BARROW ISLAND off Australia's north-west coast is a nesting site for flatback turtles and a sanctuary for other bright and beautiful creatures, such as the spectacled hare-wallaby and the golden bandicoot. It is also the site for a natural-gas plant that is expected to liquefy 15m tonnes a year from the onshore Gorgon fields. The site imposes tight quarantine controls to keep out weeds, pests and non-native species. The aim is to shield the island's ecology from any side-effects of perhaps the biggest resources project in Australian history.

No one, however, can quarantine Australia's economy from the side-effects of its resources bonanza. The boom has lifted the Australian dollar by more than 43% since the start of 2009, weighted by trade and adjusted for inflation. In July it bought $1.10, a record. Surging commodity prices have pushed up Brazil's real by even more (see left-hand chart). It hit a 12-year high against the dollar in July. This currency strength has pained manufacturers and worried policymakers.

Both currencies eased in early August, as America's recovery and credit rating fell into doubt. One currency that did not is the Swiss franc (see right-hand chart). Switzerland is blessed with a commodity prized more than iron ore or soyabeans in uncertain times: safety. As a haven currency, the franc strengthens when American share prices weaken, bond prices rise or the currency markets wobble, according to Angelo Ranaldo of the Swiss National Bank (SNB) and Paul Söderlind of the University of St Gallen. It rose by 3% against the dollar within two hours of the first plane hitting the World Trade Centre ten years ago. The franc is not such a haven for the country's exporters. Their sales fell by 3% in real terms in July. Brazil is a bigger, less open economy but its manufacturers are also suffering. In July the purchasing-managers index prepared by HSBC fell to its lowest level since May 2009, when the real was 25% weaker. In August, Australia's largest steelmaker, BlueScope, cited the Australian dollar as one reason for its decision to shut a blast furnace and a hot strip mill, at the cost of perhaps 1,000 jobs. Dutch courage This phenomenon is often called Dutch disease. The term was popularised, perhaps even invented, by this newspaper in 1977, in an article about the mismanagement of Dutch gas reserves. But is it necessarily a disease? Does the squeeze of manufacturing represent dangerous atrophy or natural adjustment? Exporters are in the business of earning foreign exchange. That is true whether they sell steel, aircraft or watches. If a country enjoys a windfall of foreign money from another source—from the gas it drills, the beans it grows or the reassurance it provides—then the country has less need of what other exporters have to offer. They should do something else instead. That is what the strong currency is telling them.

That stark message can, however, be distorted by speculative noise. A rally that begins in response to “fundamentals” might feed on itself, pushing the exchange rate up today for no better reason than the expectation it will rise tomorrow. Moreover, even fundamentals do not persist for ever. When the windfall is exhausted, countries have to relearn how to earn their foreign exchange the hard way. BlueScope Steel, to take one example, says it could reopen its shut furnace if the market turns in its favour. But in other cases, the manufacturing capacity lost when a currency rises might be hard to recover when the currency eventually falls.

In August the SNB said that “the massive overvaluation of the franc poses a threat to the development of the economy.” It proceeded to weaken the currency by greatly expanding the money supply and promising to take “further measures” if necessary. Some suggest the Swiss ought to announce a peg to the euro or engineer a negative nominal interest rate.

Rather than buying foreign exchange, policymakers can keep it out of the country, sequestering it abroad like a non-native species. They can, for example, tax the foreign earnings of commodity producers, ploughing the proceeds into a sovereign-wealth fund that invests in foreign assets. Julia Gillard, Australia's prime minister, has proposed a tax on mining profits but has ruled out a sovereign fund. She would prefer to put the money in Australians' individual retirement accounts, leaving it up to them to decide where to invest it.

If the source of the foreign exchange is inward investors, not exporters, a country can impose capital controls to deter them. Brazil now imposes a tax of 6% on foreign purchases of its bonds, as well as a smaller tax on bets against the dollar on the futures market. That has had some unintended consequences. The tax discouraged Japanese investors from repatriating money to Japan after its earthquake, because they did not want to pay the tax if they ever decided to return. In that instance, the fee stopped the yen, not the real, from rising.

Instead of trying to prevent a rise in the currency, countries can, of course, learn to live with it. In August Brazil's trade and industry minister Fernando Pimentel unveiled tax breaks, cheap credit and a misconceived government preference for buying local. That announcement may have signalled a shift from policies designed to defy the real's rise, to measures aimed at coping with it. The real may be overvalued, but with commodity prices as high as they are, it will never be cheap. “We will have a strong currency for a long period of time,” Mr Pimentel said. “Businessmen will have to get used to that.”

In Switzerland, some already have. Its renowned watchmakers increased the value of their exports by over 20% in the year to July. They prosper in niches where customers prize quality over price. Their success can perhaps provide some encouragement to other firms, in Switzerland and elsewhere, that are shrouded in gloom. One industry representative, quoted by the Swiss Broadcasting Corporation, recently gave warning that for many manufacturers it is “five minutes to midnight”. No doubt one of the country's well-made, well-marketed timepieces told him so.