Greg Hunter – Money manager Axel Merk says you simply must own physical gold in this risky environment. Merk explains, “Many people say why invest in a brick that doesn’t pay interest? When you look at cash paying negative interest rates on a real basis, after inflation, then a brick suddenly doesn’t look so bad anymore. . . . I would allege the Fed is all but promising to be behind the curve. Even if the Fed is trying to raise rates, emphasis on trying, they will be behind inflation. Yes, they will raise rates, but net inflation, real interest rates are going to continue to be negative. If I look out a decade from now, I don’t see how the U.S., Europe, Japan, or any other country can afford positive real interest rates.”

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Merk thinks stocks are “expensive and way overdue for a bear market” even with the recent rally that we are in and thinks the market can “crash.” Merk contends, “What the central banks have been achieving in recent years is they have been breeding complacency. . . . When volatility is low and prices are rising, what could possibly go wrong you buy stocks? What has happened is instead of buying the dips, people are now going to sell the rallies. We’ve had these amazing rallies, and that is exactly what happens in a bear market. . . . With rates going back away from the zero level, risk premiums have to rise. That means fear has to come back into the market, and volatility has to go up. With the economy, if you base the recovery on asset price inflation, you have a big problem on your hands.” Continue reading →