ROBERT SIEGEL, host: The world economy is so messed up right now that even healthy countries are facing a strange kind of crisis. They've become too popular with investors. Take Switzerland, it used to be known as a little place that made great cheese, had a lot of cuckoo clocks and discreet bankers. Well, now, investors are buying up its currency, the Swiss franc, as a safe place to store their money. The problem, as NPR's Robert Smith reports, is that all this money is ruining life for the Swiss.

ROBERT SMITH: Investors are like animals. When they're scared, they run. But these days, where do you go? The Unites States is in hock. Europe is drowning in debt.

CHARLES WYPLOSZ: So what's left? Well, gold and tiny Switzerland.

SMITH: That's Charles Wyplosz, who happens to be in Switzerland. He's an economist at the Graduate Institute of International Studies. And he says think about it: Unlike the rest of the world, Switzerland is growing. Unemployment is only 3 percent. And most importantly, it doesn't use the euro as currency. It can't get dragged down by all those problems you've heard about in Greece and Portugal. It sounds like good news. But not so fast.

WYPLOSZ: In a way, the Swiss are victims of their impeccable management of their economy.

SMITH: Hear that? Victims. Because while it's great to be loved, a small country can only take in so much money. So many people have wanted to convert their cash to Swiss francs that the value of the currency has skyrocketed - supply and demand. If you compare the Swiss franc to the U.S. dollar, the franc's value is up 30 percent over the last year. And here's the problem. If an American wants to buy something from Switzerland - a nice Gruyere, a Rolex - it's much more expensive than it was a year ago. For exporters in Switzerland, this is devastating because fewer people want to buy Swiss products.

IVO ZIMMERMAN: The only thing that really helps the industry now, the export industry is a weaker Swiss franc. That's the only thing that really helps.

SMITH: Ivo Zimmerman represents small engineering companies in Switzerland. And he says, sure, currencies always drift up and down, and the world eventually adapts, but...

ZIMMERMAN: When it happens that quickly for a company, it's impossible to, let's say, do innovations in that short period which can compensate the disadvantage.

SMITH: In fact, Swatch - the giant watch company - says its profits are down 12 percent because the Swiss franc is so strong. Now, there's usually an upside to having such a strong currency: Imports become cheaper. And we're already hearing about some of this. Supermarkets in Switzerland say they've cut their prices up to 20 percent. But I talked to Ville Heimgartner, a 24-year-old student in Switzerland, and he wasn't yet seeing the big price drops.

VILLE HEIMGARTNER: Supposedly, yeah. But that's not what happens. More or less, the products more or less stay the same.

SMITH: But that means that somebody is making a lot of money off you.

HEIMGARTNER: Yeah, exactly. That's what happening. So like if I go clothes shopping, I probably wouldn't go now like to Switzerland. I probably would go over the border and buy something there.

SMITH: Across the border to Germany, where the strong Swiss franc means a much better deal. In fact, Ville says, as he drives by Swiss shopping centers on the way to Germany, he sees empty parking lots and lots of Swiss cars in Germany. So there's that old saying: You can never be too rich or too thin. Well, it turns out your currency can be too strong. But economist Charles Wyplosz says there isn't a lot the Swiss government can do.

WYPLOSZ: There is a huge storm in the world, and how high can they build dikes to prevent waters from flowing in?

SMITH: The government can't stop investors from buying the Swiss franc. But they can make it less attractive. For instance, they've reduced interest rates so foreigners won't make a big profit off their francs.

WYPLOSZ: I don't think that it's going to work.

SMITH: Wyplosz says only two things can solve this imbalance. Either the world economy gets better or the Swiss economy gets worse. And with exports hurting, the Swiss miracle is already slowing down. In other words, investors might be destroying the very thing they love about Switzerland in the first place. Robert Smith, NPR News.

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