Issue #413: Tuesday, March 17, 2009

Also In Today’s Letter…

• Surely the Swiss Franc is Better Off than the Euro…Right?”
• “What Currency Do You Recommend Over the Next 2 Months Chuck?”

By Chuck Butler Indeed, it is a terrific Tuesday (and not just because I woke up in South Florida once again this morning!).

It’s St. Patrick’s Day! And a Happy St. Paddy’s Day to one and all! All over the world today, the Irish and would-be Irish alike will be celebrating (some all day). In Ireland, they’ve already been celebrating – for the last four days. And here in the U.S.…think green beer…green Mardi Gras beads…great Irish music…even bodies of water dyed green depending on where you woke up this morning.
And yours truly will be kicking back, with a Budweiser in hand at the Cardinals spring training game down in Jupiter this week (so you could say I have the luck-o-the-Irish today too!).

If you tuned in yesterday, then you know I’m answering your questions this week …partially because I think we could all use a break from the bad news that’s ravaging all the financial markets…and partially because I’m on vacation so this is a nice way to keep in contact with all you dear readers from the road.

So without further ado, onto your questions…

1. The Swiss franc seems to move in tandem with the euro, especially against the dollar. Why is this? Surely the Swiss economy is sounder than the average euro country. Or is it? –R.P.

The Swiss economy is in peril, just like most economies in the world today. Swiss banking has gotten hit with losses from loans to Eastern European entities. Switzerland is also very small, especially considering the neighboring European Union.

As I tell people all the time, the euro is the Big Dog on the porch. All the other currencies don’t come off the porch to chase the dollar car down the road, unless the Big Dog goes first.

2. Can you give me an update on what’s happening with the NZ$, New Zealand’s economy, etc? -S.B.

New Zealand is much like the U.S. but obviously on a smaller scale, in that it has twin deficits… Budget and Trade… Interest rates, which were once the highest in the industrialized world, are now reduced to levels, not thought of a year ago. The NZ$ is suffering from the lower interest rates.

3. What currency do you like over the next 2-4 months? –B.A.

I think going forward the one currency I would recommend is gold. Then you’ll want to look to the currencies from countries that did not get mixed up in the global meltdown… Norway, China, Canada, and to a lesser extent Australia come to mind.

That’s it for today! I hope your Tuesday is Terrific and your St. Patrick’s Day is Spectacular!
Chuck