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The U.S. Weak Dollar Policies’ Impact Abroad

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  • Description

    Merk Investments CIO Axel Merk on the impact of Federal Reserve policies overseas.

  • Duration 2:58
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Let's turn here to talk about monetary policy this isn't just -- -- reserve chairman Ben Bernanke is actually out over the weekend was defending the central bank's monetary easing here in the US.

At this criticized.

Sparking a global currency war is this a war of words -- -- actually.

In a currency board joins me now -- ask former president chief investment officer at murky investments and great friend.

Of our show here Axel thanks for joining us I'm we talk so much about the impact of quantitative easing on the domestic economy.

But what's the impacts it in the rest of the world because a lot of -- emerging markets central banks are are very critical of Bernanke.

Calling himself fish for deep faith in the US dollar at the same time urging.

An increased appreciation of other currencies especially markets like Brazil and China.

What -- show and everybody is selfish in a world we call it dealing and on national interest I happen to think and on his policies are wrong but he thinks it's in the interest of the US to pursue it.

I'm QE3 is clearly not a word wall words it's a real war because real money is being printed now it is Fiat money.

But still that is causing inflationary -- -- brought what -- not he's arguing -- that's your problem.

-- about you all the blowing that the problem the second of all if you allow their currencies to appreciate then you would need to deal with it and by the way -- gonna continue doing what we have been doing.

As I -- that's putting everybody else on the defensive.

And then you have to think about what how while the people going to react.

And do you see -- they want to end of the spectrum folks like in the Vietnamese.

Tried to compete with that engage in competitive devaluation.

-- the Chinese that.

Hi able to take a step back take a deep -- And may be the best thing for them is to a lot of -- appreciate because inflation home is just getting OK and significantly.

You've been on the record with me before -- critical Bernanke's policies and so tell me give me an example of what are weak dollar policy means for the rest of the world I automatically think of the deal announced yesterday the Softbank out of Japan by desperate to 70% stake.

So Japan which has its own right.

With its exports because of -- soaring value of the yen this is really deal making making due to be competitive in the global market.

-- and in the short term a weaker dollar helps to boost earnings but that's put -- -- next quarterly earnings report in the medium Tellme that you wrote so competitiveness.

Because for one of the gonna -- assets and the -- -- a position -- friend is just the latest example of that.

How purchasing power more importantly gets eroded that baby who is -- in this quote unquote recovery.

Have been the same us and the young young daughter doesn't get you anywhere anymore and and did what do you do about is what you you've got to diversify through those currencies that need to appreciate.

I mean you can do that some people do it by investing in the stock market but that's extremely volatile and so what we have a Kate is -- why don't you do what the Chinese do spread -- to multiple baskets to a basket of currencies.

And then you can can try to stay ahead and as they had to step ahead and -- -- -- competitive devaluation because not everybody's printing the same money the Chinese company as much money out Italians are not act in the US and clearly taking -- -- yeah.

I gotta cut Chilean breaking his entry well where -- -- Citigroup but shake ups at thank you so much comebacks in with coming.

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