It’s name is just a safe haven, it means it is a protection or a safe refuge. Just as in a state of war or chaos, the citizens will flee to a place, where it is considered the most secure.
In the market, too, the term safe haven or safe assets often arise. This refers to the rush of investors toward investment instruments that are considered safe, especially in the current market turmoil.
In the past year, gold is considered a safe haven. This is due to the position of gold as a precious metal that the world demand, and supply rare and intrinsically valuable.
Gold is considered as an investment destination, whose value will be difficult to degenerate because of the uniqueness of this precious metal. Swiss francs, in the last three years is also considered as a safe haven, because the policy of the Swiss economy is very careful, strong exports, and debt position which is not harmful like its neighbors in the euro zone.
With a strong economic policy, Swiss francs or less the same with the German mark, which in the past has always been strong and prolonged stable. This is also due to economic policy and productivity of Germans are commendable, even though up to now plagued with fellow colleagues euro zone, such as Greece.
Now comes the position of the U.S. dollar as a safe haven. In the last 10 years the U.S. dollar exchange rate fell sharply against the various currencies of the world due to economic bankruptcy.
Olivier Blanchard, IMF senior economist, has warned that the state of the U.S. economy and the eurozone are now no better than in 2008.
Then why is the U.S. dollar, which also strengthened against the euro, is considered as a safe haven? The U.S. economy will continue to be burdened in the future debt payments. Rating agency Standard & Poor’s had already downgraded the long-term U.S. debt from AAA to AA +. That is, the risk on debt payments in the future the U.S. is no longer as strong as before.
Therefore, the position of the U.S. dollar as a safe haven is very dubious and not worthy of trust for granted.
