In the News: Smart Money

Smart Money discusses ways to short the dollar with portfolio manager Axel Merk

" '... gold is still the purest indicator of monetary impact and it’s far less volatile than most other commodities, says Axel Merk, the founder of Merk Investments. Two out of three of Merk's funds are bearish on the dollar. Although, gold hit a new record of $1,059.60 last week, it’s very likely to continue rising in the near term, he says. Silver, platinum and palladium also tend to rise when the dollar falls in value, but they’re subject to wilder swings; silver can move 10% in a day, he says.'

'These are hedges against the weaker dollar but they have different dynamics,' says Merk. 'You have to know their volatility. It feels good when they go up, but your stomach can turn upside down when they go down.'

'Investors should also look for a mix of Western European currencies, in particular the Swiss franc and the Norway kroner, as well as the euro. Western Europe has maintained price stability, and Norway is one of the few countries with a surplus, Merk says.'

'To leverage against the dollar with foreign stocks, avoid stocks that are exposed to large multinationals or companies that conduct most of their business in U.S. dollars, Merk says.' "