Axel Merk's Blog

Founder, Portfolio Manager
info [at] merkinvestments [dot] com ()

Axel G. Merk is the portfolio manager for the Merk Hard Currency Fund, a no-load mutual fund that provides U.S. investors with exposure to a basket of hard currencies from countries with strong monetary policies to seek protection against the depreciation of the U.S. dollar. He is also founder and president of Merk Investments, an independent investment advisor implementing growth, value, gold and cash strategies. He closely follows trends that affect world markets and watches global currencies with a macroeconomic approach focused on building long-term value for his clients. For more information, go to MerkFund.com.

Dollar Cliff?

As election euphoria settles and the "fiscal cliff" approaches, what are the implications for the dollar? Even as federal deficits may be unsustainable, stocks and bonds are up, and while the dollar may have resumed its long-term downward trend, the greenback has hardly fallen off a cliff.

Is the Yen Doomed?

Because of Japan’s massive public debt burden, pundits have called for the demise of the Japanese yen for years. Are the yen’s fortunes finally changing? Our analysis shows that the days of the yen being perceived as a safe haven may soon be over.

China’s New Leadership: Progressive, Not Conservative

We disagree with media reports that China's new Politburo Standing Committee is dominated by relatively conservative members. What we see is a complete defeat of current President Hu's Chinese Communist Youth League (CCYL) clique and a victory of retired President Jiang's Shanghai clique.

ECB & Fed: Worlds Apart

The contrast in approach to central banking between the U.S. Federal Reserve (Fed) and the European Central Bank (ECB) is remarkable. ECB President Draghi has done more to lift market concerns with a targeted strategy than Bernanke’s blunt attempts.

U.S. of A(sia) - United to Weaken the Dollar?!

Our leaders want a weaker dollar and a stronger Chinese renminbi (RMB). That’s our assessment based on recent comments by President Obama, presidential hopeful Romney and Federal Reserve (Fed) Chair Bernanke.

FOMC In Denial

The FOMC has crossed the Rubicon: our analysis suggests that the Federal Open Market Committee is deliberately ignoring data on both growth and inflation. At best, the FOMC’s intention might have been to not rock the markets two weeks before the election.

Currency Wars: U.S. Attack

Doubling down on QE3, the Federal Reserve (Fed) Chairman Bernanke tells China and Brazil: allow your currencies to appreciate. One does not need to be a rocket scientist to conclude that Bernanke wants the U.S. dollar to fall. Is it merely a war of words, or an actual war? Who is winning the war?

Beyond the Fiscal Cliff: the Dollar At Risk?

Looking beyond the fiscal cliff, we are afraid the greenback may be at risk no matter who wins the election. We examine the risk to the U.S. dollar in the context of the likely policies pursued under either an Obama or Romney administration.

Fight the Inflation Boogeyman

Investors are concerned about inflation. But how can investors attempt to inflation-proof their portfolios? Buy TIPS? Short Treasury bonds? Stocks? Real Estate? Commodities? Gold? Currencies? Or should investors regard those warnings about inflation as fear mongering?

Bernanke Put: Beware of Easy Money

Central bankers around the world may be providing a backstop to the financial markets in much the same way Greenspan did during the “Goldilocks” years, but when the short-term euphoria wears off, will the negative repercussions be even more severe?

U.S. Dollar: Don’t Worry, Be Happy

May we suggest a Twitter version of today's FOMC statement: "Don't worry, be happy!" – No, the economic outlook hasn't improved. In fact, the Fed may want you to take a valium to stomach the ride ahead.

Euro: Looks Like a Duck, Quacks Like a Duck

If it looks like a duck, quacks like a duck, it just might be a duck. We are talking about the euro: it now looks like a currency, acts like a currency, it might as well be yet another currency. The new framework of the European Central Bank (ECB) morphs the euro from a currency of nations to a currency of the United States of Europe.

Bernanke: To Print or Not to Print…?

To print or not to print? Odds are that Fed Chairman Bernanke has been contemplating this question while drafting his upcoming Jackson Hole speech. The one good thing about policy makers worldwide is that they may be fairly predictable.

Gold: Escape from Slavery

Vice President Joe Biden was accused of racism when suggesting a Romney administration would “unchain banks” that in turn might put the black audience he was talking to back into “shackles.”

Ryan: Boon or Bane for U.S. Dollar?

Good news: Vice Presidential candidate Paul Ryan may put the focus of the presidential campaign on the sustainability of the U.S. budget. Bad news: Ryan’s plan delivers some tough medicine; if the European experience is any guide, “austerity” makes bad politics. What are the implications for the U.S. dollar?