Tuesday, September 06, 2011

The Swiss Shoot Themselves In the Face

This is getting entertaining, although your guess is as good as mine as to why someone would want to hitch their wagon to the Euro train -
Currency markets have seen massive volatility this morning after the Swiss National Bank decision to fix the Swiss franc to the euro.

Gold is trading at USD 1,899.50, EUR 1,339.10, GBP 1,177.30, CHF 1,611.10 (up from CHF 1,486.50 yesterday) and JPY 146,350 per ounce. Gold is down 0.18% in dollar terms and strong physical demand continues at these levels.

Just prior to the announcement, spot gold for immediate delivery had risen to a new record nominal high of $1,921.15/oz in early morning trading in Europe.

Then just before 0900 hours GMT came the news that the Swiss National Bank has decided to fix the country's exchange rate at 1.20 Swiss francs per euro. The SNB indicated it would buy an unlimited amount of euros regardless of the risk to maintain that value.
The Real Effect
Of course, feeding countries wholesale to the Euro maw will prolong the inevitable collapse, but it will also make the collapse that much worse. I imagine that the Swiss will soon be informing their leaders of their intentions on the street. It should look something like, Greece.

In short, there should be little doubt that countries will collude together throwing men, women and handicapped children under the bus in the inevitable race to the bottom. But, the witless wonder will protest, this is progress!!!

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