Axel Merk: Making Sense Of The Impact Of Brexit

A very sleep-deprived Axel Merk joins us for this special edition podcast. Axel and his team have pulled late nights over the past few days following the Brexit vote results in real-time and the ensuing aftermath.

Axel, CEO and founder of the Merk Funds, is originally from Europe and one of the best experts we know on the currency markets, as well as monetary policy. In this podcast, he explains why he sees the Brexit as a sea-change in sentiment that will have far-reaching implications for Britain, Europe, and the rest of the world -- though it may take years before they are fully recognized and expressed. He expects the post-Brexit future to more market volatility, more populism as political stability weakens, more (ineffectual) fiscal spending to goose economic growth, and likely more armed conflict around the world.

We are rushing to make this special edition podcast available today given the hunger for informed perspective on this topic. As a result, the written transcript is not available yet -- we will post it here as soon as we received it back from our transcription agency.

Click the play button below to listen to Chris' interview with Axel Merk (40m:21s)

This is a companion discussion topic for the original entry at

"Good morning Mr. Darwin.  It's been a long time." "Good morning. Not really Sir. I have been favoring R type breeders.I have changed my mind. K type breeders are now going to come back in fashion."
England is a mousetrap for R type immigrants.  Hard to get in and hard to leave. 

And there's always free cheese in the mousetrap. 
The Wars of the Roses should teach us something. Or maybe not.


Or perhaps we should play that other Saxon classic from Germany's Weimar,  Macky messer. We know how that ended.


No more brother wars


K type environments put a premium on brain power. (Ain't that the truth?) Just keeping it real.

On Faux News, no less.

Instead of staying out of the spotlight and trying to appease it's critics so they don't also leave, it appears the EU may be doubling down.
Yesterday, EU Parliament President Martin Schultz tweeted this "sentiment:"

"The British have violated the rules. It is not the EU philosophy that the crowd can decide its fate".

Schulz: "The British have violated the rules. It is not the #EU philosophy that the crowd can decide its fate". #TBC 

— TaleofTwoTreaties (@Taleof2Treaties)  7:42 AM - 27 Jun 2016
Astounding!  I'm not so much shocked that he thought it (because EUrocrats DO act like little dictators) but that he chose to say it.  Not only did he say it publicly, but he sent it electronically so they can't later stuff it down the Memory Hole (TM) or say he was misquoted.  Looks like EU leaders are NOT going to make nice and try to sweet talk other Europeans into staying in the Union.  Imagine a boot stomping on a face, forever.

And then England's Express via Getty is reporting pending radical action to implement Schultz's attitude in the structure of the EU.  This one is so outrageous I'm actually a little skeptical it's for real.

The foreign ministers of France and Germany are due to reveal a blueprint to effectively do away with individual member states in what is being described as an “ultimatum”. 

Under the radical proposals EU countries will lose the right to have their own army, criminal law, taxation system or central bank, with all those powers being transferred to Brussels. 

Controversially member states would also lose what few controls they have left over their own borders, including the procedure for admitting and relocating refugees. 

The plot has sparked fury and panic in Poland - a traditional ally of Britain in the fight against federalism - after being leaked to Polish news channel TVP Info. 

Wow!  Just wow!  Again, this kind of thinking has probably always been the long term plan at the foundation of the EU, but until now it was kept under wraps so as avoid "spooking the horses."  Apparently, the gloves have come off.

And both of these revelations have come just days after the Brexit vote.  Have they no sense of decency?! 

"Welcome to the Hunger Games. And may the odds be ever in your favor."


I love a good crisis when people's true colors shine through.  The EU is staffed with a breed of technocrat that truly believes they are above 'the little people'  and they are not afraid to say so.

That quote by Schultz made me cringe and chuckle at the same time.  The glee came from the fact that he cannot retract it now, and so there it is permanently in the ether certain to cause all sorts of difficulties for him as he encounters people who are affronted by his views.

But as with the Patriot Act, there are certain legislative ideas so odious that their crafters know better than to trot them out during normal times.  A crisis is required to try and cram through truly horrendous pieces of "legislation" (which is in quote because these nasty pieces of law are invariably gigantic power grabs more than anything else, always swaddled in a thick blanket of "it's good for the people" B.S.).

Yes, now we can see the EU more clearly for what it is.  A massive make work program for those drawn to secretive power and mind-numbingly tedious rule making and administration.

Meanwhile, as they pursue those petty, temporal aims of no lasting human consequence, the world burns. Resources deplete, and economic and ecological migrants along with war refugees swell across the globe seeking exactly the sort of paralyzed political theater with guilt at its core that Europe provides.

Thanks for this, THC.  The link you provided is a tweet from Giovanni Zibordi, an anti-EU Italian trader, in Italian, quoting EU Parliament President Martin Schulz.  I have tried to find the German (or possibly English) original, but so far have had no luck.  Did Schulz tweet this or say it?  It's not currently on his Twitter page, but he may have taken it off.  He may have said it during a plenary session of the EU Parliament in Strasbourg, but the live broadcast of that already happened and it's not yet available in recorded format.

Does anyone know in what medium Schulz said this?  I expect that that he did indeed say it, but it would be good to be sure.

Edit:  Debunked.  Like Werner and Zibordi, some here were quick to swallow this one whole, even when the link provided was clearly not from Schulz's Twitter page, nor was it in German (or English). Perhaps this piece of internet "news" - and we already know we need to be wary of all sources, and most definitely re-tweets - was so readily accepted because it confirmed pre-existing beliefs.

This is yet another piece of data for my position on PP & geopolitics. In a world worth inheriting we need people to govern their System 1 when looking at "news," and let good old System 2 have a look at things for a few minutes, hours, days, weeks, and sometimes years, before we become too sure of ourselves.

P.S. It would be good to have an interview with an expert in cognitive psychology and the internet, as a lot of interesting findings are coming out regarding how social media and online communication are changing our thinking and reasoning processes.  Even more scary, the net may be reducing our ability to empathize, which has to potential to bleed over, from our virtual relations to our relationship with close loved ones in real, physical proximity.




I haven't heard a clear, concise description of the likely impact of BREXIT yet, including this podcast.
What I got from the podcast is that Axel thought that the vote was a mistake, despite accepting that there is an intentional, manipulated world asset bubble of immense proportions.

The manipulated bubble is a balloon looking for a pin.  Why is BREXIT any worse than any other pin?

If I was able to cast a vote on BREXIT, I might have voted exit, solely to get things moving again, knowing full well that a price would be exacted.  Heck, the pain is inevitable.  How will helping to support "extend and pretend" make anything better?

I expect that that he did indeed say it, but it would be good to be sure.

Edit:  Debunked.  Like Werner and Zibordi, some here were quick to swallow this one whole,....

So you think he probably said it but are shaming those who believed the tweet?  

Shaming is so … And people shame others because they want to feel…?

AK GrannyWGrit

Most of the EU Ministers have never held a non-government job, i.e. a real job where cost pressures exist.  Looks who the fools are!

There is a ton of work to do before we get back to even!

Thanks for your vigilance HughK, I guess we all need to watch ourselves - as much as others. No serious criticism of anybody else implied. To use Christian parlance, I guess most of us here are still sinners, and  "there but for the grace of God "…etc.

To use Christian parlance
As a Pagan I often use Christian sayings too. Christ is one my heroes. I can't say the same for the rest of the mob though. 

We owe the unelected swill of Brussels no truth.

Wikiquote/Wikipedia attributes this variously to John Bradford, Arthur Conan Doyle’s Holmes (who attributes it to Baxter), St. Philip Neri, and so on.
However, they are all predated by an original variant “… And such WAS I. But by the grace of God, I am what I am.” – Paul of Tarsus.
Bradford was one of that crowd. Neri was one of that crowd. Paul was definitely one of that crowd. Multiple crowds, in fact.
The ONLY one I cannot imagine saying that would be Y’sua of Nazareth. His only quote that relates was something like: “I have a baptism with which I must be baptised, and I wish it were already accomplished”.
Because by the grace of God, he had to go.
And thus, with resolute determination, he turned his steps toward the one place he DIDN’T want to go, toward Jerusalem.

Axel's comments are spot on if you take the time to reflect on what he's saying. The rise of "Bernie-ism", "Trump-ism" and the recent Brexit results, only highlight the current state of our human predicament. When we become comfortable in a world of ease (easy credit, easy energy, easy food, etc.), it tends to breed a sense of entitlement. We then become irritated when things don't go our way and we begin to make "knee-jerk" decisions based on myopic considerations. Wars have a decidedly important role to play on getting us back on track. Of course, we do have the option of doing more with less, contributing to the needs of others, partaking in community building and being good stewards of what we've been given. However, as Axel points out, we tend to ignore those options in favor of sociopathic behaviors and end up in a big snit.

That's all, folks - the Brexit crisis is over (Yahoo Finance)

[quote]We can all Breathe a sigh of Brelief: Brexit is Brehind us.

That’s what the markets seem to be saying, anyway. On June 17, six days before Brits voted to leave the European Union, the S&P 500 index closed at 2,071. Stocks rallied during the week heading into the vote, as traders anticipated a “remain” outcome.

Then stocks tanked for the next two days, on the “leave” outcome.

Stocks have since rallied again, with the S&P 500 settling –guess where — right around 2,071 six days after the vote. So markets have now completely reverted to the status quo ante, before traders started betting on the Brexit outcome. “We’re in the process of putting in a bottom,” David Nelson, chief strategist at Belpointe Asset Management, tells Yahoo Finance. “The worst fears seem to be gone.”[/quote]

"Because, Such As"

The only thing different is the spike in Gold and Silver…Tells me that something has changed

Silver is telling the story best, I guess because They aren't naked shorting it nearly as much as gold. 

One would think TPTB would naked short Silver to not make it so obvious.

I think the most striking thing about the whole vote is that no one really understood what they were either voting for or against. Even on the eve of the vote people I would class as well educated (fellow engineers in their early 30's) could not make up there own minds as to what either an 'In' vote or an 'Out' vote would actually mean. I remember the dreaded facebook aftermath a day after the vote - those who voted 'Out' were morons and an embarrassment to the nation whereas those who voted 'In' were considered privileged snobs. I think that the ultimate victor was mass media displaying its ability to sow confusion. It somehow descended into a left-wing/right-wing farce from which there was no escape. Inevitably people voted on single issue topics such as 'immigration' or 'european solidarity' or 'the economy' or 'jobs'. It still amazes me that in an Information Age people can remain so uninformed.
For what it's worth I voted 'Out'. I viewed the issue as a libertarian versus statism debate. For me, sovereignty is not up for discussion - I can't give consent when I don't understand what it is I'm giving consent to. And if you take it from me by either force or coercion then I'm afraid it isn't consent.

Secondly, I don't view the European Union as sustainable. I look at youth unemployment to see the health of a political entity. Greek youth unemployment @ 50%, Spanish and Italian around 40% and Portugal bringing home a cool 30%. Sorry, no future for the young means no future for Europe. I wonder how much youth suicide rates and domestic violence incidents have grown by over the last 5 years?

Lastly, it won't come as a secret to many here that I value the work of Gail Tverberg as much as I do Chris'. Gail talks of economic drag using the term 'entropy' and lists 3 key components; debt, pollution and overpopulation. I look at how the European Union addresses those 3 issues. Debt - hah! do I need to do the figures here? Pollution - on the face of it Europe has reduced its CO2 emissions by 19.8% from 1990 - 2013; but only by outsourcing it to China (Chinese CO2 emissions have tripled since 1990) and European Union is still the world's 3rd worst offender purely in volume terms (it sits middle of the table per capita). Overpopulation - what were those migrant figures again?

Sadly, I don't think most of either the 'In' or the 'Out' crowd really understand the headwinds that we are facing. Thank Wodan for PP!

All the best,