"We're selling the dollar, we're buying gold," Merk exec says - Wealth Management

"There is no exit in sight" from the Fed's quantitative easing, argues Axel Merk

"What the folks at the Fed see are that the markets are frothy, that equity prices are high, and saying, 'Wait a second. We've got to one day prepare these folks for one day we'll exit,' but if you look at what the Fed is watching, inflation numbers are down, manufacturing numbers are down, folks are pushing folks to part-time jobs because they don't want to pay for Obamacare," Merk Investments CIO Axel Merk tells Fox Business in a June 3 interview.

"This is no recovery where you want to mop up liquidity if you're the Fed. And so at this stage, the only thing they do is talk. And then you heard it: They might even consider increasing the purchases. They just want to talk, get the markets ready for what may come down. The important thing, though, is the market is pricing in an exit, and there is no exit in sight, and so the market has gotten ahead of itself. ... We cannot afford higher interest rates. Think about what happens to the sustainability of government debts. We cannot afford to pay higher interest rates. ... We think that the euro is cheap, the dollar is expensive, and gold -- as you see today -- gold is doing quite well because our manufacturing numbers are not good. And so with that I think there's a lot of wish belief by the Fed, by many in the markets -- it's not going to materialize in a Goldilocks scenario, so we're selling the dollar, we're buying gold, and we're also buying the euro."

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