Tom Keene Talks to Société Générale’s Kit Juckes

Tom talks with Kit Juckes, head of foreign-exchange strategy at Société Générale, about safe havens

The International Monetary Fund meets in Washington on Sept. 23. What should we expect?

The IMF has a lot at stake now that they are financing Greece. And the biggest IMF backer is the United States. So we are all in this, and I think that coming up with a better plan for how we stop the contagion around Europe is something we should see. My fear is a bunch of suits produce some optimistic words, but not much of a plan.

With all the risk out there, what do we do with our money?
Until this storm passes we are still trying to find safe places to keep our money as opposed to places where we will make a return on our money.

What are the safe havens out there? The dollar? Norway’s krone?
When people think of a safe haven, I think we have to differentiate between a place where you can put your money and they are not going to devalue it or a currency that is a beneficiary of liquidity. The U.S. has the world’s only viable reserve currency in the sense that the world still depends to a greater degree than people imagine on dollar funding for day-to-day business. So when no one wants to lend any money to anybody else, that is going to be supportive to the dollar. The problem with Norway is that it is a small economy. And while it can benefit near term from having a huge current-account surplus, if it starts to weaken, the door to get out is going to be very narrow if we are all trying to get out at the same time.

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