In the News: Christian Science Monitor

Portfolio manager Axel Merk tells Christian Science Monitor that gold may do well if the US is downgraded

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If Standard & Poor’s and other bond rating agencies do downgrade the US government’s debt, gold may do well, says Axel Merk, president of Merk Investments, a firm in Palo Alto, Calif., that invests in gold and currencies such as Swiss francs and Japanese yen.

A lower debt rating for Treasury securities will give them a lesser value in bank portfolios, Mr. Merk reasons. Since banks carry the securities as assets, the banks will have less money to loan in the future. This will reduce economic activity, he reasons..."