Will the Occupy Wall Street protests have a detrimental effect on the dollar? No doubt some protesters hope so, and currency manager Axel Merk says the notion isn’t farfetched.
“On its face, suggesting that the Occupy Wall Street movement may threaten the U.S. dollar may appear like a tall order,” he writes in commentary on Merk Funds’ website. “However, simply dismissing Occupy Wall Street as a fad may be a big mistake, just as it is a mistake to dismiss the Tea Party movement …To determine where policy makers and with it, the U.S. dollar, may be heading, it is important to understand that the driving forces behind both movements have common roots.”
The short explanation, he writes, is that rising costs coupled with stagnating real wages breeds an environment of social unrest. While the tea Party and OWS movements are the face of this “unrest”, it helps to dig deeper and analyze the root causes to better understand and assess the ultimate implications of these protests.