Thursday, September 8, 2011

Martin Armstrong: Swiss Franc Devaluation Dawn of a New Age of Competitive Devaluation

Do not expect to find safety from the worldwide race to the bottom among all fiat currencies in anything other than gold and silver.

Just when you thought the Swiss Franc would be the safe haven for capital in a tempest tossed financial sea, oops, here comes the dawn of a new age of competitive devaluation.
The Swiss shocked the world by pegging its currency the franc to the euro. 
History always repeats because people always respond in the same manner regardless of the generation at issue. 

Capital always rushes around from one currency to the next in time of economic stability.  Because Switzerland is a small country, it cannot withstand a migration of capital on a grand scale.  Excess capital inflow drives the value of a currency higher which results in raising the price of that nation's exports in theory reducing its exports and economic growth.
This was one of the contributing factors of the Great Depression that led to protectionism for the lack of understanding about currency values and capital flows.

Swiss Devalue the Franc
Answering Your Questions.

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