Currency and Commodity Trading has been a defining thread in Professor Steve H. Hanke's career. From hedging egg shipments on the Chicago Mercantile Exchange as a teenager to advising on global commodity supercycles, his work bridges academic economics and hands-on market experience.
Early Exposure to Commodity Trading
Professor Hanke's involvement in commodity markets began early in life. Growing up in Iowa near livestock and grain markets, he frequently visited the major exchanges in Chicago and Omaha. As a teenager, he helped his grandfather hedge egg shipments by selling egg forwards on the Chicago Mercantile Exchange, and at age fourteen he opened his own trading account to trade soybeans.
After graduating college, he bought and sold a 24-unit apartment building, which shifted his focus toward financial assets. This experience reinforced his preference for financial markets over physical ones.
Academic Foundations
Hanke's academic career built a strong foundation in commodity economics. He began teaching mineral and petroleum economics at the Colorado School of Mines and later developed courses at Johns Hopkins University that blended applied economics with hands-on lessons in commodity and currency markets. Through this work, he trained many students who went on to careers in trading.
Professional Trading Career
After publishing work on business cycles, Hanke joined the Friedberg Mercantile Group in Toronto as chief economist. While remaining a professor at Johns Hopkins, he edited Friedberg's market letter Commodity and Currency Comments. He later served as president of Toronto Trust Argentina in the aftermath of the 1994 Mexican peso crisis.
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Commodity Market Analysis
In his broader analysis of commodity markets, Hanke has argued that the contemporary environment, characterized by high inflation, low inventories leading to backwardation, the global transition from fossil fuels to renewables, and geopolitical shocks such as the war in Ukraine, has created a "perfect cocktail" for a bullish commodity market.
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Explore This Topic
- Trading Career — Friedberg, Toronto Trust Argentina, and AMG
- Major Trades — The 1985 oil trade, French franc short, and Argentine bonds
Related Topics
- Monetarism — The monetary framework behind currency analysis
- Currency Boards — Institutional design for exchange-rate stability
- Dollarization — When countries adopt a foreign currency
- Free Market Economics — The broader economic philosophy