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Merk: Rather Be in Singapore Dollar Over Euro or U.S.

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  • Description

    Axel Merk of Merk Investments on his outlook for currencies.

  • Duration 3:33
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-- -- -- All right guys or one factor weighing on the US stock market today the Dow is up 74 but it was -- highs 150 points.

A surging US dollar so the Euro falling vs the greenback to levels we haven't seen in about two years now so.

An investment ideas time to short the Euro well my next guest says yeah but not vs the dollar here to explain -- Axel -- president chief investment officer.

At Merck investments Merck.

Axel Merck -- you against the why the dollar because everybody's flooding into an especially today again hasn't seen a few times the -- Say the least.

What part of the reason is because everybody is flooding -- and think about why is the -- we did that two reasons.

What -- the unsustainable budgets in Europe and the other one is the dysfunctional process now.

-- -- -- budgets are high interest rates.

Is a good thing get because Spain can't be spending as much anymore.

In the US interest rates are very low and the Federal Reserve is printing all this money -- congress can keep spending.

I don't think that's a good sign so we -- of -- safe haven weapons are reasonably in order.

It used to be Switzerland but with Switzerland going up all these these controls Singapore dollar place we'd rather be in Singapore and then in the Euro -- in the US.

Singapore.

Are you alone in that trade because I could see people piling on really really quickly I mean you have to get in.

Right now because again that that's for a lot of people you want.

Now we we a long term investor -- that we had to laugh at about two years ago you ma'am I wasn't your program I was taught in favor of the Euro at that time I am I -- these issues have to be expressed in the spreads in the bond market.

None of the -- -- -- in the trinity now the Euro is sold because of the dysfunctional process.

That may change at what time but Singapore.

-- has been on the rise for many yes I'm previously was Wall Street and in London I was trying to get rid of all the businesses -- attractive place to be.

If you want to have a hands off approach prudent monetary policy and -- and a budget that sustainable on the Singapore as one of the few places around the world that that we see a bright spot in.

And and you have many of the advantages but not at a disadvantage is that you have -- -- -- -- I let's talk about the dollar little more you know we -- question last time Axel.

-- -- dollar -- continue to be safe haven for certain investors or is it going to be depressed by a possibly another round of monetary easing so how do you play the dollar which outlook let's just say through the duration of the year.

What we live in a world where everybody is hoping for the best but planning for the worst that means everybody is printing money defend the bank giving -- ECB Bank of Japan.

And everybody says -- we can contain as European fallen out.

But let things get just attack -- -- let -- -- has now must be just not as good as expected and QE3 is gonna be squarely on the table we have an extremely dovish Federal Reserve.

And so with everybody loving the Fed nominee loving Madonna and I'll take life especially because it appears to be the -- safe haven that's around while.

I wouldn't bet my house senate and so we rather invest and manage basket of currencies and and the dollar is is -- is not a part of that.

So real quick silicon is there -- what's the best still waiting to get a basket of currencies.

Well there's many -- I mean for -- -- retail investors we we we managed mutual funds that's one way to do it you can do in the stock market but are most international companies.

Investing.

Trying to south American consumer so that's not the best way to diversify we like the currency markets simply because you actually have less volatility if you don't use leverage even with the data today on a percentage basis the urine doesn't move much the currency market so let's monetize and -- -- directly.

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