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.
One thing is
clear in a world of fiat currency
hot-money. One country cannot stand alone pursuing prudent monetary policies, at least if it aims to be politically
correct and avoid being ostracized from the clubby world of central banking.
But this outcome is not a surprise. I wrote
about it this past March and illustrated my point with charts showing gold’s hyperbolic trajectory in four currencies,
including the Swiss
Here are the same
four charts from that March 28th article updated
The above charts are in
essence identical. The rate at which these
currencies are being debased varies, but they are
all headed in the same direction.
This point is clear from the following chart that presents
a Base-100 analysis of gold’s
appreciation this decade against these four currencies.
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 numéraire – 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.