links for 2011-08-29

Switzerland's economy wouldn't be able to cope with it if the euro dipped below 1.1 francs, Sturm warns. For this reason, the Swiss National Bank has attempted to get the franc back to a reasonable level by flooding the market with freshly printed money and thereby devaluing the currency.

"Given that even the Swiss are considering adding liquidity to the market, gold as a currency that can't be printed has a certain attraction"….Analysts say gold's appeal is enhanced as the SNB's actions have caused short-term deposit and money rates in Switzerland to turn negative…Once seen as a hedge against weakness in the dollar, gold is increasingly perceived as an alternative to paper currencies in general as central banks seek to keep their currencies weak via quantitative easing or through intervention…Bank of New York Mellon currency strategist Simon Derrick argues that gold's long-term ascent that began in 2001 coincided with the Bank of Japan's quantitative easing program that began that year and went on until 2006. "Gold is a flight from currency debasement…It's not gold going up, it's developed currencies going down."