Merk Analysis

Who cares about the dollar? It turns out quite a few do, except for those who could put it on a course to long-term recovery.

Conventional wisdom suggests that when you lower interest rates, splatter lots of money onto the economy through spending programs and credit facilities, the economy will recover. There are a couple of problems with that view.

Inflation is dead — long live inflation! We hear about the threat of hyperinflation in the media — is this for real, can it happen in the United States? Are we hyping up the word inflation, is it an inflationary play of words to grab attention to discuss the threat of hyperinflation? Let’s deflate the hype and put inflation where it belongs … at the forefront of your concerns.

Treasury Secretary Tim Geithner’s trip to Asia has been heralded as a sales trip aimed at convincing the Chinese to keep buying U.S. Treasuries and thereby finance U.S. deficits. Such headlines are, in my humble opinion, an insult to the Chinese.

At every step, Adam Smith’s “invisible hand” to guide the economy has become less evident. Back in the 18th century, the economist coined the term as a metaphor for the self-regulating nature of free markets.