Money Talks: Fixing A Broken Monetary System

Slate Money

Slate Podcasts

Business, Investing

4.1 • 1.1K Ratings

🗓️ 19 August 2025

⏱️ 29 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this Money Talks: Elizabeth Spiers is joined by professors Matt Sekerke and Steve H. Hanke, coauthors of Making Money Work: How to Rewrite the Rules of Our Financial System. They’ll lay out how the money supply in the US is misunderstood and underweighted in monetary policy, how that flawed system contributed to the global financial crisis, and what policymakers can do to fix it all.

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Podcast production by Jessamine Molli and Cheyna Roth.

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Transcript

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0:00.0	Hello and welcome to Money Talks. I'm your host, Elizabeth Spires. I'm the co-host of Slate Money and a contributing writer to the New York Times. And today I'm joined by Matt Sikirke and Steve Hanke, the authors of Making Money Work, How to
0:21.8	Rewrite the Rules of Our Financial System. So guys, introduce yourself. Matt, you first. Thanks.
0:27.7	I'm a fellow at the Johns Hopkins Institute for Applied Economics, where Professor Hankey is the
0:33.0	co-director and founder. And I'm a visiting fellow at Durham University Business School in the
0:38.1	United Kingdom. And Steve? I'm a professor of applied economics at Johns Hopkins University in
0:44.6	Baltimore and a variety of other odds and ends. I'm actually in my 56th year at Johns Hopkins.
0:51.7	Oh, congratulations. I'm the senior man around.
0:56.3	So you two have written a provocative book about the global monetary system and how it
1:01.7	could be reformed.
1:02.5	And we're going to be talking about all of that coming up on Money Talks.
1:22.1	So Steve and Matt, we are taping this in the middle of a broad tariff war and an environment where the dollar is being weakened by the current administration's policies.
1:29.0	And you have just written a book about reforming monetary policy in the U.S. and really rethinking the way that we think about money and in particular the quantity of money. What do you mean by that?
1:32.8	The first thing is most people don't realize that commercial banks produce most of the money
1:38.9	in the economy. Roughly around 80% of the money supply is actually created by commercial banks.
1:46.2	When they make a loan to somebody, they credit the checking account of the recipient of the loan,
1:52.8	and that checking account is counted as part of the money supply, broadly measured.
1:58.2	If you increase substantially, the money supply has occurred in 2020 after the
2:04.6	pandemic hit, what happens? The first thing with a lag that happens is asset prices start going up.
2:12.0	So we saw the stock market go up, real estate prices go up, land values go up. And then next, the real economy
2:20.8	starts churning a little bit more rapidly. And then next, with a lag of maybe 12 to 24 months,
2:27.5	you end up with inflation. And of course, we did have inflation after they goose the money
2:32.8	supply. And we could anticipate that using the
	...

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