Peter Schiff, the one-time Senate candidate and controversial CEO of Euro Pacific Precious Metals, says gold, the Swiss franc and the Japanese yen are the preferred alternatives to the dollar. All three surged in August, yet Schiff notes the franc and the yen are being actively devalued by central banks that are “desperately and foolishly” trying to curtail appreciation.
“Looking to Europe, the Financial Times now has the awkward task of reporting that the mighty European Union currency is coming apart at the seams,” he writes in commentary released Friday. “The franc is up 5.41% against the euro this year and almost 14% against the dollar. One wonders if the only way to prevent a collapse of these major debtor currencies is to back them with Swiss-made wristwatches.”
Unfortunately, he adds, the Swiss National Bank is so afraid of the franc’s rise that it has flooded the market with liquidity and cut interest rates to zero.
“The SNB even recently threatened to peg the franc to the euro,” he writes. “It’s as if survivors on one of the Titanic’s lifeboats were so confused and bewildered that they began tying their boat to the sinking behemoth out of a desire for a ‘stable relationship.’”