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Strong Dollar Policy: What??
“I believe deeply that it’s very important to the United States, to the economic health of the United States, that we maintain a strong dollar,” U.S. Treasury Secretary Geithner recently told reporters. Indeed, it seems to be a pre-requisite to apply for the position of U.S. Treasury Secretary to be able to utter these words. In the meantime, the greenback seems to be falling further and further; the ‘strong dollar commitment’ appears to have become a farce. Just what, then, would be a strong dollar policy?
Bloomberg Radio asked me last week what I would like to hear from Federal Reserve…
17Nov2009 | Merk Investments | 0 comments | ContinuedWho Cares About the Dollar?
Who cares about the dollar? It turns out quite a few do, except for those who could put it on a course to long-term recovery. First of all, you should care, as the purchasing power of your dollar savings is at risk when the dollar plunges versus other currencies. Let’s examine a couple of groups, what they have at stake and how influential they may be.
Those who care
Savers. That may well be you and me. Though we hear praise about the “recovery” in the equity markets, the dollar index is down more over the past year than the Dow Jones is up.…
Abolishing Risk Destroys America and Your Wealth
Our willingness to engage in risks drives our prosperity. We urgently need a public debate on risk, one driven by reason, not emotion. Without risk, individuals are bound to lose the purchasing power of their savings; corporations that don’t take risk will fade into oblivion; and governments that regulate away risks destroy the growth engine of their nation.
The U.S. is the most prosperous nation because it has embraced risk taking. Silicon Valley has created some of the greatest innovation because it has been a magnet for entrepreneurs. When we evaluate our love-hate relationship with investment banks, let’s not forget…
26Oct2009 | Merk Investments | 0 comments | ContinuedRecognizing a Bubble – Dynamics of Free Money
The government has splattered lots of money onto the economy, working hard to reflate the bubble that got us into trouble in the first place. The Dow is back at 10,000. What are you to do? If you are a wealth sustainer, you should not be drawn into the market simply because it has gone up. Instead, take a step back, look at the market dynamics and see what risks you can afford to take. I am not preaching to hide in a hole awaiting armageddon – there are always opportunities, but they may be very different from what the…
20Oct2009 | Merk Investments | 0 comments | ContinuedJapanese Politics and the Yen
By Axel Merk
www.merkfunds.com
The U.S. dollar has been getting a beating from all sides, but its woes may be far from over – recent developments in Japan, China, Germany and the United Kingdom, not to speak of domestic developments in the U.S., are pointing to a rocky road ahead. Today’s focus is on Japan and, more specifically, how a country on a downward economic spiral can have a strong currency.
Exchange rates are subject to the forces of supply and demand – the flow of funds – of the underlying currencies. While conventional wisdom dictates that a growing economy may attract more…
1Oct2009 | Merk Investments | 0 comments | Continued
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