Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Retirement Compounders®
  • Free Email Signup

The World’s Most Profitable Currency

June 24, 2011 By Jeremy Jones, CFA

Can you guess which of the world’s currencies has appreciated the most this year? If you guessed the Paraguayan guarani, you’re right. A close second was the kina. Which country uses the kina? Why, Papua New Guinea, of course! If you would have trouble spotting either of these countries on a map, you aren’t alone.

Like most sane investors, you probably limit your currency investing to developed countries and some of the larger emerging markets. Which major currency has performed the best this year? The Swiss franc. Just this year, the franc has gained 11.5% on the dollar. That crushes the 1% YTD return in the S&P 500. The franc is gaining because it is a safe-haven currency. When euro-area government debt worries come to the fore, investors sell their euros and, yes, buy dollars—but they also buy francs, with much more enthusiasm. And when investors worry about unsustainable U.S. debt levels or nuclear meltdowns in Japan, they buy francs.

Why is the Swiss franc a safe-haven currency? Switzerland is a neutral country, produces more than it consumes, and has run prudent fiscal and monetary policies for decades. Contrast that with the U.S. The U.S. is the world’s self-appointed police chief. That makes friends, but also creates enemies. The U.S. runs a persistent and troubling trade deficit and profligate fiscal and monetary policies. The U.S. Congress has racked up staggering deficits without batting an eyelash, while dithering over the trillions of dollars in unfunded Medicare and Social Security obligations. As for U.S. monetary policy, it has been a disaster. The Fed provoked the inflationary spiral of the 1970s by keeping money too loose for too long. Then in the late 1990s and the 2000s it created not one, but two asset bubbles in the span of a decade, the latter of which almost took down the U.S. financial system.

If you think I’m being unfair to the U.S., then I would advise that you take a look at the historical record. Here I am referring to the exchange rate value of the franc versus the dollar. I’ve included a chart of the franc-dollar exchange rate below. My chart shows the value of a single U.S. dollar invested in the Swiss franc at year-end 1971. What does the market say about U.S. management of the dollar? In only four decades, the franc has gained over 366% on the dollar. Said another way, the dollar has lost 80% of its value versus the Swiss franc. Point, set, and match for the Swiss.

In Young Research’s Global Investment Strategy, we advise on currencies, commodities, and global stocks and bonds. To find out which currencies we are buying today, please join us.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Canadian Crypto-currency Debacle
  • The Digital Currency Trojan Horse
  • Can Cyrpto-currency Revolutionize the News Business?
  • Author
  • Recent Posts
Jeremy Jones, CFA
Jeremy Jones, CFA, CFP® is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. CNBC has ranked Richard C. Young & Co., Ltd. as one of the Top 100 Financial Advisors in the nation (2019-2022) Disclosure. Jeremy is also a contributing editor of youngresearch.com.
Latest posts by Jeremy Jones, CFA (see all)
  • Money Market Assets Hit Record High: $5.4 Trillion - May 26, 2023
  • The Mania in AI Stocks Has Arrived - May 25, 2023
  • The Wisdom of Sam Zell - May 24, 2023

Search Young Research

Most Popular

  • Your Survival Guy Felt Like a U.N. Worker in Rome
  • The Mania in AI Stocks Has Arrived
  • Money Market Assets Hit Record High: $5.4 Trillion
  • Your Survival Guy in Rome 30-Years A.B. (After Babson)
  • The Future of the American City is This…
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • A Three-Week International Research Trip to Paris via Rome
  • Is an Investment Property Disaster Looming?
  • The Power of a Compound Interest Table
  • Risk and Reward: An Efficient Frontier

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

The Importance of a Balanced Portfolio

Invest with Peace of Mind and Comfort

What Kind of Life Are You Investing For?

RSS The Latest at Richardcyoung.com

  • The Nickel Pickle from EVs
  • My Nephew Graduates, and I’m Larry the Cable Guy
  • Why Is the Media So Terrified of Robert F. Kennedy Jr.’s Ideas?
  • Sen. Rand Paul Says It’s Time to Fight Back Against the Woke Left
  • Should McCarthy Have Forced the Government’s Hand?
  • Will America Succumb to Intimidation from “The Group?”
  • Rewarding Loyalty with Ridicule
  • Rome, Paris, U.S.A.: Global Crisis in Confidence
  • June Is Retirement Compounders Month
  • Americans Scared of CBDC Control of Their Money

RSS The Latest at Yoursurvivalguy.com

  • My Nephew Graduates, and I’m Larry the Cable Guy
  • California Is Driving These Wealthy Businesses Out of the State
  • Rome, Paris, U.S.A.: Global Crisis in Confidence
  • Your Survival Guy’s Best Insider’s Guide to Rome
  • What Is a Fiduciary Duty? Are You Working with a Fiduciary?
  • Survive and Thrive June 2023: Your Survival Guy in Rome 30-Years A.B. (After Babson)
  • Birth Rates in France Worst Since Post-WWII Era
  • Your Survival Guy Felt Like a U.N. Worker in Rome
  • Social Security: Declining Italy Needs a Bambino Boom
  • ATTACK ON THE IVAN KHURS: Unmanned Vessels Changing Naval Warfare

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2023 | Terms & Conditions

 

Loading Comments...
 

    loading Cancel
    Post was not sent - check your email addresses!
    Email check failed, please try again
    Sorry, your blog cannot share posts by email.