Opinion: Swiss franc capitulation and oil price drop mean we are suddenly cheap
People
line up at a currency exchange office in Geneva last Friday. ‘One of
the richest, most stable and economically successful countries in the
world was forced to abandon policies it deemed to be in its best
interests.’ Photograph: Martial Trezzini/AP Photo/Keystone
The way in which the markets overwhelmed the Swiss central bank is eerily reminiscent of exchange rate crises of a bygone era.
The adoption of the euro brought to an end the recurring currency
crises that afflicted us every few years. But one form of instability
had merely been swapped for another rather than being eliminated: we
enjoyed the luxury of never-needing reserves to defend an exchange rate
but acquired new banking instabilities that will haunt us for years to
come... (Read more)
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