Tuesday, September 20, 2011

The Swiss National Bank Gives Up

http://www.fgmr.com/swiss-national-bank-gives-up.html
The Swiss National Bank finally gave up.  For months it tried standing alone against all of the bad monetary policies being pursued by the ECB, the Federal Reserve, the Bank of England and indeed, nearly all of the central banks of the world, but it was a losing battle.  So last week the Swiss National Bank succumbed to these pressures and pegged the Swiss franc to the euro.

Consequently, as the euro is debased, the Swiss franc will head south with it.  The world’s last safe-haven national currency has finally disappeared, making the ownership of physical gold and silver all the more important.

That the pattern of the Swiss franc in the above chart is similar to those of the other three currencies may surprise some people.  The obvious conclusion though is that the Swiss franc has not been a safe haven for at least a decade.  All currencies are being debased against the world’s time-tested and trustworthy num√©raire – gold.

As I wrote last March, “the gold price is rising at an accelerating rate” meaning that national currencies are “losing purchasing power at an accelerating rate.”  These quotes accurately describe what happens to national currencies moving toward hyperinflation and collapse, which is where the above four currencies are headed.

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