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Axel Merk


Editor's Note:  

We are pleased to announce that beginning today, renowned gold and currencies expert Axel Merk will be writing a monthly column for Dow Theory Letters. It will be published the first Thursday of each month.


Not Normal


During her confirmation hearings, Fed Chair Janet Yellen suggested the Fed will likely revert to a “normal” monetary policy once the economy is back to “normal.” Similarly, “normalization” is a view touted by economists who believe the economy is healing. They think that the Fed will gradually “taper,” and then raise interest rates as economic growth continues to pick up. Unfortunately, I don’t think the storyline will play out that way.


To begin with, I believe Yellen’s statement is an oxymoron. The economy cannot go back to normal with interest rates at zero. For the economy to go back to “normal” we would need market-based interest rates, rather than simply low interest rates. Additionally, we ... Log in or subscribe to continue reading.

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