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View Poll Results: Are you prepared to take a pay cut if you were faced with prospect of being laid off?
Yes, would happily take a pay cut rather than being laid off 13 16.25%
Yes, if I feel that prices will also be adjusted down by around the same percentage (20%) 6 7.50%
No, absolutely not, I don't think this is the way to go 32 40.00%
No, but I might reconsider as events unfold 12 15.00%
No opinion at the moment. 5 6.25%
Still digesting... 12 15.00%
Voters: 80. You may not vote on this poll

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  #21  
Old 16.01.2015, 16:54
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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for us on UK only pensions, there is no choice anyhow- so deep breath, count to 10 - and adjust accordingly. Nowt else we can do.

See u at HyperU tomorrow then.
That's the problem wuth speculation Odile, income in 1 currency expenses in another. I can't think you ever believed your UK pension was in any way pegged to the CHF so its hardly a surprise. Most people who move when they retire choose to retire somewhere with a cheaper cost of living, you chose to retire in the most expensive country in the world.
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  #22  
Old 16.01.2015, 17:01
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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As i have worked here for more than the required amount, and I have a child, i would say both. Get laid off and get paid 80% on RAV looking for a new job.
This is all well and good if 80% is less than the RAV maximum in absolute terms. Otherwise I think you're better off taking the 20% cut.

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Property: Becomes even less affordable to buy
Unless the prices correct down to make it more affordable.

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Goods/services: Come down far slower than wages - in the meantime the lower paid get penalised more than the higher
As long as they go down eventually people will be happy with the situation... in the meantime they will be crossing the border to Germany / Austria / France / Italy.

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Tax: The government won't stand for such a sizeable cut in income tax
There will be no cut percentage wise, but the total amount will fall, but with the cost of everything else falling and the value they are receiving going up in value, they are pretty much flat.
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  #23  
Old 16.01.2015, 17:06
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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That's the problem wuth speculation Odile, income in 1 currency expenses in another. I can't think you ever believed your UK pension was in any way pegged to the CHF so its hardly a surprise. Most people who move when they retire choose to retire somewhere with a cheaper cost of living, you chose to retire in the most expensive country in the world.
Well I am not complaining- just sayin' Good job we bought our old house when we did- and for the rest- we will just adjust accordingly- as we've always done, through good and bad times- that's ok. Much bigger shock in the 80s when our mortgage went up to 19.5% in the UK, just as we'd just bought a much bigger house (perhaps beyond our means- all turned out very well in the end).

Last edited by Odile; 16.01.2015 at 17:19.
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  #24  
Old 16.01.2015, 17:07
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

I think Switzerland is just going to have a nice big depression, like the one my grandparents lived thru, where people lost their jobs/businesses, and had to take menial employment where they could find it to keep the wolf from the door.

It was a poor country not so long ago, then it got too fat and wealthy, attracting too many people, now it has a major problem with social welfare, greedy countries ogling it, Africa trying to re-locate itself here, traditions going out the window, but still trying to live the consumer life.

All about to end.

And not a surprise. Most of these big disruptions are planned well in advance. Same with most happenings. The rabble of tax payers are the ones to suffer the most.

You have to be old to appreciate this. Being young one is ever-confident that bad things just don`t happen.

Taking a 20% pay cut? Better than having no job at all.

Living off RAV? A dream. In my opion of course, and I may be wrong, but then I just might be right.
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  #25  
Old 16.01.2015, 17:08
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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This is all well and good if 80% is less than the RAV maximum in absolute terms. Otherwise I think you're better off taking the 20% cut.
Don't worry, I am on WAY less than the EF minimum wage.
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  #26  
Old 16.01.2015, 17:08
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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Would the 20% wage cut happen at the same time as?
- banks cutting 20% off the value of retail debt (mortgages)
- the market cutting 20% off ALL goods and service - including rent, cars, travel, food&drink, retail good
- the government slashes all tax deductions by 20% and lowers the bands by 20%
krankenkasse is a big one; doubt that will get cheaper.
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  #27  
Old 16.01.2015, 17:09
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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I think Switzerland is just going to have a nice big depression, like the one my grandparents lived thru, where people lost their jobs/businesses, and had to take menial employment where they could find it to keep the wolf from the door.

It was a poor country not so long ago, then it got too fat and wealthy, attracting too many people, now it has a major problem with social welfare, greedy countries ogling it, Africa trying to re-locate itself here, traditions going out the window, but still trying to live the consumer life.

All about to end
Just because the CHF has gone up by 15%? It was near parity with the Euro around 3.5 years ago (not for long, but even so the world didn't end).
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  #28  
Old 16.01.2015, 17:14
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

Is the end of the Euro near?

That's the real question...

The European currency union should have been limited to EU countries with good and stable economies:

Germany, Austria, Benelux and Finland.

I think the German government made its biggest post WWII mistake by allowing so many EU countries with bad economies (and that also includes France) to join the Euro. Other EU members such as the Brits (as always) and the Scandinavians were much wiser to keep their own currencies.

Here is a cartoon published in la Tribune de Genève:

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  #29  
Old 16.01.2015, 17:30
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

What would be advisable to do with my CHF savings sitting in the Swiss bank? Just let it sit?

I am not talking 10million, it is only 6million
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  #30  
Old 16.01.2015, 17:32
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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What would be advisable to do with my CHF savings sitting in the Swiss bank? Just let it sit?

I am not talking 10million, it is only 6million
Let's say you're not trolling. Is the 6 million just sitting there doing nothing? You live in Switzerland?

I'd move it to Zimbabwe if my risk appetite was up to it
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  #31  
Old 16.01.2015, 17:44
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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What would be advisable to do with my CHF savings sitting in the Swiss bank? Just let it sit?

I am not talking 10million, it is only 6million

You came to the right place to ask. there are more experts on EF than anywhere else on the internet.
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  #32  
Old 16.01.2015, 17:45
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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Is the end of the Euro near?

That's the real question...

The European currency union should have been limited to EU countries with good and stable economies:

Germany, Austria, Benelux and Finland.

I think the German government made its biggest post WWII mistake by allowing so many EU countries with bad economies (and that also includes France) to join the Euro. Other EU members such as the Brits (as always) and the Scandinavians were much wiser to keep their own currencies.

Here is a cartoon published in la Tribune de Genève:

Come on with the EUR bashing already. Yes it is not working, but the problem was no the concept, the problem was and is the half-ass implementation. You can't have one ECB and 20 different economy ministries. It was never going to work. If they had the balls to go full out and centralize the economic ministries then we could get somewhere. The US has rich areas, and poor areas, and they're managing somehow with their structure. The problem is that if in 2002 Europe tried to harmonize the economic policies overnight it would be chaos obviously.

What they should do is start harmonizing economic policies, targeting at a single economy ministry sitting somewhere in Europe and be done with it. That could make the EUR a powerhouse and yes it could make the glory days of mid naughties not an overvalued dream, but a fundamentally solid currency.

The problem is they were going for the low hanging fruit instead of going the full nine yards, and now people forgot when it was everything was all nice and well and are looking at each other's throats. And with that sentiment unified Europe as a concept fades more and more.


And getting back to the topic at hand,

If there is a nuclear winter, would you eat your neighbour sharing the building shelter, or would you offer yourself to them?

I mean, since we're asking silly questions about silly scenarios, let's go crazy here...

Wait for the dust to settle, the price to calm down, then wait to see how actual performances will be, and then maybe in a year or so we will see if anyone's getting laid off.

FFS, it's not like EMEA hqs are going to move shop overnight...
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  #33  
Old 16.01.2015, 17:48
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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You came to the right place to ask. there are more experts on EF than anywhere else on the internet.
10 experts, 11 opinions
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  #34  
Old 16.01.2015, 18:04
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

Interesting to note that even though we don't have a lot of votes it seems the majority of people refuse to take a small loss of 20% in return for basically receiving the same level of Purchasing Power Parity.

The cost of everything goes down by 20% => PPP goes up by 20% (Ok more or less) => People's wages go down by 20% => PPP is back down to where it started.

If people insist on having the same salaries they will be forced by market forces to take even a bigger cut sooner or later.
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  #35  
Old 16.01.2015, 18:05
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

but everything has not gone down.
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  #36  
Old 16.01.2015, 18:12
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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but everything has not gone down.
Exactly, my mortgage repayments are going to be the same for years to come. As are my health insurance premiums etc.
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  #37  
Old 16.01.2015, 18:14
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

Very very low mortgage payments for a very long time.... that's ok no?
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  #38  
Old 16.01.2015, 18:18
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

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but everything has not gone down.
Wait for the next inflation report.

SMI down nearly 14% in two days and there is probably more to come. The rest of the economy will follow soon. Fuel, imported goods, food costs, exporters will become less competitive, international companies can not justify the cost of the Swiss labour costs anymore, soon local businesses can not pay the salaries of their employees and then they ask them the question...

#callmedrdoom

I hope all of this doesn't happen but there is no other choice.

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Exactly, my mortgage repayments are going to be the same for years to come. As are my health insurance premiums etc.
Wealth is redistributed on such occasions:

Inflationary environment = wealth goes from savers to borrowers.
Deflationary environment = wealth goes from borrowers to savers.

If you borrowed in the good times for low rates be happy that this will stay the same. You can't have your cake and eat it. Further more the value of whatever you bought might be worth less now.
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  #39  
Old 16.01.2015, 18:19
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

Another thing to consider for those who own property, over time the value decreases - which may mean some are caught with the banking making call for further equity - which they haven't accrued because their wages were cut 20% and cost of goods didn't fall as quickly.

There are plenty who would gamble on taking a redundancy payout and sitting on 70-80% RAV.
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Old 16.01.2015, 18:20
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Re: Aftermath of SNB EUR Peg Discontinuation - Would you be happy to take a 20% pay c

Only if you are fixing at today's rates. What if you fixed at 3% years ago?

The thing is, not all prices in Switzerland will fall. We are likely to experience deflation too, so falling tax receipts will mean that the government might have to raise tax rates.
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