How to Invest During the Government Shutdown

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Oct. 1 (Bloomberg) -- Merk Investments President and CIO Axel Merk discusses his investment ideas with Julie Hyman on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

People looking ahead to the debt ceiling.

What does this all mean in terms of your investing, currencies?

We are not seeing a lot of concern reflected in the market, certainly.

No, because the shutdown is a distraction.

Hopefully people focus on the long-term fiscal sustainability which is the real issue.

In the short term, gold is going lower.

The dollar was up all day and is now recovering a tad.

Gold is selling off because there are some big sellers out there in the market.

The real story is in the euro.

A lot of bad news coming out, but they are still climbing.

The ecb is meeting tomorrow.

We think the euro is going to move higher from here, and all of these targets are just a distraction.

We know the federal reserve will continue to meddle in fiscal policies, trying to smooth things over, taking the one incentive away and there might be.

Over time, in our view, the biggest issue is economic growth.

That will show that deficits are not sustainable, just as the japanese are struggling.

In europe, while it is a pain to be there in many ways, the currency there will be going higher.

Let's get back to the federal reserve.

Even though the prospects for tapering of stimulus right now do not seem likely, necessarily before the end of the year, when it does, that will presumably push up yield, and that could be positive for the dollar, no?

What might be positive if we have new leadership announced, not that we will likely, but we cannot price risk.

We do not know what the fed is up to, the federal reserve do not know what they are up to.

I do not know what is going on because they are managing the yield curve.

They are confused about the data.

That is the real problem.

We need to know where we are heading and then we can agree or disagree and price risk accordingly.

We have little doubt that we will have a dovish fed because we cannot afford high rates.

It would cripple the government much more so than a shutdown.

In 10 years from now, our interest expense will be a trillion dollars higher than it is today.

How will we have any government spending?

It does not matter what republicans and democrats are bickering about right now.

Taking a very long view.

This text has been automatically generated. It may not be 100% accurate.


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