The Governing Council of the European Central Bank has been informed by the Swiss National Bank about its decision to “no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20.”
What could possibly go wrong?
The Governing Council of the European Central Bank has been informed by the Swiss National Bank about its decision to “no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20.”
What could possibly go wrong?
I suspect that the Bank of Canada is doing much the same thing vis a vis the U.S. dollar, which is why the exchange rate with our southern neighbor has stabilized somewhat over the past few months. Our central bank is just pegging our currency more covertly than the Swiss.
What we are witnessing is a new round in competitive currency devaluations, the ultimate end of which will be massive inflation on a worldwide scale. The main investment beneficiary will be gold. There is no mystery to me why the price of gold continues to soar. The recent pullback in gold was especially notable for its brevity.
Someone should really tell Bernanke that quantitative easing only works if you are the only country doing it. What’s clear from this episode is that you’d be pretty hard pressed to find a central bank that isn’t in on this game. They’re not going to stop until most nations on earth have inflated themselves into destitution.
I admit to some sympathy for the Swiss here. Through no fault of their own, they’ve been getting hammered by the devaluation of the Euro and the dollar. But as zerohedge says, there’s no way that this can succeed all on their own. Where I disagree with zero is his assumption that the consequences of this policy will be worse than simply continuing on. That’s no clear at all just yet, particularly given that Swiss manufacturers and exporters have been getting butchered up to now.
And anything that takes a hard shot at Bernanke’s exporting deflation is just fine as far as I’m concerned.
Funny how the world turns. Now the safe heaven for hot money is farm land in Saskatchewan.
xiat, is that an offer?
Like the previous thread line “It’s Probably Nothing”. September and October could interesting months in the geopolitical world geopolitics and in the financial world.
xiat, the only trouble with Saskatchewan farm land is every once in a while you have to go to Manitoba and truck it back. Perhaps they should erect a “National Soil (Snow) Fence” up from Yorktown to Estevan with an option to Climax to keep the interest of those fornicators on the Wascana.
As an aside, the best thing the military ever did for me is to give me a first hand geography lesson about this great country you cannot get from a book alone.
It’s hard to believe they’d throw down such a bold challenge to everyone. I realize watching everyone else competitively devalue their currencies makes it very difficult for the Swiss, but holding back the market is like trying to hold back the tide.
I just don’t see how that can end well for them.
@ Texas-Canuck, you need to visit Saskatchewan again. I have been able to look across the yard quite nicely for about 15 years now with no dirt in the air to obstruct the view. Different farming methods have eliminated this problem, at least in our area.
Anyhow, investing in European banks stocks could interesting and somewhat risky.
Meanwhile a MILLION Italians turned out in the street today in protest against government spending cuts.
No wonder Lefties don’t understand the Tea Party.
buy gold silver ,guns ammo,water, medical supplies and get an underground hiding spot …lol.
Kevin, the answer to that may lie in how long the Eurozone will hold up as presently constituted. Does anyone really believe that Greece, Ireland, Portugal and possibly Italy and Spain will still be Euro members two years from now?
And when some or all of them are chased out, the Euro will rally. In any event, the problems the Swiss face with fixed currency conversion come tomorrow; they have a disaster on their hands with their real economy today. It may indeed not end well for them, but they don’t have a lot of choice.
gold almost went to 2k per oz …wow thing’s are not going good ….deos anyone wanna place bet’s on it going to 3k?