The leading candidates have always been the Swiss Franc and the Yen, with gold, in the last three years usually being excluded, because of its declining trend against the dollar and the limited amount of stock relative to the availability of these currencies. It is distinguished by the fact that there is no forex safe haven currencies link between gold and national governments and their national currencies.
For governments, through institutions to individuals, gold is always money, even between enemies. In the last 40 years and more, the world led by the U. It is riveted to oil as the only currency with which oil could be bought. It has the largest economy in the world, until now, as China appears to be moving into that place.
But as 2014 closed and a volatile, dramatic 2015 and 2016 entered our lives, this is changing. With oil at less than half its peak value today, only half the dollars that were used in the past for oil are being used now. Add to this that payments for oil in currencies other than the dollar, particularly by China, are being made. This is massively reducing the need for the dollar, globally. With the euro crises throwing a smokescreen over the dollar picture, as euros are exchanged for the U.
Markets, market players and commentators tend to be myopic, focussed on short-term profits and only distracted when larger issues actually arrive. We feel that what is happening now on foreign exchanges is an early signal of much bigger issues that will appear in the next couple of years. The Yen hit its peak when it stood at 76 to the U. As Japan’s population ages and spending habits become conservative, the real function of a currency has become apparent. It is used to allow the local economy to function smoothly as the only local means of exchange.