The US$64,000 Question the US$ vs. the Swiss Franc.

January 31, 2009

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Every major country in the world is increasing their monetary supply, and all analysts expect inflation and a lot of it. So the US$64,000 Question is this; will there be any currency that comes out of this crisis to be considered the new base currency, like the US$ is now? The Big A is that right now nobody knows because there is no totally obvious currency, and that is why the US$ is sill doing well although it is in a long term down trend. This is happening in part because interest rates in the EU remain higher than in the USA, and higher interest rates attract investment capital, which first has to be converted to the higher interest currency, and that bids up its value vs. the dollar. Europe represents an about the size of the USA, so there may be some safety there. One can argue for the Swiss Franc, but you know the Swiss banks have had some problems too. So there is no clear picture emerging yet.

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