I’ve witnessed strange things in 35 years as a financial journalist. But never before witnessed a 20% overnight surge in a currency – and been on the ground asking questions in the country where it happened. So visiting Switzerland after last week’s dramatic jump in the Swiss Franc is eye opening.
For one thing, on the train between Zurich and Davos today, two disposable cups with hot water plus two teabags cost me R122. Switzerland has long been expensive, but it’s now getting ridiculous. And while some here are rejoicing at the sudden improvement in the value of their savings, Alpine resort hoteliers (and others in the tourist trade) are deeply concerned. Their Swiss customers are simply switching to Austria or Germany where they pay 20% less and get to claim back 18% VAT.
For me, the Swiss currency shock emphasises two things. As Nassim Taleb warns, we must always include the risk of Black Swans. Also, it’s a reminder how big economic moves affect us all – sometimes dramatically. Life is uncertain. And complex. And, very often, extremely difficult. Paradoxically, appreciating this actually makes life easier.
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