The problem with currencies is that the safest options usually don’t offer a big reward. At least with top tier stocks you’re usually receiving a dividend. Nevertheless, let's take a look at the safest currencies in the world. There is actually one surprise cu♈rrency that does have significant upside potential over the long haul. 

Forward Looking Approach

Let’s remove day-to-day 澳洲幸运5官方开奖结果体彩网:exchange rates from the equation and take a 澳洲幸运5官方开奖结果体彩网:forward-looking approach. The U.S. dollar is the biggest enigma to investors at the moment, but there are logical reasons for its behavior: 澳洲幸运5官方开奖结果体彩网:Interest rates are likely to increase later this year. With 澳洲幸运5官方开奖结果体彩网:quantitative easing coming to a close, investors are piling bღack into the U.S. doll𓆏ar.

The 澳洲幸运5官方开奖结果体彩网:European Central Bank (ECB) plans on purchasing $1.16 trillion in public and 澳洲幸运5官方开奖结果体彩网:private sector bonds by 2016. This will primarily be done in the larger economies: Germany, France, and Italy. Aside from Germany, the Eurozone is suffering from high unemployment, and it’s hopeful that injecting money into the economy will provide an assist. Either way, this won't help the euro against the U.S. dollar.

The 澳洲幸运5官方开奖结果体彩网:Bank of Japan (BOJ) recently upped its annual purchases of 澳洲幸运5官方开奖结果体彩网:government bonds to 80 trillion yen from 60-70 trillion yen. The Japanese are fighting hard against 澳洲幸运5官方开奖结果体彩网:deflation. Unfortunately, t🥃hey🏅’re not realizing that you can’t stop deflation, especially when you have the oldest consumers in the world. Once again, this move will not help the Japanese yen against the U.S. dollar.

Based on the points above, we can see that the U.S. dollar is likely to appreciate (for now) and that the euro and Japanese yen would be at high risk. In regards to the euro, the 澳洲幸运5官方开奖结果体彩网:Swiss National Bank (SNB) recently abandoned its 澳洲幸运5官方开奖结果体彩网:currency peg to the euro—a sign of no confidence.

U.S. Dollar

As far as the U.S. dollar is concerned, it looks like a great bet at the moment, but U.S. dollars are 澳洲幸运5官方开奖结果体彩网:Federal Reserve notes. Now consider that the Federal Reserve has $2.2 trillion in Treasury debt and $1.5 trillion in 澳洲幸运5官方开奖结果体彩网:mortgage-backed securities.

The U.S. dollar is currently in bull mode, and that’s likely to last for a considerable amount of time. On the other hand, while the Federal Reserve is capable of bailing everyone out, eventually, who’s going to bail out the Federal Reserve? The answer to that question might irritate you because the answer is likely going to be you, the taxpayer. That said, the United States is very good 🔯at finding ways to win, and there’s no telling what creative ideas those in power will come up with next. Hopefully, a creative solution will be found. But is tha🔯t something you want to bet on? Probably not.

Norway And Singapore

澳洲幸运5官方开奖结果体彩网:The Norwegian krone has been known as a 澳洲幸运5官方开奖结果体彩网:safe currency, thanks in large part to Norway having no net debt. The Norwegian krone is also a standalone currency, which means it’s not tied to another country’s failures. The krone🍒 hasn🔯’t been performing well as of late due to economic data not meeting expectations and falling home prices. The latter has slowed the consumer. However, with a disciplined and responsible system in place, it should remain a good long term bet.

Then there’s the 澳洲幸运5官方开奖结果体彩网:Singapore dollar, which has been attractive to investors because Singapore is now seen as the place to hide money for tax reasons♉. There might be an opportunity here, but since this investment wouldn’t be based on something sustainable, consider avoiding it.

Then there’s that other currency referred to above,💃 which has y🙈et to be covered.

Gold

According to Dictionary.com, the definition of currency is as follows: “Any form of money in actual use as a 澳洲幸运5官方开奖结果体彩网:medium of exchange.” Therefore, gold applies. The best attributes of gold are that it can be bought and stored, ಌit is easily converted to almost any curre📖ncy making it highly liquid and it has a limited supply.

That last point is especially important because it separates gold from all the 澳洲幸运5官方开奖结果体彩网:fiat currencies (not backed by a physical commodity) around the world. Many people want to go back to the 澳洲幸运5官方开奖结果体彩网:gold standard, but others will argue that 澳洲幸运5官方开奖结果体彩网:the gold standard didn’t work either. The truth is that no system is foolproof. While the gold standard had its short-term fluctu♒ations (expected), it lasted for well over a century, as well as periods of time prior to the 19th century.

The problem with investing in gold today is that the U.S. dollar is in favor, which usually trades inversely to gold. Even if the 澳洲幸运5官方开奖结果体彩网:stock market and/or economy tanks, gold isn’t likely to hold up because all 澳洲幸运5官方开奖结果体彩网:commodities come down in a deflationary environment. If you look at our small stint of deflation during the 澳洲幸运5官方开奖结果体彩网:financial crisis, you will see that gold suffered prior to the Federal Reserve stepping in. That said, once deflation is realized and accepted, as opposed to just fear, the economy should begin to bottom. It will take time (perhaps years), but this should present a great opportunity to buy gold. When 澳洲幸运5官方开奖结果体彩网:organic growth returns, 澳洲幸运5官方开奖结果体彩网:inflation will ramp up, which will make ജgold intriguing. In fact, gold could hit new highs.

The Bottom Line

A perfect cu✤rrency doesn’t exist. If you want to invest in the U.S. dollar, then you’re timing better be excellent. If you want to invest in the Norwegian krone, it’s safe, but there isn’t much upside. The Singapore dollar? This could p✤resent rewards, but it’s not based on honest and sustainable policies. Gold is probably the best bet, but not at the moment.

Dan Moskowitz owns shares of Market Vectors Double Short Euro ETN (DRR).