weak leadership as great risks.
⚈ Hank predicts the opportunity of 90 % of the American recession in 2025 without urgent reforms.
Professor Steve Hank, a senior economist in America, warned that the commercial tariffs and the stock market environment began to show similarities with the conditions that led to great depression.
According to Hank, the current economic environment is similar to the early 1930s, when the American economy was affected by a set of monetary and protection policies. mail On April 27.
In particular, he referred to the SMOOOT-HWLEY tariff law, which was announced in 1930 and officially enacted in July of that year.
The customs tariff raised American taxes on thousands of imported goods to protect American industries, but instead led to a global trade war, international trade reduced and deepened economic shrinkage.
“Financial markets began to resemble the era of Smoot-Hawley’s tariff in the 1930s. We have seen this movie before. If the markets don’t change, we will face a lot of trouble.”
Hank indicated that after announcing the Smoot-Hawley tariff, the stock market began to decline, eventually losing 83 % of its value between 1930 and 1932.
The effect of the weak monetary system
He warned that the current market signals, as well as the growing and feverish monetary policy, could determine the way for a similar collapse if no corrective action is taken.
“If we, by the way, and the market, what is going on in the market, it is linked to something.
The Applied Economy Professor at Johns Hopkins University also expressed their concern about the political leadership, indicating that economic advisers reduce the severity of the risks facing financial markets.
Increase the possibility of recession
Hanaki was a voice critic of the commercial tariffs dating back to the Trump era, where he criticized the government for the possibility of stagnation, who is believed to have a 90 % chance in 2025.
The researcher’s concerns with China and the United States accelerated the main players in a continuous trade dispute amid conflicting reports on whether the two sides are about to reach a deal.
Hank has strengthened his warning of stagnation, stressing that the internal economic weaknesses alone can lead to contraction. He warned that the slowdown is inevitable unless there are major transformations in monetary policy.
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