Merk Investments Commentary on CNBC

We frequently communicate with journalists of major publications on current economic and political topics. Our email today to CNBC's Power-Poll was broadcast to CNBC viewers worldwide. The Power-Poll is a CNBC sponsored survey to which email commentaries are invited. The question our email was in response had sought comments on was whether there is a bubble in the bond market:

From: Axel G. Merk <agm@merkinvestments.com>
Date: Tue Feb 25, 2003 9:18:47 AM US/Pacific
To: powerlunch@cnbc.com
Subject: government bond bubble


You need to differentiate between corporate and government bonds. Long-Term Government bonds are in a bubble that will burst once it becomes apparent that the government is determined to induce inflation to fight off deflationary symptoms. The weaker dollar is an early warning sign.

Corporations are cleaning up their balance sheets, and the corporate bond market is likely to strengthen.

Axel Merk
Merk Investments
Palo Alto, CA