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View Poll Results: How long does the euro have left?
Monday 4 3.85%
Before/near Xmas 12 11.54%
Mid-February 34 32.69%
It'll stay intact due to an overnight hallmark 54 51.92%
Voters: 104. You may not vote on this poll

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  #421  
Old 29.11.2014, 19:28
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Re: How long does the Euro have left?

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Unfortunately, it's not millions, but billions, with a "b".
174 billion, more or less:
http://www.snb.ch/ext/stats/balsnb/p...r_SNB.book.pdf
(And 142 billion USD, the rest is really peanuts).

As per end of October 2014.
How easy is it for Switzerland to get out of holding a position like this?
Can't help getting the feeling that this is going to come back and bite Switzerland on its backside one day.

PS: At the time I remember them saying they would most probably also make a big profit from the deal.
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  #422  
Old 29.11.2014, 20:13
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Re: How long does the Euro have left?

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How easy is it for Switzerland to get out of holding a position like this?
Can't help getting the feeling that this is going to come back and bite Switzerland on its backside one day.
I'm not too optimistic.

They could shift to stocks, gradually. Most European ones are noted in Euro nevertheless - but the right stocks should be worth something even after the Euro has been replaced with something else.

The problem is that they would need to completely shift their investment strategy.
They would probably also need to hire a lot of people watching over these stocks. I take it, this would not go unnoticed.

If the "Gold Initiative" succeeds tomorrow, they can gradually shift a couple of Euros to Gold.
But 174 billion Euro would buy over 5750 tonnes of Gold (which in turn is a frightening and sobering visualization of the dimension of the problem).
Even buying "just" one tonne per day it would take 15 years to shift that inventory. And one tonne per day would probably be enough already to create a major gold-rallye that would in turn have everybody and his dog literally kill their piggy banks and try to convert everything to gold, creating a major financial turmoil that would make the combined 1929, 1987 and 2008 crisis look like a children's birthday party...

I think, that may actually be the realization that the SNB itself has come to: they're sitting in a roller-coaster and they can not get out. They have to ride it till it has come full circle.
Unfortunately, nobody knows how long the ride is or where exactly it will end.
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  #423  
Old 30.12.2014, 01:12
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Re: How long does the Euro have left?

Rumours are that the SNB spent at least 6 Billion last week to hold the CHF/euro rate; panic ensued when the 1.20 rate was crashed through

Might be the best solution to the bi-laterals discussion; just threaten that the SNB will sell all their euros!
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  #424  
Old 30.12.2014, 01:34
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Re: How long does the Euro have left?

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Rumours are that the SNB spent at least 6 Billion last week to hold the CHF/euro rate; panic ensued when the 1.20 rate was crashed through

Might be the best solution to the bi-laterals discussion; just threaten that the SNB will sell all their euros!
Only if throwing the Euro under the bus hasn't already been concluded by Merkel et.al.
Just look at Greece...

From what I read (on insideparadeplatz.ch), the money used to buy all the Euros is actually money borrowed from "normal" banks - in other words: my and your savings (if you have any CHF-denominated savings, that is).
A 20 or 30% haircut would hurt me quite a bit.

A commentator on the above site noted that since 2007, the amount of 1000 CHF banknotes in circulation has risen from 24 million to 38 million...
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  #425  
Old 30.12.2014, 01:50
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Re: How long does the Euro have left?

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Only if throwing the Euro under the bus hasn't already been concluded by Merkel et.al.
Just look at Greece...

From what I read (on insideparadeplatz.ch), the money used to buy all the Euros is actually money borrowed from "normal" banks - in other words: my and your savings (if you have any CHF-denominated savings, that is).
A 20 or 30% haircut would hurt me quite a bit.

A commentator on the above site noted that since 2007, the amount of 1000 CHF banknotes in circulation has risen from 24 million to 38 million...
Great post
About " is actually money borrowed from "normal" banks " - on which they now receive negative interest.

About "the amount of 1000 CHF banknotes in circulation has risen from 24 million to 38 million.". indeed, some people must have so much stuffed under their mattresses that their noses are rubbing their ceilings
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  #426  
Old 05.01.2015, 18:49
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Re: How long does the Euro have left?

The lower the Euro goes the lower our beloved CHF goes. Outside of Euroland we are getting hammered by exchange rate differentials (or profiting if savings/capital is still in GBP/USD/AUS etc). Over last year CHF fell around 4% against GBP and more than 11% against USD. EUR/USD is at a 9 year low.

The more this slide down that CHF experiences hand in hand with the EUR, the more I think that this 1.2 peg that's there at the moment is crazy. Is there any chance that they may move the peg down do you think?
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  #427  
Old 05.01.2015, 19:37
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Re: How long does the Euro have left?

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Is there any chance that they may move the peg down do you think?


I hope not.
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  #428  
Old 05.01.2015, 20:30
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Re: How long does the Euro have left?

saw the USD got above the CHF.
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  #429  
Old 05.01.2015, 20:35
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Re: How long does the Euro have left?

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saw the USD got above the CHF.
Expect it to go a lot further.
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  #430  
Old 05.01.2015, 20:43
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Re: How long does the Euro have left?

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Expect it to go a lot further.

You think? I have USD I need to convert to Euro and or CHF, something useful
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  #431  
Old 05.01.2015, 20:48
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Re: How long does the Euro have left?

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You think? I have USD I need to convert to Euro and or CHF, something useful
USD was finished a few years ago...... been rising ever since & still not the in currency so has a long way to go. 1.50 CHF to a USD would not surprise me.
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  #432  
Old 05.01.2015, 21:08
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Re: How long does the Euro have left?

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The lower the Euro goes the lower our beloved CHF goes. Outside of Euroland we are getting hammered by exchange rate differentials (or profiting if savings/capital is still in GBP/USD/AUS etc). Over last year CHF fell around 4% against GBP and more than 11% against USD. EUR/USD is at a 9 year low.

The more this slide down that CHF experiences hand in hand with the EUR, the more I think that this 1.2 peg that's there at the moment is crazy. Is there any chance that they may move the peg down do you think?
About "Is there any chance that they may move the peg down do you think?" If they do it will damage the Swiss export business to the EU so not a likely move.
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  #433  
Old 05.01.2015, 23:47
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Re: How long does the Euro have left?

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About "Is there any chance that they may move the peg down do you think?" If they do it will damage the Swiss export business to the EU so not a likely move.
OK so 45% of exports (roughly) are to EU countries (I stripped out UK but didn't strip out other non Euro countries) but the longer this peg continues, exports to the other 55% will suffer.

Also Switzerland imports more from the EU than exports so there will be a benefit to the consumers and businesses from lower input prices.

I don't think the trade argument is all that pervasive?

Source: http://www.bfs.admin.ch/bfs/portal/f...lank/data.html

And Fatman, I'll believe a 60+% appreciation in a first world currency against another first world currency when I see it. 100CHF says USD won't be 1.5 CHF before 2020?
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  #434  
Old 06.01.2015, 02:38
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Re: How long does the Euro have left?

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And Fatman, I'll believe a 60+% appreciation in a first world currency against another first world currency when I see it. 100CHF says USD won't be 1.5 CHF before 2020?
I don't get your maths, it's less than a 50% rise from today. 100CHF is very lame for someone with any conviction

Just look at what happened roughly 20 years ago in a similar time scale, you clearly don't believe things in CH are too expensive, relative to the rest of the world.

Last edited by fatmanfilms; 06.01.2015 at 02:48.
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  #435  
Old 06.01.2015, 08:22
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Re: How long does the Euro have left?

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I don't get your maths, it's less than a 50% rise from today. 100CHF is very lame for someone with any conviction

Just look at what happened roughly 20 years ago in a similar time scale, you clearly don't believe things in CH are too expensive, relative to the rest of the world.
60% =10% over the last year + 50% in the future. And sorry 100 CHF isn't enough for you, maybe you should just send it over? I'll PM you my bank details.

Over 20 years, who knows, you may be right but in 20 years we might all blow ourselves up. Predicting exchange rates over that sort of horizon is like saying that MU will win EPL over the next 20 years. You're giving yourself plenty of scope to be right.

Anyway, hope the peg doesn't move as I've plenty of Euros on the assumption EUR/CHF is a one way bet so I would be very upset if I lost 5 or 10% overnight...
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  #436  
Old 06.01.2015, 08:43
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Re: How long does the Euro have left?

Regarding US dollar soaring.

Indeed, it's going up like a rocket!
Trouble is many rockets carry a firework up top that eventually explodes and after a nice display comes back down to Earth in a glittery shower of twinkling lights.
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  #437  
Old 06.01.2015, 08:46
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Re: How long does the Euro have left?

I have faith in the SNB, politicians, and bankers. They wouldn’t leave us hanging, would they...?

In 20 to 30 years from now in business schools this time period will become a standard example of how not to run an economy.
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  #438  
Old 06.01.2015, 10:19
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Re: How long does the Euro have left?

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And Fatman, I'll believe a 60+% appreciation in a first world currency against another first world currency when I see it.
didn't that already happen with CHF vs GBP?
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  #439  
Old 06.01.2015, 12:20
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Re: How long does the Euro have left?

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...Anyway, hope the peg doesn't move...
I hate to repeat myself, but I find it pretty important to understand that there isn´t (and never was) any >>peg<<!
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  #440  
Old 06.01.2015, 13:55
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Re: How long does the Euro have left?

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I hate to repeat myself, but I find it pretty important to understand that there isn´t (and never was) any >>peg<<!
Congrats, you are of course correct.
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