Currency and Commodity Trading has been a defining thread in Professor Steve H. Hanke's career. From hedging eggs on the Chicago Mercantile Exchange before he was a teenager in Iowa farm country to predicting the OPEC crash of 1986 and the collapse of oil to below $10/bbl and leading the world's best-performing emerging market fund, Toronto Trust Argentina in Buenos Aires (1995), his work bridges academic economics and hands-on market expertise.
For a summary of Hanke’s big trades:
Early Exposure to Commodity Trading
Professor Hanke grew up in Atlantic, Iowa — the hub of Southwest Iowa, and the heart of American farm country, where commodity markets were not abstract concepts but realities. Grain elevators, livestock auctions, and the rhythms of agricultural cycles shaped his earliest economic intuitions.
As a teenager, he helped his grandfather by selling eggs forward on the Chicago Mercantile Exchange, hedging the price risk while eggs were in storage prior to shipment. This was not theoretical; it was applied economics.
At age 14, Hanke opened his own trading account and began trading soybeans.
Academic Foundations
Hanke's academic career built a rigorous foundation in natural resource economics. He taught the first courses offered in mineral and petroleum economics at the Colorado School of Mines, the world’s top mining school (from 1966, age 24), before joining the Johns Hopkins University. His courses at Hopkins blended applied economics with hands-on lessons in commodity and currency markets. His courses immediately generated waiting lists and were recognized internationally. In 2017, Hanke’s course Applied Economics & Finance was dubbed by Bloomberg as the "gateway to Wall Street" for Hopkins students.
Hanke’s internationally recognized courses at Johns Hopkins have been the subject of numerous media coverage:
Friedberg Mercantile Group
Roles: Chief Economist, Chairman, and Chairman Emeritus
Publication: Commodity and Currency Comments — Friedberg's flagship market letter, which Hanke contributed to throughout his tenure
Current role: Chairman Emeritus, Friedberg Mercantile Group Inc., Toronto
After publishing works on Austrian business cycle theory, Hanke joined the Friedberg Mercantile Group in Toronto, founded by Dr. Albert Friedberg, as Chief Economist, while continuing his professorship at Johns Hopkins. Friedberg is one of Canada's premier commodity trading and investment firms.
One of his most celebrated calls at Friedberg came in 1985, when he analyzed OPEC's internal dynamics and predicted that OPEC would collapse and crude oil would drop below $10 per barrel. Friedberg built large short positions in crude oil and gas oil based on this analysis. The prediction was fully vindicated when oil crashed below $10/barrel in 1986 — one of the most accurate commodity forecasts of the decade.
Hanke also built short positions in Middle Eastern currencies linked to oil revenues, further compounding the trade's success.
Learn more about this and other major trades →
Toronto Trust Argentina
Role: President
Context: Post-1994 Mexican peso crisis (“Tequila Crisis”)
Outcome: World's best-performing emerging market mutual fund in 1995
In the aftermath of the 1994 Mexican peso crisis, financial contagion swept through Latin American markets. Investors feared Argentina's convertibility system would collapse. Markets priced in near-certain devaluation.
Hanke, drawing on his deep knowledge of exchange-rate regimes, concluded that the Argentine system would survive the panic. As President of Toronto Trust Argentina, he aggressively purchased Argentine peso-denominated bonds at distressed prices.
When the feared devaluation never materialized, the fund returned 79.25% in 1995, making it the world's best-performing emerging market mutual fund that year.
Advanced Metallurgical Group N.V.
Roles: Chairman of the Supervisory Board, Senior Advisor
Headquarters: Amsterdam, Netherlands
Hanke served as on the Supervisory Board of Advanced Metallurgical Group N.V. (AMG), headquartered in Amsterdam, for 12 years, the maximum allowed under Dutch corporate governance regulations, retiring as Chairman of the Supervisory Board in 2025. AMG is a global leader in the production of specialty metals, alloys, and metallurgical vacuum furnaces — materials critical to aerospace, energy, and industrial applications. His role reflects his continuing engagement with commodity-related industries at the executive level.
Hanke’s connection with AMG Critical Materials is a connection with Dr. Heinz Schimmelbusch, the firm’s founder and Chairman of the management board. Back in 1994, Dr. Schimmelbusch was the Chairman of Germany’s metallurgical giant Metallgesellschaft (MG). MG had been selling oil and hedging its exposure through an innovative hedge. The hedge became engulfed in a massive controversy in which Nobelist Merton Miller, Christopher Culp, and Hanke came down on the side of Dr. Schimmelbusch and MG. As Hanke said, “Old management was doing a very clever hedging program. It was people on top that did precisely the wrong things.”
Read more about the MG fiasco in Sylvia Nasar’s reportage in the New York Times The Oil-Futures Bloodbath: Is the Bank the Culprit?
Read more on the Hanke-Miller-Culp analysis in the Hanke-Culp article in the International Economy: Derivative Dingbats, July/August 1994
Gold Trading: The Hanke-Cofnas Gold Sentiment Report
The Hanke-Cofnas Gold Sentiment Report
Gold has been part of the international monetary system for centuries. With that in mind, Professor Hanke and veteran trader Abe Cofnas, developed the Hanke-Cofnas Gold Sentiment Report, a proprietary tool that quantifies market sentiment toward gold. It employs artificial intelligence and text-mining algorithms to analyze gold-related news and content from global digital sources in real time.
The system generates an hourly sentiment score on a scale from −10 (extremely bearish) to +10 (extremely bullish). A core trading principle of the report is that extreme sentiment readings (e.g., below −4 or above +8) often precede market reversals, serving as contrarian indicators.
The tool is designed to provide traders with a data-driven gauge of market sentiment, complementing traditional technical and fundamental analysis. It represents the integration of Hanke's macroeconomic expertise with modern AI-driven sentiment analysis.
Key features:
- Real-time hourly sentiment scoring
- Contrarian signal generation at sentiment extremes
- AI-powered analysis of global digital news sources
- Developed in partnership with Abe Cofnas, a recognized expert in binary options and commodity trading
Access the report:
Trading Philosophy
Hanke's approach to markets is fundamental, empirical, and monetarist: if you understand and can accurately measure what is happening to the money supply, you can anticipate changes in asset prices, real economic activity, and inflation.
His prediction of the 1986 oil price crash (below $10/barrel), his profitable management of Toronto Trust Argentina in 1995, and his accurate 2021 prediction of post-COVID inflation all demonstrate the same underlying framework: track the money supply, apply the Quantity Theory of Money, and position accordingly.
As Hanke has argued for five decades, most market surprises are not surprises at all to those who watch the money supply.
Explore This Topic
- Major Trades — The 1985 oil trade, Argentine bonds, Russian ruble prediction, and commodity supercycle
- Gold — Hanke-Cofnas Gold Sentiment Report and gold-backed currency boards
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
- Ideas & Research — Return to the research hub