I sure ain't one of them hi-falutin tradin fellers y'all should look to for advice, but this here looks like one of them fancy pennants I've heard so much about.
Gold in Swiss Francs
Actually, it appears to have a cup and handle in place of a flag pole. But good enough for me.
The sideways movement of gold measured in Swiss francs obviously reflects the franc's growing strength vs. other currencies over the past year or so. Peter Schiff (and others) believe this is a sign the Swiss franc is replacing the dollar as a safe haven. I'm not so sure, though, that this isn't just a short- or intermediate term trend. Fact is, these are all fiat currencies we're talking about. None are backed by gold, but the US dollar is at least psychologically (and potentially more than psychologically) backed by the US military. Who needs gold when you have daisy cutters. All those unfunded liabilities and stuff we hear so much about, well, they'll probably just never be paid when push comes to shove; until then, we'll surely watch the median standard of living here slowly decline. But, something tells me the US military will survive any economic eventuality just fine. Probably come out stronger, when all is said and done.
But that's just depressing. So, let's try to find some other way to tell if the Swiss franc is presently overvalued: by using that infallible economic indicator, the Big Mac index. Let's say I buy a Big Mac at JFK airport on my way to London. When I get to Heathrow, I sell it (properly refrigerated during the flight of course) for X pounds to a Londoner (who's unwilling to pay more than the market price). Well, that should set the exchange rate between the currencies. If I can sell the Big Mac for a profit (i.e. sell it for X pounds, then convert the X pounds into more dollars than I paid for it) then the dollar is undervalued relative to the pound. And vice versa.
Using that criterion, it's amazing to see how seemingly overvalued European currencies are, especially Swiss and Scandinavian ones. If I go into a McDonalds in Norway with a Big Mac I bought in America, pretend I work there, and sell it to a Norwegian ("Sold to you, sucka" as Kid Dynamite might say), I can convert my kroner back into dollars and buy 2 Big Macs when I get home, plus maybe even a little something from the evil Mickey D's dollar menu.
Below is a the % profit I'd make in various countries (blue bars) via Big Mac arbitrage. I also adjusted for the Gini coefficient, which measures income inequality in the nation, as a way to account for the fact that some nations have poor underclasses that are more willing to work for dirt cheap (red bars). When I do this, the Swiss franc seems the most overvalued of all.
Maybe that's why McDonald's is hiring?