Saturday, February 7, 2015

Axel Merk - Why Asset Prices Must Return To Lower Levels

Saying it's been a busy week and half of the central bank front is perhaps a sizeable understatement.

First, the Swiss National Bank stunned the world (and its brethren central banks) by removing its peg to the Euro. This was quickly followed by Mario Draghi finally making good on his longtime threat of firing QE bazooka, announcing that the ECB will pursue a 60 billion Euro per month easing program for the next 16 months. And amidst all the smoke, the Canadian central bank snuck in a surprise rate cut to its interest rate.

To make sense of both the "Why?" behind these extreme moves, as well as the "What?" in terms of their implications, Axel Merk, founder and Chief Investment Officer of Merk Funds joins us this week.

In his opinion, recent events are exactly the kind the symptoms he's been expecting as the prime strategy pursued by central banks since 2008 -- to force capital into speculative assets -- approaches its natural and inevitable denouement. Indeed, he projects the surprises in store for us and the systemic instability we're beginning to see are just getting started.

- Source, Peak Prosperity

Tuesday, February 3, 2015

Michael Pento - Flocking Back Into Hard Money, Gold

Financial analyst Michael Pento says, “Gold is going up in all currencies because investors are coming to this realization, or epiphany, that you cannot trust central banks. In 2008, we had the Great Recession. We had the bursting of asset bubbles. We had the bursting of the housing bubble. We had the bursting of the stock bubble. The Federal Reserve came in, and it was not only the Fed, we had central banks from across the world increase debt by 40%. 40% since 2008 on a global basis, and they took interest rates, which were already low, down to 0% and negative % and left them there for going on almost seven years. People had the audacity to believe that this was going to be a success story. They are slowly learning we have solved nothing. We have just made all the problems associated with the great recession much, much worse. As that realization unfolds, people will be flocking back into hard money, and that means gold.”

What will trigger the next financial meltdown? Pento says keep your eye on the land of the rising sun, heavily leveraged Japan. Pento predicts, “I think the Japanese central bank is absolutely going to destroy that currency. . . . When that unwinds, you are going to see a massive wipeout of equity prices. That just metastasizes across the globe.”

- Source, USA Watchdog