To see the winners in a global currency war, all you have to do is look East — three of the biggest winners will be Asian nations, but China is not among them, according to investment adviser James Gruber.

Gruber, a former Asian fund manager for AMP Capital and founder the investment newsletter Asia Confidential, pegs Singapore as the winner due to sound fiscal policies by the government there. He also likes Thailand and Malaysia.

As for supposed currency safe havens, such as Australia, China, Canada, Norway and perennial favorite Switzerland, Gruber does not see them faring as well.

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In his latest investment letter, Gruber writes, “The broader issue is simple: the developed world has too much debt and to reduce this debt, they want to create inflation and depreciate the value of their currencies (thereby reducing the value of the debt).

“It’s not going to be able to grow its way out of the debt or cut spending enough to make the debt more manageable.”

Singapore leads Gruber’s winners list, in part because it is now the world’s third-richest in terms of gross domestic product (GDP) per capita and has a topnotch balance sheet with a large current account surplus, a balanced budget, a high savings rate and zero foreign debt.

Most importantly, he says, “Singapore has refused to engage in the stupidity of quantitative easing (QE) with which the rest of the world is enthralled.”

Gruber said Thailand is a good long-term bet because that country is emerging from a long period of stagnation, it will benefit from trade with emerging Myanmar, it is building a low-cost industrial base that will rival China and it has achieved political maturity.

He said Malaysia is a higher risk as a currency winner, but could be inspired by the impressive growth of its neighbors such as the Philippines and Indonesia.

As for the supposed safe havens among the “commodity currencies” of Australia, Canada and Norway, Gruber predicts that within five years the commodity bull market will end, and those nations’ currencies will be under threat.

Meanwhile, China’s currency future is not as bright as many observers believe. “One of the most overlooked developments has been slowing foreign exchange reserves in China,” he said.

And Switzerland’s monetary policies are harmful, Gruber noted, adding that “over the past four years, the country has gone mad. It’s printed so much money that foreign exchange reserves [have] gone up 7x, now equivalent to 70 percent of the country’s GDP.”

Analysts believe a real currency war is under way, as major economies take action either verbally or through monetary intervention to weaken their currencies and keep them competitive, according to CNBC.

China has been less vocal than other major economies in voicing discontent about a steep slide in the Japanese yen, CNBC reported. But Beijing is now taking action behind the scenes to head off unwanted pressure on the yuan to appreciate.

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