Daily Bell: Tell us about Merk Funds. How much does it manage and in what capacities?
Axel Merk: Merk Funds manages over $600 million in four mutual funds; we invest in currencies, international fixed income securities and gold. We try to give investors managed currency risk in a variety of forms, seeking to profit from a rise in currencies. One of our products is what we call non-directional, which is more tactical in nature.
Daily Bell: As early as 2003 you identified the building of the credit bubble. How was that possible? You use Austrian economics?
Axel Merk: First, with regards to Austrian economics, many people say that I'm an Austrian, but I like to have my own way of thinking about the world. Throughout my career – and that includes my academic work as a student – I've always focused on volatility. I wrote a book in 2009, Sustainable Wealth. Without going through the entire book, basically the driving force of the environment we are in is induced by monetary policy that kicks the world into overdrive. When you have the world in overdrive, commodity prices go up and there are all kinds of unintended consequences, many of which we have seen today.