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Merk: Global Economy Not Picking Up

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  • Description

    Merk Investments CIO Axel Merk weighs in on the state of the global economy.

  • Duration 3:48
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They call thank you the private sector again adding just a 1191000.

Jobs last month well off the expectation.

And that according day BP is the lowest number we've seen since September of last year.

To -- again Axel -- president chief investment officer at mark investments.

Axel isn't this what Ben Bernanke at the Federal Reserve has been telling us to expect why he's been so worried about the economy is really lackluster growth.

Happy to tighten monetary policy to early.

And the reason he says that is because we continue have have these deflationary forces.

Homeowners would like to -- have to downsize we have this -- -- weighing on the market and if the that takes that put off the gas pedal we crash right back down so he needs to -- on the side of inflation.

And now we see again the glass -- half full today.

And and and we have a couple of these weak numbers and then they'll be very willing to engage in QE3 not quite yet but have another one -- two of -- reports coming week that we can and expect that.

And QE3 will be firmly back on a table.

-- do -- because there is a difference between it and taking your foot off the accelerator and actually giving the car more gas.

So -- -- because the Fed can hold steady but do you truly believe at this point given the numbers -- seen lately has manufacturing.

Was quite nice yesterday we got a nice market rally out of -- do you think we will get additional juice from the fat.

What we have about his domination fed as you can imagine -- -- who actually voting has only one hawk India.

And so at this stage of course we knew the date on on the weak enough for them to do something.

But let there be more weakness in the market.

Everybody is helping put his global recovery somewhere but look at what's happening in Europe again bad -- -- coming out today.

And the US economy was -- a good way that is the attraction when not generating the jobs.

-- some bad news come out from somewhere in Q3 back -- -- table not yet I think it would likely to be on the back on the table but at this stage they cannot justify.

-- some markets have created the US and really gotten the short end of the stick in terms of acknowledgment.

By investors that -- market has done quite well not just in the last year.

But the last five years if you look at like -- EAFE index five year return on it.

Negative annualized.

US markets stand -- and for that to be 500 actually up.

Over a five year period axles that -- -- -- money still going in to foreign markets and still common at a US stock mutual fund.

But.

Because over that same period if you just take -- money out of the dollar in invested in a basket of currencies you would have had to meanwhile return on that much lower rates.

I'm -- printing all this money and and of course yes when -- printing up money asset prices go up -- the eroding the purchasing power of the currency.

And that's the prime the other thing that happens is while we have this economic growth debt continues to pile up.

With just better at putting up that we have better printing money than other countries dot com in the eurozone you have major problems but you have these problems precisely because -- -- -- quite as much money.

And it doesn't mean up what you wanna be the rest of the weather's -- -- everything but as far as cash has come -- The euros on a reasonably well over the last five years -- as the dollar last year with all these problems in the Euro zone the dollar was up about 3% -- -- the Europe that's how good the dollar is when -- such a mess in the rest of the world.

And so yes the opportunities in the -- by all means.

But as long as we used at printing press to try to fix all of our problems -- you can get a lower risk.

And -- -- and in other currencies around the world and and of course them it's it's not risk free by all means.

And if you wanna -- currencies you can really just buy those the bonds of these countries if you well unless you're worried about whether the Gemini Gemini -- but not the Spanish -- -- -- I -- like -- you're worried about is not didn't pay back.

Axel thank you so much acts of mark.

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