Could the next financial crisis send stocks down 40% — and leave Washington with few tools to stop the damage? Economist Steve Hanke joins Maggie Lake to explain why he sees a “non-trivial” risk building beneath today’s markets. Hanke warns that extraordinary investment, rising credit exposure and stretched valuations could create widespread collateral damage if the current boom unwinds. He also explains why the U.S. may have little fiscal or monetary room to respond, why he expects the bond bear market to continue, why the 10-year Treasury yield could remain above 5%, and why the Federal Reserve may still be forced to keep rates higher. And when Maggie asks where investors can hide, Hanke gives a remarkably direct answer: for additional liquidity, he says he would favor money market funds over putting new money into stocks. In this conversation: • Why Hanke sees a growing risk of financial crisis • The scenario that could produce a 40% broad-market decline • Why he believes much of the current investment boom is malinvestment • How deficits and debt have reduced Washington’s “margin of safety” • Why inflation could keep the Fed trapped • Risks inside private credit and the banking system • Why the bond bear market may not be over • Why Hanke thinks the 10-year Treasury could stay above 5% • Where he would put additional liquidity today Steve Hanke says a bubble unwind could hit the broader market by roughly 40% — and that he’d put additional liquidity in money market funds, not stocks. If that makes you question whether your portfolio has enough margin of safety, our complimentary portfolio review can help you stress-test your allocation. 👉 https://bit.ly/4e9LsJV Subscribe to Wealthion for conversations with leading investors, economists and market strategists — and learn how to understand the world and invest accordingly. #SteveHanke #StockMarket #FinancialCrisis #FederalReserve #Investing Connect with us online: Website: https://www.wealthion.com Spotify Podcast: https://open.spotify.com/show/4wCAfhgUdspxeMqyi6KZkb Apple Podcast: https://podcasts.apple.com/us/podcast/wealthion-be-financially-resilient/id1566889716 X: https://www.x.com/wealthion Instagram: https://www.instagram.com/wealthionofficial/ LinkedIn: https://www.linkedin.com/company/wealthion/ Facebook: https://www.facebook.com/Wealthion/ ________________________________________________________________________ IMPORTANT NOTE: The information, opinions, and insights expressed by our guests and our hosts do not necessarily reflect the views of Wealthion or the views of their respective employers. They are intended to provide a diverse perspective on the economy, investing, and other relevant topics to enrich your understanding of these complex fields.   While we value and appreciate the insights shared by our esteemed guests and hosts, they are to be viewed as personal opinions and not as investment advice or recommendations from Wealthion or their respective employers. These opinions should not replace your own due diligence or the advice of a professional financial advisor.   We strongly encourage all of our audience members to seek out the guidance of a financial advisor who can provide advice based on your individual circumstances and financial goals. Wealthion has a distinguished network of advisors who are available to guide you on your financial journey. However, should you choose to seek guidance elsewhere, we respect and support your decision to do so.   The world of finance and investment is intricate and diverse. It's our mission at Wealthion to provide you with a variety of insights and perspectives to help you navigate it more effectively. We thank you for your understanding and your trust.