SWITZERLAND: Prosperous Recession

Except perhaps for gold, no monetary asset has quite the mystique of the Swiss franc. Since 1970, it has gained 74% in value against the dollar, more than 130% against the British pound and Italian lira, and even 23% compared with the almighty West German mark. The franc's strength is usually attributed to Switzerland's social and political stability and its reputation as a haven for funds of all sorts. Recently, the value of the Swiss franc has also been boosted by some economic successes that are the envy of most other nations.

Switzerland's inflation rate over the past year, for example,...

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