Tuesday, September 6, 2011

Switzerland starts printing monies: US$2000 gold in view

Switzerland relented and will peg its currency with Euro. Bloomberg reports
The Swiss National Bank is “aiming for a substantial and sustained weakening of the franc,” the Zurich-based bank said in an e-mailed statement today. “With immediate effect, it will no longer tolerate a euro-franc exchange rate below the minimum rate of 1.20 francs” and “is prepared to buy foreign currency in unlimited quantities.”

After the announcement of QE2, MAS seems to intervene preventing USDSGD falling below S$1.20, at least for the middle term. On the event of QE3, USDSGD may drop to S$1. By then, either FDI portion of our economy is going to be in trouble. The alternative is, PAP can risk the wrath of the people by letting inflation run by maintaining the soft-peg of US$1 to S$1.2.

With such, CHF and SGD is no longer meet the criteria of safe haven. The winner of the currency war is -- Gold, the ultimate money. Its going to hit US$2000 earliest within this month, and gold at US$3000 is no longer unfathomable in next few years.   

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