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Hanke on money

This week’s EconTalk is Steve Hanke talking about hyperinflation and the US fiscal situation. This was extremely informative. Hanke claims that monetary policy has been too tight as measured by broad measures of the money supply such as M4. So while the Fed has greatly expanded high-powered money, it has not offset the contraction in bank money. And he explains why–restrictive regulations on bank capital which have advantaged US banks relative to European ones but that have led to monetary contraction. Very provocative and maybe true. He faults Bernanke not for quantitative easing but for failing to stop or speak out against the constrictive regulations.