Considering Currency Devaluation

The downside is…didn’t it hurt many mortgage holders having swiss franc denominated loans? Swiss franc denominated mortgages are supported by property investors worldwide with the elite Chinese, Middle Eastern and Russian parking money in Switzerland indulging in second homes, with posh locations like Monaco.

{If your home currency is the euro or euro-based and you held a mortgage loan denominated in Swiss Francs, your debt payment jumped almost 18%}

For these mortgage holders, this revaluation struck panic switch to another currency. Gone were the days when the Swiss francs were the sweet haven investment.

In this time and age when financial stability gets shaken by the aftermath of world economic shockers such as currency devaluation and/or revaluation, more financial threats are expected to unfold.

IMF managing director Christine Lagarde quoted the following on looming growth inconsistencies: “Too many countries are still weighed down by the legacies of the financial crisis, including high debt and high unemployment. Too many companies and households keep cutting back on investment and consumption today because they are concerned about low growth in the future.”

In fact, the United States is the only major economy that is likely to buck the trend this year, while others are being held back – mainly by lackluster investment. A promising recovery continues in the UK, but growth remains very low in the Euro Area and Japan. And emerging economies, led by China, are slowing down, relatively speaking.

Overall, we believe that global growth is still too low, too brittle, and too lopsided.”