http://www.fxstreet.com/fundamental/market-view/merk-insights/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/market-view/merk-insights/2012-02-02.htmlWhich political party will do a better job at preserving the purchasing power of the U.S. Dollar? A common tenet amongst Treasury Secretaries, irrespective of their political affiliation, has been a claim that the U.S. pursues a strong dollar policy. To find out, let’s look at what type of tax and regulatory policies foster a strong dollar. Supply and demand determine the value of anything tradable, including a currency. Noteworthy with regard to the value of a currency is a country’s currentThu, 02 Feb 2012 14:03:07 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2012-02-02.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2012-01-18.htmlWith the Year of the Dragon around the corner, will the renminbi be unshackled? Will there be a surge in domestic consumption, or will a housing bust weigh on the economy, dragging down global economic growth? To understand how dynamics may play out in China, try to put yourself into the shoes of the proverbial Chinese consumer. Better yet, put yourself into hundreds of millions of such shoes… First, let’s put the Chinese housing market into perspective. High-net-worth individuals own, onWed, 18 Jan 2012 12:16:54 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2012-01-18.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2012-01-16.htmlECB President Mario Draghi continued to impress with his very direct style during the European Central Bank’s (ECB) first press conference of the year. While not lowering interest rates or announcing further easing measures, he made it clear that the ECB is “ready to act” should the environment deteriorate. Our takeaways: Draghi increased pressure on policy makers: key facets in resolving the crisis are national governments, euro area governance, as well as financial stability. DraghiMon, 16 Jan 2012 09:55:48 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2012-01-16.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2012-01-09.htmlSwiss National Bank (SNB) President Philipp Hildebrand finds himself in the hot seat. SNB rules prohibit his family from trading based on non-public monetary and foreign exchange intentions of the SNB (c.f. §4). His wife netted a 60,000 Swiss franc profit buying, then selling U.S. dollars, all within a month; her husband’s intervention in the currency market was mostly responsible for the gain. Arguably, she traded to make a profit, publicly explaining, “what motivated me to buy dollars was theMon, 09 Jan 2012 09:40:33 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2012-01-09.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2012-01-05.htmlIn 2012, policy makers around the world may be driven by the realization that the theme of 2011 was not a Euro-specific crisis, but simply another stage in a global financial crisis. Central bankers may ramp up their printing presses in an effort to limit “contagion” concerns. As such, the currency markets may be the purest way to take a view on the “mania” of policy makers. Market movements may continue to be largely driven by political rhetoric, rather than company earnings announcements orThu, 05 Jan 2012 12:52:25 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2012-01-05.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-12-15.htmlIntroduction In 2012, China is poised to undergo a significant change in the official leadership structure of its country. Given that China maintains centralized government control over much of the country, even a marginal change in leadership composition may have deep and far reaching implications for the economy and investors globally. This report is aimed at analyzing the key implications from a global investor’s standpoint. In the wake of its leadership transition, current and expectedThu, 15 Dec 2011 11:51:51 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-12-15.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-12-01.htmlCan the euro be saved? Is it possible to stem the flight of money from the periphery into the core? With a botched German auction in mind, investors are now wondering whether it’s possible to prevent a flight out of “all things euro”? We examine the dual challenges of fiscal sustainability and bank solvency in this analysis, with the not-so-modest title “Guide to Save the Euro”. Fiscal sustainability Fiscal sustainability is about revenue and expenses, but also about perception. As the housingThu, 01 Dec 2011 09:40:29 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-12-01.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-11-22.htmlThe worst-case scenario for Greece, should it be unable to secure further bailouts, might be that it would have to live within its means. Presently, spending only the money coming in is considered unbearably brutal. If Greece could only leave the euro, it could install its own printing press, inflating its sorrows away. Any economist will object: it’s complicated. But it isn’t: Greece could introduce a high-flying New Drachma, quite literally. First, please note that any country may default onTue, 22 Nov 2011 11:45:47 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-11-22.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-31.htmlThe markets appear euphoric about the ability for European policy makers to deliver on new promises. Low market expectations were met. We, too, have a positive takeaway, but only because of one detail of the grand plan; actually, let’s call it a “grand sketch,” as many details are still unknown. The Good Just as the U.S. bailout fund “TARP” was used to bolster U.S. banks as opposed to buying toxic securities in the market, the most effective tool to bolster confidence in the Eurozone is toMon, 31 Oct 2011 09:59:19 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-31.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-20.htmlOn its face, suggesting that the Occupy Wall Street movement may threaten the U.S. dollar may appear like a tall order. However, simply dismissing Occupy Wall Street as a fad may be a big mistake, just as it is a mistake to dismiss the Tea Party movement. Regardless of your political stance, and with no offense intended to supporters of either group, we believe they may be two sides of the same coin – quite literally. To determine where policy makers and with it, the U.S. dollar, may beThu, 20 Oct 2011 08:39:47 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-20.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-19.htmlWith so many global dynamics playing out, and the world’s financial markets fixated on the political process (or lack thereof) in the Eurozone, driving market sentiment around the world, it may be a good time to take a deep breath, take a look back at where we’ve come from, and assess the likely implications going forward. Specifically, what are the implications for the U.S. dollar and currencies globally? Firstly, let’s look at what we’ve done this year. We made a number of macro investmentWed, 19 Oct 2011 13:54:58 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-19.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-17.htmlTo ensure the European sovereign debt crisis doesn’t go to waste, the markets have kept policy makers and bankers on their toes. The naysayers of a European turnaround have become so overwhelming that it is stunning Europe hasn’t submerged into the Atlantic Ocean yet. It appears that German Chancellor Angela Merkel, the cautious woman with the checkbook, is about to turn the tide. First off, Greece would likely default, possibly within weeks, if it were not for the efforts being made toMon, 17 Oct 2011 08:07:31 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-17.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-05.htmlIs Operation Twist a failure? The stock market plunged in disappointment when it was announced. Keynesians are tearing their hair out in frustration, as it appears the Fed failed to ramp up the printing press. Free marketers are disgusted by the blatant manipulation of the yield curve. A number of Federal Reserve (Fed) President Bernanke’s colleagues dissented and/or are voicing public opposition. However, as the dust settles, it appears there is a method to the twist: Bernanke may have a plan…Wed, 05 Oct 2011 08:40:44 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-10-05.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-09-22.htmlIn 2008, the global financial system faced a potential meltdown when funding seized up for investment banks, ultimately leading to the failure of Lehmann Brothers. Three years on, we have got plenty of problems, but – as we shall argue - investors may want to differentiate between a financial meltdown and insolvency. While complaining about policy makers and bankers may generate animated water cooler discussions, let’s take their human (and fallible) nature as a given, and discuss implicationsThu, 22 Sep 2011 08:45:10 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-09-22.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-09-13.htmlGiven that many know Merk Investments as "euro bulls", arguing that the euro can thrive despite all the turmoil in the Eurozone, we wanted to share with our investors and the public that in our hard currency strategy, currently with over $700 million in assets, we sold over U.S. $90 million worth of euros late Thursday to re-allocate to the Australian dollar. This re-allocation was an acceleration of a recent trend to deploy euro holdings elsewhere. The strategy is now underweight in euros.Tue, 13 Sep 2011 09:07:53 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-09-13.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-08-25.htmlA key reason for recent market turmoil may be the long overdue untangling of important debt-driven interdependencies between the U.S. and Europe. In our analysis, not only has the Federal Reserve’s (Fed’s) ultra-low monetary policy taken away any incentive to engage in meaningful reform in the U.S., but the easy money also spilled far beyond U.S. shores, providing European banks with hundreds of billions of reasons not to shore up their capital bases. With volatility riding high, investorsThu, 25 Aug 2011 08:36:44 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-08-25.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-08-10.v02.htmlMy most recent Merk commentary , published July 25, was motivated by the possibility of an impasse on the federal debt ceiling. Now that President Obama has signed a bill raising the ceiling, I am motivated to write once again. Standard and Poor’s has registered its concern by lowering its long-term sovereign credit rating on the United States from AAA to AA+. Now that the early August debt-ceiling issue is out of the way, everyone should understand that the country is only temporarily savedWed, 10 Aug 2011 10:05:44 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-08-10.v02.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-27.htmlAs I write early Monday morning, it appears that the federal government is at the brink of default. The Republicans and Democrats have laid out irreconcilable positions on taxes. President Obama has said that he will not sign a bill that does not have some increases in tax rates on upper-income taxpayers. Republicans have said that they will not accept legislation that provides for such increases. In the negotiations, there has apparently been some progress in identifying spending cuts bothWed, 27 Jul 2011 07:56:05 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-27.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-25.htmlToday’s debate may be focused on whether the debt ceiling will be raised, but it’s tomorrow’s debate that really concerns us. Last week, Standard & Poors made it clear that raising the debt ceiling would be one thing, but in order to withhold a downgrade to the U.S. credit rating, the U.S. must show that it is not “maxed out.” In other words, show that it would be able to manage another crisis, or a potential war. What would be the implications of a credit downgrade? And what policiesMon, 25 Jul 2011 07:57:31 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-25.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-14.htmlFederal Reserve (Fed) Chairman Bernanke, in a verbal duel with Representative Ron Paul, provided insult to injury to hard money appreciating investors. When asked whether gold should be considered money, Bernanke replied: “no”; when further quizzed why central banks then hold gold reserves, Bernanke brushed the question off, suggesting gold is simply held because of tradition. This occurred after Bernanke claimed that Fed policy has been profitable, as manifested by the billions in profitsThu, 14 Jul 2011 07:06:12 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-14.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-13.htmlThere is panic in the markets: reviving memories of the peak of the financial crisis, investors have recently appeared less concerned about the return on their money, rather focusing on the return of their money. In what is a hallmark of grave investor concern, investors are paying for the privilege of lending money to the U.S. government: the yield on one and three month Treasury bills has been flirting again with negative yields. What’s the panic about? In our analysis, it’s the market’sWed, 13 Jul 2011 08:21:31 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-13.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-08.htmlWe were one of few who defended the euro when many pundits predicted parity to the U.S. dollar in the spring of 2010, when Greece’s issues first came to the fore. Since then, Old Europe’s currency has had a dramatic comeback, although not without significant jitters along the way. A roadmap is playing out that may lead the euro to debunk the dollar. Not convinced? Let’s look at what is and what isn’t working on both sides of the Atlantic, and how dynamics may play out. If one thing has beenFri, 08 Jul 2011 07:48:48 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-07-08.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-06-22.htmlWhich one is safer: the euro or the U.S. dollar? Before jumping to a conclusion one way or the other, let’s look at different sides of the respective coins. We have been warning for years that there may be no such thing anymore as a safe asset and investors may want to take a diversified approach to something as mundane as cash. We believe Greece has rather serious issues, but concerned investors may want to take a closer look at their dollar holdings for potential “contagion” risks. Let usWed, 22 Jun 2011 07:45:45 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-06-22.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-06-10.htmlGet ready for more money to be printed – this time not to subsidize an overly indebted American consumer, but to stem against the credit destruction caused by the Federal Reserve (Fed) itself. Tuesday evening at the International Monetary Conference in Atlanta, J.P. Morgan CEO Jamie Dimon gave a laundry list of changes that have already incurred in the banking system, including No more Special Investment Vehicles (SIVs) No more sub-prime, no more “Alt-A” mortgages No more CDOs HigherFri, 10 Jun 2011 07:53:59 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-06-10.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-05-24.htmlU.S. Treasury Secretary Geithner has warned that delays in extending the U.S. debt ceiling may cause irreparable harm. While borrowing costs for the U.S. government have not yet risen, irreparable harm may have already been done to the U.S. dollar and its status as a reserve currency. Ironically, it’s not a plunging, but a rallying bond market that is a symptom of the problem. Let us explain. First, no one really knows how the markets will behave should the U.S. delay servicing its debt. MostTue, 24 May 2011 10:41:29 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-05-24.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-05-23.htmlDisagreements on how to address Greece's reform process boiled over this week when European Central Bank (ECB) President Trichet walked out of a meeting. Trichet warned if Greece were to extend the maturity of existing debt, the ECB would stop supporting Greece. We have long argued that it is not in Greece's interest to default at this stage because Greece needs to get its primary deficit under control before restricting its debt. As further reforms are implemented, the risk/reward ratio forMon, 23 May 2011 06:29:37 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-05-23.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-05-06.htmlAfter raising interest rates by 0.25% a month ago, the European Central Bank (ECB) left interest rates unchanged at today's meeting of its Governing Council. The press conference that followed was held in Helsinki; Finland just elected a new government that may block the aid package put together for Portugal. Adjusting to the Nordic spirit of not wasting time with small talk, ECB head Trichet was very much to the point with his answers: "Nothing New, Nothing Special." Trichet's succinctFri, 06 May 2011 06:42:50 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-05-06.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-05-03.htmlIt’s payback time for Ben Bernanke, the chairman of the Federal Reserve (Fed). In some ways, this should neither surprise, nor scare anyone. Unfortunately, however, it might do both. In any open market, information is absorbed rather quickly into asset prices, including exchange rates. Indeed, exchange rates may be the best pricing source to assess the impact of the relentless involvement of policy makers’ “print and spend” mentality in the markets. When trillions are spent, markets are likelyTue, 03 May 2011 11:01:11 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-05-03.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-04-28.htmlToday, the Federal Reserve Open Market Committee (FOMC) announced it will continue to purchase government securities as previously announced ("QE2"), including reinvesting principal payments from its holdings. The FOMC downgraded its economic growth forecast, acknowledged inflationary pressures have moved from commodity inflation to core inflation, yet insists inflation remains too low. The Fed considers inflationary pressures to be transitory, but monitors the evolution of inflation andThu, 28 Apr 2011 06:52:40 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-04-28.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-04-14.htmlWe believe that continued U.S. dollar weakness may be a consequence of the diverging monetary approaches central banks are taking around the globe. While many international central banks have been on a tightening path, raising rates (i.e. central banks of: Australia, Brazil, Canada, China, India, Norway, Sweden, to name but a few), the U.S. Federal Reserve (Fed) has been conspicuous in its continued easing monetary policy stance. Indeed, while other central banks have been shrinking the sizeThu, 14 Apr 2011 12:08:51 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-04-14.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-04-07.htmlToday, the European Central Bank (ECB) raised its main refinancing rate by 0.25% to 1.25%. ECB President Trichet has long argued that its monetary policy is independent of the "extraordinary measures" put in place to support the financial system. However, it was only earlier this year that the market took Trichet's suggestions that he may raise rates seriously, even as the sovereign debt crisis remains unresolved. The role of a central bank is to take away the punch bowl when necessary, toThu, 07 Apr 2011 14:42:25 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-04-07.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-04-05.htmlShould investors be concerned that a weaker U.S. dollar causes inflation? The price at the gas pump should be a stark reminder that a weaker dollar may contribute to higher prices. Yet, economists tell us that food and energy inflation does not count. Why do economists have such a baffling sense of logic? Are economists really aliens in disguise, locked up in ivory towers? Let’s shed some light on the logic and why it may not merely be strange, but wrong. First off, we are talking about theTue, 05 Apr 2011 10:39:50 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-04-05.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-03-15.htmlDespite the Fed recently surpassing China as the largest owner of U.S. government debt, the U.S. remains heavily reliant on foreigners to fund the government’s ongoing fiscal largess. Geithner’s Treasury Department has firmly focused new issues at the mid to longer end of the yield curve (since Geithner assumed office, the average length of marketable Treasury debt held publicly has increased by nearly one year). Despite the Treasury taking advantage of the ultra-low interest rate and fundingTue, 15 Mar 2011 11:31:12 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-03-15.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-03-04.htmlThe U.S. Federal Reserve (Fed) and the European Central Bank (ECB) are divided by a common goal: price stability. Fed Chairman Bernanke has made it clear in his recent testimony and speeches that the Fed would react should food and commodity inflation lead to an increase in core inflation. Let's spell this out: the Fed is ready to R E A C T. We are not aware of any central bank that is proud of reacting, but rather acting preemptively to mitigate inflationary concerns; naturally, a centralFri, 04 Mar 2011 09:32:57 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-03-04.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-03-01.htmlFrom earthquakes in New Zealand to revolutions in the Middle East, natural and man-made disasters are rocking the world. We are all too often made to believe that in times of crisis there’s a flight to the U.S. dollar. However, the U.S. dollar has instead had a rocky ride of its own thus allowing the crisis-ridden Eurozone to shine. What’s going on? Is there no crisis, or has the U.S. dollar lost its appeal as a safe haven? Over longer periods there is little correlation between the U.S.Tue, 01 Mar 2011 13:37:28 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-03-01.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-02-16.htmlIn arguing food inflation is not the Federal Reserve’s (Fed’s) fault, Fed Chairman Bernanke points the finger at everyone but him. Just as with a lot of Bernanke’s policies, his argument may hold in an academic setting, but the real world is a bit more complicated. Summarizing the greatest money printing experiment in monetary history, Bernanke proudly stipulates that the program has been “effective”, because: “equity prices have risen significantly”; and “inflation compensation as measured inWed, 16 Feb 2011 13:51:22 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-02-16.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-02-04.htmlWith Ronald Reagan’s 100th birthday around the corner, it seems fitting that the world may need another President with the same level of foresight. This time it’s not the U.S., but China that may need a President Reagan. When Reagan became the 40th President of the United States, he gave the U.S. a vision that inspired an entire generation. Not only was he a charismatic leader, but timing was on his side, allowing him to be a catalyst for change. The economy was suffering from the effects ofFri, 04 Feb 2011 07:34:44 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-02-04.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-01-11.htmlI began writing this note on New Year’s Day; the holiday season is over all too early for me as I contemplate the coming year. Along with other investors, I have many worries, but at the top of my list is the budget battle that will be fought in Washington, every state capital and most capitals of high-income countries abroad. As I finish this note, Republicans are now in charge of the House of Representatives. The U.S tax battle on the federal level was fought and resolved a few weeks ago,Tue, 11 Jan 2011 15:18:14 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-01-11.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2011-01-06.htmlThe Wizard of Oz would be proud of our policy makers: perception may be reality when it comes to investor confidence, even if we live in a fairy tale. However, investors that can afford to build a yellow brick road paved with gold may outshine those who build theirs with magic. Let's enjoy the dream for a moment: the Federal Reserve (Fed) has sprinkled money on the economy, Congress has kept taxes low and we see signs of a recovery. A recovery driven by consumers with more disposable income.Thu, 06 Jan 2011 12:31:38 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2011-01-06.htmlhttp://www.fxstreet.com/fundamental/market-view/merk-insights/2010-12-15.htmlIn August, Federal Reserve (Fed) Chairman Bernanke stated inflation was too low; in October, the Fed's Minutes lamented that the market appeared not to take Bernanke's August statements seriously enough. In our assessment, today's Fed statement of the Fed's Open Market Committee (FOMC), with an almost verbatim repetition of the previous FOMC statement, screams: "markets: trust us, we mean what we say." When former Fed Chairman Volcker raised rates in the 80's to root out inflation, initially,Wed, 15 Dec 2010 08:13:32 GMThttp://www.fxstreet.com/fundamental/market-view/insights@merkinvestments.com (Merk Hard Currency Fund)http://www.fxstreet.com/fundamental/market-view/merk-insights/2010-12-15.html