Is a global currency war coming?

The Swiss National Bank (SNB) shocked markets on Thursday by announcing that it would no longer hold the value of the Swiss franc down at 1.2 per euro, although it would lower interest rates from -0.25 to -0.75 percent. Mayhem ensued. The Swiss franc immediately shot up as much as 39 percent against the euro, before settling at "only" up 17 percent on the day. This is basically the biggest single-day move for a rich country's currency, as economist David Zervos points out, in the last 40 years. And it's sent Switzerland's stock market down 10 percent, as its suddenly more expensive currency will cripple its exporters by making their goods more expensive abroad...

Now let's back up a minute. Why was Switzerland pushing its currency down, and why has it stopped now? Well, in four words, it's the euro crisis. Back in 2011, you see, what looked like the imminent end of the euro made people want to move their money to the safety of Swiss banks...

Switzerland is still stuck in deflation, with prices falling 0.3 percent, and a stronger currency is only going to make that worse. Now, they tried to offset this by charging people even more to hold their money in Switzerland—aka negative interest rates—but that wasn't nearly enough to stop the Swiss franc from going vertical... 

More at the link and more at this Bloomberg Business Week article.  This is a big deal for those outside of Switzerland who purchase Swiss products and for those who have their mortgages demoninated in Swiss francs.

It's also the first time I remember encountering negative interest rates.  How does that work?  You deposit your money and they take a little away each week?

Addendum:   I posted the above in January of 2015.  This past week I saw an article in the telegraph entitled Sweden cuts rates below zero as global currency wars spread:

Sweden has cut interest rates below zero and launched quantitative easing to fight deflation, becoming the latest Scandinavian state to join Europe’s escalating currency wars...

The move comes as neighbouring Denmark takes ever more drastic steps to stop a flood of money overwhelming its exchange rate peg to the euro and tightening the deflationary noose. The Danes have cut rates four times to minus 0.75pc in a month to combat fall-out from the European Central Bank’s forthcoming QE...

Exchange rate mayhem in Europe is matched by a parallel saga in Asia, where Japan’s vast monetary stimulus and barely disguised efforts to drive down the yen are causing heartburn in China...

The Riksbank insists that the only motive is to stave off deflation but there are widespread suspicions that Sweden is in fact protecting its industrial and export base. It is no stranger to controversy. The oldest central bank in the world, it took radical action early in the 1930s to liberate Sweden from the constraints of the Gold Standard. Its prescience shielded the country from the worst of the Great Depression.

Stephen Lewis from Monument Securities says the emergency actions are getting out of hand: “The chief threat from a global currency war is that it will lead central banks to take up monetary stances so extreme that they damage the smooth functioning of financial markets. It is remarkable that they should be closing their minds to the possibility that they are undermining the basic motive to save and invest as they blindly wage their currency wars.”

This isn't front-page news in mass media.  One hopes it doesn't become such...

Please feel free to offer advice in the Comments as to what an ordinary person should do in such circumstances.