Zurich, Switzerland

When I first discovered the fascinating world of financial markets in 1988, I quickly learned about the value of the dollar and its long-term relationship versus gold. I also learned how the Swiss franc – the strongest currency against the dollar in Europe – was the best paper money to have in your pocket.

The Swiss franc is still a good currency relative to the majority of paper trash still circulating in the world, but it isn't a beacon of strength, either.

The Swiss franc is no longer a safe haven currency. Though it did play that role in the worst of the financial crisis starting in late 2007, the Swiss currency has failed to maintain its relative purchasing power vis-à-vis gold since 2001 (see gold in Swiss franc terms above).

Since late 2001 when the dollar peaked, the Swiss franc has gained a cumulative 36%. This compares to gold rising a cumulative 130% in Swiss franc terms or from 4.5 to 10.35 now. The Swiss franc has lagged behind gold this decade. That's not a surprise. Since 2005, all currencies are trailing bullion as the yellow metal continues to rally. Gold hasn't recorded a losing calendar year since this rally started almost nine years ago.

The Swiss franc is also facing stiff headwinds from the Swiss National Bank (SNB).

Like most central banks, the SNB doesn't want a strong currency. Since March, the SNB has announced its own version of "quantitative easing" while pursuing a strategy of selling the franc in the open market in order to depress its relative value.

Many Eastern Europeans have been badly hit by local mortgages denominated in Swiss francs earlier this decade – a ridiculous speculation that has backfired since the credit crisis emerged. The Swiss seem adamant about keeping a lid on the franc and I think it's obvious they want it competitive for other reasons, too.

The Swiss franc is still a good currency – much better than its peers. But in this world of competitive devaluations and the slow death of the post-Breton Woods exchange rate mechanism, the franc is no longer a bastion of strength. Today, that role has been replaced by gold.

Have a good weekend. I'll see you on Monday.