Axel Merk: All Bets Are Off on How Low Central Bankers Will Take Rates (Podcast)

Axel Merk: All Bets Are Off on How Low Central Bankers Will Take Rates Podcast by Mike Gleason for Money Metals

Coming up, Axel Merk of Merk Investments joins me for a conversation on the latest central banking shenanigans, why he believes the economy may heat up again in the near term, and why the war on cash and the move to digital money will continue to drive people into gold. So don’t miss another great interview with Axel Merk, coming up after this week’s market update.

Gold and silver markets are testing support levels this week. Gold has been hanging around the $1,500 level while silver trades sideways through Thursday’s close at just above $18 an ounce.

As of this Friday recording, gold prices come in at $1,498 per ounce, down 0.7% for the week. Silver, meanwhile, now shows a weekly loss of 2.0%, with most of that loss coming here today, to bring spot prices to $17.89.

The bright spot in the metals space this week is palladium. The catalytic metal pierced through $1,600 an ounce on Thursday to record a new record high. Palladium prices now check in at $1,609 after gaining $60 or 3.9% on the week.

As for platinum, it is putting in a slight weekly gain of 0.2% to trade at $956 an ounce.

Metals investors will await the market’s reaction to next week’s FOMC policy meeting. It wouldn’t be surprising to see an attempt in the futures markets to smash gold and silver prices down to lower support zones in the trading around the Fed’s decision.

Flushing out some more speculative longs and late comers with weak hands would be a healthy development in setting up the next rally. Those who got left behind in this summer’s big moves in metals markets should certainly consider taking advantage of favorable buying opportunities as they present themselves ahead of a possible seasonal push higher in the sector this fall.

Conventional financial markets could become volatile as uncertainties surrounding America’s economy and political future weigh on investors. We are potentially only one election away from falling into socialism and one quarter’s GDP report away from falling into recession.

Lately, the mainstream media has been fixated on the possibility of the Trump economy heading toward recession, as heard in the following montage:

President Trump: Certain people in the media are trying to build up, because they’d love to see a recession.

News Report Clip 1: Why are people talking about a recession? And, you say it’s here.

News Report Clip 2: There are indicators that the US could be headed for a recession.

News Report Clip 3: … could be headed for a recession.

News Report Clip 4: … be inching toward a recession.

News Report Clip 5: They see a potential recession on the horizon.

News Report Clip 6: Happening now, recession fears.

News Report Clip 7: What are the odds that you see of a recession?

News Report Clip 8: A recession.

News Report Clip 9: Recession.

News Report Clip 10: Recession.

News Report Clip 11: At some point, there’s going to be a recession.

Yes, at some point there will be a recession. But it’s not here yet. And economic forecasters as a whole have a terrible track record when it comes predicting major turns in the economy.

All the recession talk now spewing from the media is speculative at best – politically calculated at worst. Let’s face it, some anti-Trump partisans in the media are giddy over the potential for a recession to bring down the President’s poll numbers.

That said, we do see signs of an economic slowdown of at least some magnitude. Despite a low official unemployment rate, jobs are being created at the slowest pace since 2011. Corporate earnings growth is also weakening. And GDP growth in the in the second quarter fell from 3% to 2%.

Other indicators suggest recession fears are overblown – or at least premature. Household purchasing power remains strong. The stock market is trading up near record highs. And the yield curve is no longer inverted. Long-term bond yields spiked this week as the latest CPI report showed core inflation picking up.

However, copper and other industrial metals are struggling to gain ground as the PMI manufacturing data has slumped to a multi-year low. Weakness in industrial output comes largely as a result of the ongoing trade war between the U.S. and China.

This week, the Trump administration touted some potential breakthroughs with China. Beijing will reportedly agree to buy more agricultural products from U.S. farmers. That news sent grain futures surging.

If more progress is made in resolving trade disputes, then the economic growth numbers could tick up and spoil the recession hopes and dreams of Trump’s Democrat rivals.

The biggest wild card for President Trump’s re-election prospects could be the Federal Reserve. Although Fed officials are finally cutting rates, they aren’t doing so rapidly enough as far as Trump is concerned.

This week he called Jerome Powell and company “boneheads” for keeping rates too high. Trump suggested the Fed should take rates down to zero, or even into negative territory, to bring the U.S. more in line with the rest of the world.

On Thursday, the European Central Bank lowered its rate on deposits from banks down yet another notch to negative 0.5%. The ECB also announced it would restart its bond-buying program and pump 20 billion euros a month into government and corporate bonds.

Next week the Federal Reserve will make its move. It is widely expected to cut rates by 25 basis points.

The race to depreciate national currencies is on. Central bankers and politicians will be undeterred as long as they see no major inflation consequence to their actions. But inflation can creep up slowly before it spirals out of control like it did in Zimbabwe.

Former Zimbabwean dictator Robert Mugabe passed away last Friday. His heavy-handed socialist policies turned what was a prosperous and stable country known as Rhodesia under British rule into a hyperinflationary hellhole. The central bank of Zimbabwe began issuing its common currency in trillions of dollars per note.

Of course, none of the “trillionaires” created by the Zimbabwe hyperinflation actually gained wealth as a result. Instead, they lost purchasing power minute by minute while they held their rapidly depreciating Zimbabwe dollars.

Nothing better encapsulates the distinction between inflation-prone fiat money and sound money than our Silver versus Zimbabwe Dollar Display. It features a genuine silver American Eagle coin and an authentic Ten Trillion Zimbabwe dollar banknote that is now worthless as a medium of exchange. The display poses the essential question – “Which Has Real Value?”

It makes for a thought-provoking gift or addition the desk of anyone who appreciates sound money and is available at

Well now, without further delay, let’s get right to this week’s exclusive interview.

Axel Merk

Mike Gleason: It is my privilege now to welcome in Axel Merk, President and Chief Investment Officer of Merk Investments and, author of the book Sustainable Wealth. Axel is a well-known market commentator and money manager and is a highly sought-after guest at financial conferences and on news outlets throughout the world, and it’s great to have him back on with us.

Axel, it’s a pleasure as always. Thanks for joining us again.

Axel Merk: Great to be with you.

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