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  #101  
Old 27.07.2011, 15:39
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Re: To all you Swiss people: Do realize how great your country is?

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No, after one loses one's job, one can just go to the RAV and chill.

You clearly have no clue about life here....
It's still an incentive to save. If you take RAV money too, one can import cheap goods from abroad.
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  #102  
Old 27.07.2011, 16:37
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Re: To all you Swiss people: Do realize how great your country is?

Here's a thought: spend a week here not being a troll.
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  #103  
Old 27.07.2011, 16:39
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Re: To all you Swiss people: Do realize how great your country is?

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It's still an incentive to save. If you take RAV money too, one can import cheap goods from abroad.
Let me guess; you didn't study economics at school?
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  #104  
Old 27.07.2011, 16:55
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Re: To all you Swiss people: Do realize how great your country is?

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Let me guess; you didn't study economics at school?
No, I didn't. Did you?

Anyway, just look at the extreme case. You live in a country with an infinitely strong currency. What would you do with your savings? Keep producing goods at home; or would you just chill, importing goods for free from abroad?

Now consider the similar less extreme case, with a very strong CHF. You don't have to study economics to see that a strong currency allows a country to import more.
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  #105  
Old 27.07.2011, 16:57
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Re: To all you Swiss people: Do realize how great your country is?

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Here's a thought: spend a week here not being a troll.
I suggest people read through this thread once more. And then decide for themselves who the actual troll(s) is (are). Apparently, to some people, being a troll is the same as having different opinions.
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  #106  
Old 27.07.2011, 16:59
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Re: To all you Swiss people: Do realize how great your country is?

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I suggest people read through this thread once more. And then decide for themselves who the actual troll(s) is (are). Apparently, to some people, being a troll is the same as having different opinions.
Not being nosey or anything, but are you that bored or lacking in suitable blondes up Stockholm way that you haven't got anything else to do than post bland stuff here?

Hälsn.
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  #107  
Old 27.07.2011, 17:02
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Re: To all you Swiss people: Do realize how great your country is?

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No, I didn't. Did you?

Anyway, just look at the extreme case. You live in a country with an infinitely strong currency. What would you do with your savings? Keep producing goods at home; or would you just chill, importing goods for free from abroad?

Now consider the similar less extreme case, with a very strong CHF. You don't have to study economics to see that a strong currency allows a country to import more.
Its the mean reversion you have to worry about. Take a look at LATAM 1982 or Mexico 1994. Or even Turkey today, which is set to collapse in the next 18 months. Consuming with a strong currency, as opposed to investing with your strong currency, is a great way to destroy your countrys economy.

But the CHF will get hammered once UBS or CS go bust. Take a look at their Intangible Assets As A % of Total Assets. They are bankrupt. A complete joke. The SNB has enough capital to save a Cantonal Bank no bigger than Luzerner KB. If UBS or CS go? Bye Bye CHF...... The problem is these guys are uber exposed to the Euro-zone. They are basically 300% short volatility. Thats why their share prices are collapsing this month

SNB is very worried. But that will fix the CHF problem.
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  #108  
Old 27.07.2011, 17:02
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Re: To all you Swiss people: Do realize how great your country is?

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No, I didn't. Did you?

Anyway, just look at the extreme case. You live in a country with an infinitely strong currency. What would you do with your savings? Keep producing goods at home; or would you just chill, importing goods for free from abroad?

Now consider the similar less extreme case, with a very strong CHF. You don't have to study economics to see that a strong currency allows a country to import more.
Are you talking about personal savings or production? You seem to be confusing your two scenarios.

Can you let me know where I can import things for free? Sounds very attractive.
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  #109  
Old 27.07.2011, 17:09
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Re: To all you Swiss people: Do realize how great your country is?

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No, I didn't. Did you?
As a matter of fact: Yes.

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Anyway, just look at the extreme case. You live in a country with an infinitely strong currency. What would you do with your savings? Keep producing goods at home; or would you just chill, importing goods for free from abroad?

Now consider the similar less extreme case, with a very strong CHF. You don't have to study economics to see that a strong currency allows a country to import more.
You are right, but this is only a small piece of the entire economy.

1. Not everyone has infinite savings, most people in fact need an income to live...

2. A strong currency kills jobs. Switzerland has always been an expensive place, but it just got some 20% more expensive - not compared to some Asian low cost countries but direct competitors in otherwise similarly develop environments as Germany or France.

3. The financial sector is not as big as everyone thinks it is - I believe I read it's only 5% of the jobs in Switzerland. The rest is a lot of export oriented SME that suffer very much under the super-strong CHF.

You know, I work at one of those export oriented SME and have seen people getting fired for nothing but the strong CHF. While it might sound like a good thing at the tea party's regular table does a strong currency hurt the economy. A lot. The longer it stays up the more.

I am not saying that you want a debt ridden mess like the US or Greece, but Switzerland and the people here will suffer from the strong CHF - you benefit in the short run when going on vacation but if it won't change over a longer period of time will jobs be reduced here and build up elsewhere.
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  #110  
Old 27.07.2011, 17:18
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Re: To all you Swiss people: Do realize how great your country is?

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Its the mean reversion you have to worry about. Take a look at LATAM 1982 or Mexico 1994. Or even Turkey today, which is set to collapse in the next 18 months. Consuming with a strong currency, as opposed to investing with your strong currency, is a great way to destroy your countrys economy.

But the CHF will get hammered once UBS or CS go bust. Take a look at their Intangible Assets As A % of Total Assets. They are bankrupt. A complete joke. The SNB has enough capital to save a Cantonal Bank no bigger than Luzerner KB. If UBS or CS go? Bye Bye CHF...... The problem is these guys are uber exposed to the Euro-zone. They are basically 300% short volatility. Thats why their share prices are collapsing this month

SNB is very worried. But that will fix the CHF problem.
Now THIS is the kind of meaningful discussion I want to see here. Thanks.

(Earlier, there has been only one meaningful reply to my original post, which I appreciated, and replied to. But since then, and until now, few have contributed anything except irrelevant drivel.)

When saying "a great way to destroy your country's economy", I think you have to take into account which parts get destroyed and which not. I don't think one should just talk about a country's "destruction" as a whole - this is the greatest error of most economic theories today. For instance, when the US "collapsed" in 2008, i.e. the banks collapsed, the free markets was giving a signal that they should have collapsed, allowing for a growth in other sectors to take place. Sadly, that was not allowed to happen.

You're right about mean reversion: The currency in the free market will overall tend to balance itself, according to imports and exports. But if the free market wants, say, farmers to go bust, then they are supposed to go bust, and other sectors are supposed to take their place, according to voluntary supply-demand schedules of producers and consumers. (Anything else is advocating violent interference into the free market.)

Thanks for the insightful info on the Swiss banks. Maybe CHF is due for a big correction indeed!
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  #111  
Old 27.07.2011, 17:21
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Re: To all you Swiss people: Do realize how great your country is?

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Can you let me know where I can import things for free? Sounds very attractive.
I wish to emphasize that I was talking about a hypothetical extreme case.
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  #112  
Old 27.07.2011, 17:21
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Re: To all you Swiss people: Do realize how great your country is?

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No, I didn't. Did you?

Anyway, just look at the extreme case. You live in a country with an infinitely strong currency. What would you do with your savings? Keep producing goods at home; or would you just chill, importing goods for free from abroad?

Now consider the similar less extreme case, with a very strong CHF. You don't have to study economics to see that a strong currency allows a country to import more.
It also screws your export market. You understand that, right, Mr No Economics Degree (not that you need one to understand that)? What do you think that will do to your national economy? Or are you one of those 'Screw you, I've got mine' nationalists?
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  #113  
Old 27.07.2011, 17:24
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Re: To all you Swiss people: Do realize how great your country is?

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As a matter of fact: Yes.



You are right, but this is only a small piece of the entire economy.

1. Not everyone has infinite savings, most people in fact need an income to live...

2. A strong currency kills jobs. Switzerland has always been an expensive place, but it just got some 20% more expensive - not compared to some Asian low cost countries but direct competitors in otherwise similarly develop environments as Germany or France.

3. The financial sector is not as big as everyone thinks it is - I believe I read it's only 5% of the jobs in Switzerland. The rest is a lot of export oriented SME that suffer very much under the super-strong CHF.

You know, I work at one of those export oriented SME and have seen people getting fired for nothing but the strong CHF. While it might sound like a good thing at the tea party's regular table does a strong currency hurt the economy. A lot. The longer it stays up the more.

I am not saying that you want a debt ridden mess like the US or Greece, but Switzerland and the people here will suffer from the strong CHF - you benefit in the short run when going on vacation but if it won't change over a longer period of time will jobs be reduced here and build up elsewhere.
You're right indeed. But in the free market, if exporters go out of business the market is telling that they are supposed to go out of business, and people will go work for more efficient exporters or importers.

But sadly, we don't live in free markets. The CHF fluctuation are probably caused by speculators and bankers that thrive on fractional reserve banking and other credit gimmicks. So it's a difficult situation indeed
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  #114  
Old 27.07.2011, 17:38
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Re: To all you Swiss people: Do realize how great your country is?

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Now THIS is the kind of meaningful discussion I want to see here. Thanks.

(Earlier, there has been only one meaningful reply to my original post, which I appreciated, and replied to. But since then, and until now, few have contributed anything except irrelevant drivel.)

When saying "a great way to destroy your country's economy", I think you have to take into account which parts get destroyed and which not. I don't think one should just talk about a country's "destruction" as a whole - this is the greatest error of most economic theories today. For instance, when the US "collapsed" in 2008, i.e. the banks collapsed, the free markets was giving a signal that they should have collapsed, allowing for a growth in other sectors to take place. Sadly, that was not allowed to happen.

You're right about mean reversion: The currency in the free market will overall tend to balance itself, according to imports and exports. But if the free market wants, say, farmers to go bust, then they are supposed to go bust, and other sectors are supposed to take their place, according to voluntary supply-demand schedules of producers and consumers. (Anything else is advocating violent interference into the free market.)

Thanks for the insightful info on the Swiss banks. Maybe CHF is due for a big correction indeed!
If you take a look at the chart of exports YoY vs. the CHF YoY it is the same chart up until 2008. Why? Well alot of this has to do with agricultural (dairy) prices staying elevated for the last 12 months. But normally the CHF level would imply a drop in exports of 15%! And thats the biggest risk for Switzerland. A mean reversion in exports and demand drop from China (which seems to be on the cards).

Typically though the interest rates go negative in CH before the strength ends (1966 and 1978). So the timing is the issue. If Eastern Europe goes under first (their PMI's are almost all below 50!) then you have major CHF funding issues for countries like Hungary who borrowed CHF's from Austrian banks. That, again, will make the CHF strong.

But the Swiss dont have any clue how bad exports are about to get. See chart attached.

Compared to the rest of the world though the domestic market (fueled by an age based labor shortage) should be strong for those who choose to work in local industries.
Attached Files
File Type: pdf chf trade.pdf (32.7 KB, 199 views)
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  #115  
Old 27.07.2011, 17:41
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Re: To all you Swiss people: Do realize how great your country is?

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You're right indeed. But in the free market, if exporters go out of business the market is telling that they are supposed to go out of business, and people will go work for more efficient exporters or importers.

But sadly, we don't live in free markets. The CHF fluctuation are probably caused by speculators and bankers that thrive on fractional reserve banking and other credit gimmicks. So it's a difficult situation indeed
Youre referring to a commoditized market (like Botswanian Diamants or Aussie coal).... You have to also consider higher value added goods (Swiss Watchs, Swiss Cheese, ABB Patented Products etc.).
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  #116  
Old 27.07.2011, 21:07
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Re: To all you Swiss people: Do realize how great your country is?

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You're right indeed. But in the free market, if exporters go out of business the market is telling that they are supposed to go out of business, and people will go work for more efficient exporters or importers.

But sadly, we don't live in free markets. The CHF fluctuation are probably caused by speculators and bankers that thrive on fractional reserve banking and other credit gimmicks. So it's a difficult situation indeed
People who manage their businesses badly deserve to go out of business- but how can any business plan for such a huge CHF hike over such a short period. Only two years ago, the cost of goods from CH cost 50% less than now- just due to exchange rate (never mind the extra cost of raw materials, energy, staff, etc) - very few businesses can take that kind of increase on! And of course it is the workers who suffer the most, as usual.
Come her and talk to them, if you dare
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  #117  
Old 27.07.2011, 21:19
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Re: To all you Swiss people: Do realize how great your country is?

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People who manage their businesses badly deserve to go out of business- but how can any business plan for such a huge CHF hike over such a short period. Only two years ago, the cost of goods from CH cost 50% less than now- just due to exchange rate (never mind the extra cost of raw materials, energy, staff, etc) - very few businesses can take that kind of increase on! And of course it is the workers who suffer the most, as usual.
Come her and talk to them, if you dare
Hence my second paragraph. It's indeed a difficult situation

Btw just to be clear, I'm not pretending to know the answers to all the world's problems
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  #118  
Old 27.07.2011, 21:39
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Re: To all you Swiss people: Do realize how great your country is?

Fair enough - but I do think you should come and stay in Switzerland for a while and see what it is really like. Very very few Swiss people are benefiting from the high CHF - most are suffering badly and losing their jobs, through no fault of their own. Not only have export goods doubled in price due to exchange rate + quite a bit more due to rising production costs, etc- but also many of their traditional markets have seen the value of their currency fall (Euro, Sterling, Dollar, etc) - making importing even more difficult + of course increased competition from China and other areas.

My area is doing well as it is the location for some of the most prestigious watches- and they are selling to the very rich, the new billionaires of Russia and Saudi- but most other industries are really struggling, especially engineering. Please take those rose tinted glasses off please.

BTW, hunting is strictly regulated here, with training required and clear quotas- you can't go around shooting at anything that moves here. And in Geneva, hunting is not allowed at all.
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  #119  
Old 27.07.2011, 21:49
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Re: To all you Swiss people: Do realize how great your country is?

Have you got any $ savings? Won't get you very far here. An average family house near Geneva or Zurich is about 1 and half million CHF - how much is that in $?
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  #120  
Old 27.07.2011, 21:50
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Re: To all you Swiss people: Do realize how great your country is?

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Have you got any $ savings? Won't get you very far here. An average family house near Geneva or Zurich is about 1 and half million CHF - how much is that in $?
I suspect his savings are in kronor...
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