The Franc Is too Damn High

As the US and Europe continue to struggle with their debt and deficit crises, Switzerland is beginning to feel an economic downturn as well. Exports are dropping off, manufacturers are struggling, and their central bank is trying desperately to keep their currency under control.

What is the problem in Switzerland? Their currency is strong....too strong.

Due to the fall of the Euro and Dollar over the past year, the Swiss Franc, historically regarded as one of the most stable currencies in the world, has seen its value skyrocket against the two major currencies. The reason for the strength is because they have a comparably competent government:  Their debt is a mere 53% of GDP, thanks to government surpluses the past two years, and projected surpluses every year until 2015. Unemployment in the country is also a tale of its economic strength, which sits at a paltry 3%, and the nation's GDP is expected to grow by 2% next year. As a result, the Swiss Franc has become a safe haven for investors worldwide, as more and more people are putting their money into Swiss bank accounts.

Why Gold Prices Are Setting New Records

With gold prices nearly doubling in the past 3 years—recently surpassing $1500 an ounce—one might be wondering:  How high can it go? The Daily Reckoning believes gold prices still have  the potential to reach even higher numbers and are urging people to invest in precious metals sooner rather than later:

We don’t expect the gold price to soar because gold is such a great thing; we expect it to soar because the world’s major currencies are not such great things. A dollar bill looks good, only when you place it next to a euro or a yen. But all three look sickly when you place them next to a bar of gold.

Gold has a 3,000 year track record compared to the terrible paper trail of inflation by fiat currencies and central banks. The problem with the dollar is, as The Daily Reckoning states, “there’s too much credit and not enough faith.”

Even as Moody’s and Standard & Poor’s threaten to downgrade the United State’s credit rating, politicians in Washington seem to be ignoring the signs that spell out the end for the dollar. David Galland points to five signs that point to fiscal disaster for the United States if drastic cuts are not enacted very soon:

1. Europe is becoming more fragile and desperate for bailouts.
2. Politicians will not admit the scope of the debt problem and refuse to abdicate Keynesian economics.
3. China’s faulty economy can set off large consequences for the United States.
4. Japan is caving under their debt and nuclear problems.
5. The Middle East is in chaos.

These signs warn of tough times ahead for future generations if the debt problem isn’t taken seriously. The government has steered the economy straight into an iceberg; only the market can effectively navigate a course towards prosperity.

What is Your Currency of Choice?

Shouldn't you have a choice? What is valuable to you? Do you love paper so much that you'll work 40 hours a week for it to put food on the table?

More at www.silverunderground.com.

Senators DeMint, Paul, and Lee Introduce Sound Money Promotion Act

With the continued devaluation of the dollar and the nationa's building debts and deficit, the push for sound money backed by precious metals is slowly gaining steam and recognition in Washington. What began as a philosophical rather than practical debate is now turning into a serious discussion about the fate of the Dollar and has put the Federal Reserve's monetary policies under intense scrutiny, more than deserved given its insistence on being secretive about its power over our currencies and reports of bank bailouts without Congressional approval.

This past week, Senators Jim DeMint (R-South Carolina), Rand Paul (R-Kentucky), and Mike Lee (R-Utah) introduced the Sound Money Promotion Act, which would make "gold and silver coins declared legal tender by the federal government or any state government...not...subject to taxation." This bill comes after Utah's legalization of gold as legal tender two months ago, which many in the sound money movement consider a huge victory in the fight to put America's currency on a more stable, less inflationary path.