Oops – Swiss Backtracks

Euro Banknotes As Currency Declines To Nine-Year LowIt’s all over the news. Swiss National Bank abandons peg at minimum exchange rate of CHF1.20 per euro, introduced in September 2011. Swiss banking has been regarded as AAA++++ grade for several years. It had been the vanguard of financial safety for the rich. Until banking secrecy was ditched under pressure from US recently. Money fled. A peg to the Euro was introduced to keep the franc from strengthening. In reality, it wasn’t the franc that was strengthening vis a vis major currencies. It was unlimited QE by other countries that saw the “franc rising in value”. Once solid as gold, the Swiss “lost” the fight to mandate minimum national gold holdings during last year’s referendum.That was after massive propaganda campaign by banksters and politicians to instil fear if the referendum succeeds.

proxyWithout warning the Swiss did a  shock decoupling of the franc. The removal of the artificial exchange rate prompted a collapse of as much as 30% in the euro versus the franc. This is the biggest single-day drop in a developed market, coming close to what happened to the Russian rouble just months ago. The financial market is in extreme volatility with repercussions in stock markets and all derivative products. Swiss stocks retreated 8.7%. With nothing to underpin the “value of a currency”, rampant money printing is creating a financial chaos. Who knows which central bank will head to the printing press when the kitty is empty, and how much the printing press is allowed to go overtime. So the question is what is next in the chaos that is to follow now that the king of financial institutions no longer is trustworthy.

The Swiss fired the first salvo. More will be coming. Noises are coming out of the Eurozone that Greek may be allowed to exit the Euro. Leeching on the strength of Germany without end is not sustainable. According to DW, “A German report says Chancellor Angela Merkel is prepared to let Greece quit the eurozone should the people elect a government that abandons austerity. Berlin is increasingly convinced a “Grexit” would be bearable.” All the noises come in the midst of Merkel’s denial that Greece will be forced out of the Euro. The Swiss demonstrated that trust can be an illusion. Merkel can always follow precedence led by the Swiss.

It is well understood that fiat currency is all based on “confidence”. Confidence that insolvent banks will not fail because they are too big to fail. They are so big that they hold governments at ransom. No government it seems, will dare allow them to fail. They will continue to feed them with money out of the printing press. When they could no longer print, depositors are now held at ransom as they will be the ones bailing out the banks. With these impregnable guarantees, banksters continue to pilfer the funds with toxic gambles. For banksters, it is a game of “head I win, tail you lose”.

Confidence is being eroded each day that passes. There comes a time when all confidence is lost and that will be the day. It might be already here. The destination is already cast in stone. Are we there yet?

Psalm 146:3
Put not your trust in princes, nor in the son of man, in whom there is no help.


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