Old Project Avalon Forum (ARCHIVE) - Might be a good idea to buy Swiss Francs

Inside Money Moves (Currencies)
Stuart Wilde

The members that followed my advice on gold made serious wonga as it went from $580 to $1000+. It's about $970 right now. I know two people that made several hundreds of thousands, and many of the Stuie Wilde people made 10K+ or more.

All the currencies look weak, as governments create trillions of new paper units to try and save the economies from going into recession. In simple terms here is how to understand it.

Let us say all the infrastructure and real estate and businesses in the USA are worth $1000 and there are 1000 dollar bills in circulation. Then every dollar bill is backed by a dollar in real assets. Now if the government prints another 1000 dollar bills, making a new total of 2000 bills in circulation, then each of the dollar bills that now exist has only 50 cents in assets backing it.

In the US, the infrastructure is crumbling, and the real estate has gone down 25% and more, and the businesses quoted on the stock exchange have fallen about 35%. So even if there were no new dollars in circulation and we had only the original hypothetical $1000 mentioned above, those dollars would be worth less, as now the underlying hard assets have fallen in value.

So the real value of the USA is declining, and the amount of dollars in circulation is climbing into trillions upon trillions, so each and every individual dollar must fall dramatically in the end.

The same law of decreasing hard assets and increasing paper in circulation applies to sterling, euro and the yen.

This is the simple man's guide to how it works of course, as there are many other complicating factors that affect the value of a currency. But what is important is that the perception of what a country is actually worth in relation to how many currency units it has created/generated is what creates value or lack of value.

The International Monetary Fund was created to stabilize currencies and help world trade. It is highly criticized for given money to sustain many dictatorships. The Swiss franc, known to traders as the CHF was originally backed all in gold, but the Swiss joined the IMF in 1992, and they were required to sell all their gold in 1996 as the IMF doesn't want strong currencies backed by gold up against the dollar and its other basket cases that are essentially becoming worthless.

Recently the Swiss have started buying back gold and now their currency is 43% covered by their gold holdings, which makes it a very steady proposition. People think the Swiss will leave the IMF soon.

The Euro is set to plunge against the Swiss franc, so the ex Redeemer's Club members that I talk to on these things and I have begun to shift out of Euros into CHFs ASAP.

The CHF pays about 1/4% interest, so you don't really get interest on your savings, but if the Euro falls from 1.50 to the Swiss franc today, down to say par, one-for-one eventually, then you will have made 50% profit on your switch. Now that is rather interesting.

More money stuff later. (SW)

Swiss Gold Holdings

Swiss Franc (CHF)/Gold Relationship

Swiss Monetary Base 12/2008 = 77,418,000,000 CHF

Gold Reserve = 1,290.1 Tons

1 Ton = 32,150.74 ozs.

1,290.1 Tons = 41,477,669.67 ozs of Swiss Owned Gold

1 oz of Gold 12/2008 = 869.75 USD (30th Dec 2008)

Exchange Rate USD/CHF = 1.06 (30th Dec 2008)

1 oz of Gold in CHF = 820.52

41,477,669.67 oz X 820.52 CHF = 34,033,210,565.06 CHF worth in Gold

77,418,000,000 CHF / 34,033,210,565.06 CHF = 43,96%

So Swiss money is backed by real worth, not pie in the sky. When the world panics they will move into the CHF with a flurry. We will be there with open arms with hopefully lots of CHFs to sell at a profit. (SW)