Views from Chris on Switzerland
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I agree, Sally.
Thank you Sally. And BTW, folks, this (Friday) morning on CNBC, Jim Chanos suggested pretty much this same motive for the SNB move.
Chris, I agree it is a bit early to measure the effect of the Swiss decision, because up until 2011 (when the Swiss pegged their currency to the Euro) the Franc was more of a safe haven bid than the dollar. At the time they pegged their currency to the Euro because it was rising too much and hurting exports. However, if the Euro QE causes massive inflation in the Euro then they may be better off “un-pegged” and letting the marketplace value their currently independently. There could be a surprise pop in the Euro which may temporarily halt the rise of the dollar, and further boost Gold a little bit into the 1280 – low 1300’s. Then I think everything reverts direction mid Feb.
I think that most of us agree on this Shad.
It is also very curious that gold topped in 2011 around the time of the Swiss pegging their Franc to the Euro, and now that they un-pegged their currency, gold has had a strong up day breaking through 1253 and 1257 first level of support in one move. If gold can close about 1257 we may still have time to take out 1280 and 1350 before the intermediate cycle in PMs tops out in Feb.
+1 Excellent Shad. The peg was announced precisely at the high for gold.
It is also interesting to note that the Knights of the Templar Banks that left the Middle East after the crusades were lost made a pit-stop with their monetary horde in Scottland briefly. However, their great wealth was transferred to another country {Switzerland} where the flag (white cross on red shield) is the “reverse” of the templar’s (red cross on a white shield). Typical code for brotherhood activity.
The Knights Templar were very innovative in some of the early bank creation, loaning at interest to keep travelers gold safe, and remember how they are always a “Neutral” country in times of world conflict. Everyone agrees, “Yeah were going to tear Europe apart in WWI and WWII….but try to leave Switzerland out of it everyone (They got all the gold and vaults for the world elite).
Now fast forward to the leader of banking superiority in the 19th and 20th century – Swiss banks. If you wanted to hide money in the past, you put it in Swiss accounts, (until the IRS started snooping into their accounts). It is also interesting that much of the West’s gold from ETF outflows and selling the last 3 years has gone through Switzerland to be melted down and sent to the East in Asia. What an interesting role they play on the world stage.
Now fast-forward to yesterday: The Swiss are now un-pegged from the Euro, are neutral once again, and some of the smartest economic minds and wealthiest individuals are intertwined in Swiss economics. They are very strategic in method.
Isn’t is interesting that they pegged to the Euro when their currency was peaking in 2011 along side gold because it was getting too much attention. Now over 3 years into the PM bear market, they un-peg the Franc and gold breaks a key resistance level of 1253-1257 today.
Coincidence??? I think not. Remember the masonic code – Order out of Chaos. Problem-Reaction-Solution. They create the problem to create Chaos. They know the markets will react, and things played out just like that today in world markets. Obviously, they have a solution that benefits them just out of sight of the average economist, but not if you realize they’ve been a major player in banking through the modern age. I doubt
It is also interesting to note that the Knights of the Templar Banks that left the Middle East after the crusades were lost made a pit-stop with their monetary horde in Scottland briefly. However, their great wealth was transferred to another country {Switzerland} where the flag (white cross on red shield) is the “reverse” of the templar’s (red cross on a white shield). Typical code for brotherhood activity.
The Knights Templar were very innovative in some of the early bank creation, loaning at interest to keep travelers gold safe, and remember how they are always a “Neutral” country in times of world conflict. Everyone agrees, “Yeah were going to tear Europe apart in WWI and WWII….but try to leave Switzerland out of it everyone (They got all the gold and vaults for the world elite).
Now fast forward to the leader of banking superiority in the 19th and 20th century – Swiss banks. If you wanted to hide money in the past, you put it in Swiss accounts, (until the IRS started snooping into their accounts). It is also interesting that much of the West’s gold from ETF outflows and selling the last 3 years has gone through Switzerland to be melted down and sent to the East in Asia. What an interesting role they play on the world stage.
Now fast-forward to yesterday: The Swiss are now un-pegged from the Euro, are neutral once again, and some of the smartest economic minds and wealthiest individuals are intertwined in Swiss economics. They are very strategic in method.
Isn’t is interesting that they pegged to the Euro when their currency was peaking in 2011 along side gold because it was getting too much attention. Now over 3 years into the PM bear market, they un-peg the Franc and gold breaks a key resistance level of 1253-1257 today.
Coincidence??? I think not. Remember the masonic code – Order out of Chaos. Problem-Reaction-Solution. They create the problem to create Chaos. They know the markets will react, and things played out just like that today in world markets. Obviously, they have a solution that benefits them just out of sight of the average economist, but not if you realize they’ve been a major player in banking through the modern age. I doubt this was a random decision.
No, there are NO coincidences with those people.
Keep in the back of your mind………………..gold going higher…………..
Target to close all 133 Canadian stores, gets CCAA protection
Target says it plans to discontinue all operations in Canada and has been granted protection from creditors, less than two years after opening to much fanfare.
In a release early Thursday, the U.S. retail chain said it will close all its locations in Canada. There are 133 stores across the country with about 17,600 employees.
The company launched in Canada in March of 2013, not quite two years ago.
Thanks Markettofuture as I was not aware of this.
I GUESS ………THEY ARE NOW……..A MOVING TARGET……………
That is an interesting thought about Russia and China Chris – where are the banks in the world where all those Russian and Chinese politicians, oligarchs, etc, keep their money?
Maybe Uncle Sam got too nosey?
Probably something like that, Bob UK
Bingo
What do I win? 12 months supply of Swiss Cheese? Worth more than gold the way the Swissie is going.
Chris ; AL ; Cory ! Same hedge funds Boys will kill themselves ! THE SWISS’S HA HA ! ONLY GOLD !
http://www.gold-eagle.com/article/big-hedge-fund-goes-bust%E2%80%A6830-million-loss-swiss-franc-trade
It couldn’t happen to nicer people!
Speaking of which Bob the Russians have now ample supplies of Camembert – wait for it coming from Siberia! Seems like a Frenchwoman now living in Siberia has cornered the markets, more so with the sanctions.
Oddly enough – being serious for a moment – since the Russian sanctions started the price of cheese in the UK has plunged. Huge cheese glut.
It had got prohibitively expensive back in the summer and many people were giving up buying cheese… and the price of cheese has crashed.
Same true for Velveeta?
I am not sure if Velveeta even qualifies as cheese….more of a “cheese product”. : -)
You essentially have to take on massive balance sheet expansion to intervene in the currency. The Swiss spent CHF 200 billion in what was a futile attempt to control markets. And then the release of the peg was another 60 billion.
I wonder why it doesn’t occur to the Swiss to buy gold as a QE measure.
Now that their currency has appreciated, they might just take advantage of that.
People complain gold is volatile, I never saw gold go up or down 20% a day.
Maybe their vaults are crammed full of gold already.
The volcano has rumbled (SNB depegging) – but will it erupt (EU QE)?
Hello Al
Chris should realize that the Swiss have shelled out 500 billion Swiss Franks to maintain the peg of the Frank to the Euro at 1.2. It appears the ECB will soon massively expand their balance sheet. The Swiss do not have enough printing presses to keep this charade going. Check out the return on five and tenyear Swiss government bonds today. They are trying another approach.
Bob Grierson
Switerland.
Bob — No question that, as a practical matter, it was way too expensive for the SNB to keep this up. But — and this is an open question, because all I can do beyond the obvious reason is speculate — why now? Do the Swiss see the euro ultimately going back down to its all-time low of around US84 cents? Do they believe Draghi will really come up with the kind of massive QE already priced into the euro and European debt, and ratify those moves? Am I wrong to wonder about anything short of a massive move by the ECB perhaps causing reversals for a while, with traders covering their euro shorts if Draghi for whatever reasons still wants to talk us all to death? If I’m right and the ECB disappoints next week, the near-term risk is that the SNB will have made this move at, at least, a near-term LOW for the euro.
Maybe…the Swiss are smelling a more systemic crisis coming for the euro zone? Or as I suggest (and granted they mitigated this a little by taking rates further into negative territory) they are going to make a play for other emerging market/Eastern assets?
Interesting times we live in, where the desperate measures by central banks are becoming more prevalent, as they also fail to fulfill their ostensible purposes, i.e., to help economies and people…
I also found it amusing — and perhaps telling — to listen to Christine Lagarde a bit ago offended that she didn’t have any heads-up about this. That fact alone suggests to me (and again, this is speculation) that the reasons for this move by the SNB may go beyond the obvious headlines.
Some interesting questions Chris!
They don’t need to answer to Christine Lagarde, their the neutral Swiss banking cartel. The Swiss are the neutral exception to everything Euro, and play by a different set of rules. However, when they act so severely and suddenly, they absolutely knew it would cause more volatility. What remains to be seen is how this will play out to their favor, as the world elite have kept a portion of their horde in Switzerland the last few hundred years, and they are informed at the highest levels. I also anticipate them buying more gold with the higher valued Franc to bring their balance sheet back to where it was pre-announcement.
Thanks Bob G!
Chris, couldn’t it be that there WILL be a euro-zone QE and that it is now priced-in. If so, the announcement could just kick-off a “buy-the-fact” short covering rally.
Any decent rally would aid the central planners since the masses would misinterpret QE as being a positive event. If the dollar is already rolling over as the announcement happens, a euro rally would be easier to cultivate. A widespread loss of confidence might then be averted.
Agreed. If the dollar rolls over and the Euro has a short-covering rally, these should both be a help to rising Gold for the short term.
Matthew, see my reply to Bob above…
I continue to believe the most likely scenario is that an extremely overbought euro could rally next week if the ECB does anything less than announce that a trillion-euro QE program is a FACT and now a present reality. No more talking about it…
The irony is that the reason the euro should be going down IMO is the very real prospect still that, a few years down the road, there won’t be one.
But for present purposes, currency traders and their dogs have all bet the farm, concerning the US$/euro, that:
1. The Fed will raise rates at least a couple times
2. The U.S. economy will continue to grow at 3%+
3. The ECB will debauch the &^%#$( out of the euro via Q.E., without any systemic issues causing trouble for the euro itself.
I sure wouldn’t bet on that menu.
Chris,
Did you meant “an extremely OVERSOLD” euro ?
Best,
LPG
Yes, LPG – good catch!
Thanks Chris, I also think the euro could rally very soon.
* I intended to write “did you mean” (and not meanT).
Apologies for the typo in my post above.
Best,
LPG
A tsunami, carnage is how Swiss exporters see the de-coupling.
http://www.bbc.co.uk/news/business-30829917
The first shock (black swan) of 2015.
http://kingworldnews.com/man-predicted-collapse-swiss-franc-gives-shocking-predictions-2015/
A slam dunk for QE on the 22nd…yes?
What if the Swiss themselves are watching the US drive the world reserve currency into the ground without restraint, and knowing their reputation for having a strong currency, infrastructure, and economy is thinking they should have the world’s reserve currency? What if they want more of the Safe Haven investment that the US dollar has so unilaterally reaped the benefits from? Seems to make sense to me. I mean, how many people go to Switzerland because it is cheap? No, people go to Switzerland because it is safe there. As the deflation hits, and governments start scaring all the rich out with crazy taxes, the Swiss may stand up and welcome them in. If that were true, this is an amazing move by Switzerland! I also think it helps to quiet the people who were support the gold vote by giving their purchasing power greater superiority. Just my 3 cents…
No. Swiss is too small an economy to be the reserve currency. It is not possible since 99% of its money would be held outside. It may want to be a safe haven but definitely not reserve currency. World will not accet it either.
[…] In this weekend’s BIG first issue of the year — “Your Investment Playbook for 2015″ — I talk further of these, especially the VERY curious timing of this, being just ahead of the gathering in Davos, Switzerland of the World Economic Forum, among other things. For now, I would suggest you listen in to my interview of Thursday morning on the Swiss move, its apparent responsibility for prompting the gold price to finally break above a LONG down trend line, and more: you can listen HERE […]
Al, I think I heard Jim Willie in his Christmas interview saying, “The Swiss will upeg the Swiss franc from the Euro!”
Dear Al, Cory and Chris,
It’s interestng that the SNB did not just revalue the Swiss Franc by a few percent perhaps or gradually move
it up as the Chinese did against the US dollar since around 2005. They just let it go up all at once.
It reminds me of Britain’s exit from the Exchange Rate Mechanism in 1992 when the Pound fell about 15% in a day I think. This time it’s the CHF going up a huge amount on its release from the peg and that says it all about Britain versus Switzerland, don’t you think?
Dave.
It was Egon von Greyerz according to KWN but I think JW said it as well.,
Jim did say it; my memory is not so bad after all!
http://www.tfmetalsreport.com/podcast/6495/out-old-jackass
12 to14 minutes into the interview:
On the SNB’s balance sheet:
“It’s overloaded with Euros and it’s going to break”
…
“and force a nice 20-40% rise in the Swiss franc and
do a massive hot poker up it’s econpmy’s ****”
in his usual subtle manner!
Crazy guy but spot on again!
very cogent Temple on Swiss aligning w the East..