Ever since the 2009 panic, the Swiss have been pretending that the Euro is worth 20% more than the Swiss Franc (The Swiss still have their own currency). This isn’t true and the Swiss Central Bank has been soaking up the excess Euros.<\/p>\n
The reason for doing this was that if they let the euro lose value, Swiss exports would cost more (and tourists visiting Switzerland). Wage pressures from immigrants would undercut the wages paid to Swiss workers.<\/p>\n
Like Quantative Easing, making infinite Swiss Francs to buy up Euros works – until the panic starts. As the value of euros drops, the huge Swiss vault of [electronic] Euros loses value. If you try to unload them, you speed up the loss of value. Contracts or loans based in Swiss Francs will require more Euros to pay off. Profits evaporate, loans default.<\/p>\n
The Euro and Dollar immediately lost 14% against the Swiss Franc. The tide on the beach is going out. There is little time to avoid what is coming. There may be nowhere that’s safe. This is not a drill.<\/p>\n","protected":false},"excerpt":{"rendered":"
Ever since the 2009 panic, the Swiss have been pretending that the Euro is worth 20% more than the Swiss Franc (The Swiss still have their own currency). This isn’t true and the Swiss Central Bank has been soaking up … Continue reading