#425 Axel Merk: I Sat Down With Kevin Warsh — What the Fed Is Really Up To and Where Gold Goes Next

Axel Merk, founder and CIO of Merk Investments, which manages about $2.5 billion, joins Julia ahead of this week’s FOMC meeting. He explains why Fed Chair Kevin Warsh’s goal of “removing a dose of accommodation” means a tightening bias without a sledgehammer. He also explains why gold has fallen during the Iran war: markets treat it as a temporary supply shock that pushes real rates higher. And he describes the decoupling he’s watching for that could free gold from the conflict. Merk, who met with Warsh at the Fed in August, says Warsh has been consistent and is trying to pull the Fed back from micromanaging the economy and from heavy forward guidance. He also describes the institutional pushback Warsh faces. He breaks down the four kinds of gold buyers and sees near-zero odds of a hike this week. He warns that the AI debt binge could eventually force lower rates. And he argues that AI’s massive capital needs are leveling the playing field for gold miners, which he calls some of the cheapest assets out there.

Thank you to our partners

Augusta Precious Metals — To learn more, visit https://juliabuysgold.com/ or text “Julia" to 35052

Monetary Metals - learn more at https://www.monetary-metals.com/julia/

Links:
https://www.merkinvestments.com/
https://x.com/axelmerkTimestamps:

Timestamps:

0:00 Welcome Axel Merk
1:05 The big picture: Warsh’s “dose of accommodation”
3:17 Iran, the Israeli election and the midterms
5:27 Why gold fell during the Iran war
7:49 Will gold decouple from Iran?
9:50 The four types of gold buyers
12:18 Who is Kevin Warsh? Meeting him at the Fed
15:16 What Fed independence really means
17:40 Forward guidance: referee, not player
20:24 What it’s like in the room
21:07 Why not just abolish the Fed?
24:18 What markets look like with a narrower Fed
27:34 Blaming the Fed for populism
29:56 Warsh’s cat-herding challenge
31:18 Hike or hold this week?
33:26 Volatility, cash and how to size risk
36:03 Why he’s heavy in gold miners
39:13 Parting thought: invest in your health

The content of this podcast is provided for informational, educational, and entertainment purposes only and does not constitute financial, investment, tax, or legal advice. Nothing discussed should be interpreted as a recommendation or solicitation to buy, sell, or hold any security. Guests' views are their own. Always do your own research and consult a qualified financial professional before making investment decisions.