The Advantage of the Swiss Franc

Warren Buffett says he worries about all currencies.

However, if he were forced to convert his U.S. dollars to another currency, he would choose the Swiss franc, the billionaire investor told CNBC's Squawk Box on Monday.

There are advantages to the Swiss franc.

The Swiss economy, compared to its euro zone neighbors, is fundamentally sound. Unemployment is below 5 percent and the government has a budget surplus. Tuesday, it reported that the economy grew 0.7 percent, beating estimates of 0.4 percent.

In the same quarter the euro zone grew 0.1 percent, while the U.K. grew 0.3 percent.

More importantly, however, the advantage of the Swiss franc is that its underlying economy is free of the pressing economic and political issues that plague Britain the euro zone.

Euro

In a monetary union, such as the euro zone, tensions arise when frugal members essentially subsidize the spending of profligate neighbors.

Greece has been living extravagantly beyond its means, accumulating a grossly high debt.

If Greece had its own currency, it would drop in value. As a result it would become more expensive to buy goods from abroad and less expensive for foreigners to buy its goods.

The net effect is that goods and services flow out of the country, thus restoring some balance.

Since there is a monetary union, however, countries such as Germany are subsidizing Greece's spending.

In response to this problem, the EU has tried to force harsh austerity measures on Greece. However, it is a politically difficult task because it potentially infringes upon its sovereignty.

In addition, there has been stiff resistance against the austerity measures from Greek workers and also resistance against a bailout of Greece from euro zone citizens.

Pound

The pound is being pressured because the U.K. government is facing the tough balancing act of cutting its ballooning budget deficit and avoiding a double dip recession.

Another problem is the potential that the government will be limited in its decision-making ability because of a hung parliament.

Over the weekend, a poll showed that the Labour Party is gaining against the Conservatives, narrowing their lead ahead of the general election.

The pound sold heavily on Monday, losing as much as 300 pips against the dollar during the European session.

The Majors

The U.S., Japan, U.K., and the euro zone face daunting economic challenges that are complicated by politics.

Switzerland does not face any obviously glaring economic problems.

With the exception of currencies whose economies are rich in commodities, the Swiss franc is perhaps the most attractive among the majors.