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Old 03.08.2011, 12:09
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Referendum for Gold Swiss Franc (GSF)?

I just read this article that mentions there will soon be a referendum to vote on taking a "Gold Swiss Franc" currency into effect (ie: a Swiss Franc backed by gold):
http://blogs.forbes.com/charleskadle...the-beginning/

I haven't heard/read anything locally here in Switzerland about that. Has anyone heard about that?
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Old 03.08.2011, 12:11
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Re: Referendum for Gold Swiss Franc (GSF)?

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I just read this article that mentions there will soon be a referendum to vote on taking a "Gold Swiss Franc" currency into effect (ie: a Swiss Franc backed by gold):
http://blogs.forbes.com/charleskadle...the-beginning/

I haven't heard/read anything locally here in Switzerland about that. Has anyone heard about that?
Sounds like total madness but anythings possible I suppose.
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Old 03.08.2011, 12:26
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Re: Referendum for Gold Swiss Franc (GSF)?

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I just read this article that mentions there will soon be a referendum to vote on taking a "Gold Swiss Franc" currency into effect (ie: a Swiss Franc backed by gold):
http://blogs.forbes.com/charleskadle...the-beginning/

I haven't heard/read anything locally here in Switzerland about that. Has anyone heard about that?
Only a bunch of retards would pass that. Everyone knows that gold sovereigns get taken out of circulation by citizens the moment they are circulated. The treasury would sell the coins at a loss, and for what? To get them taken out of circulation? Anyone else notice that 5CHF coins dont go further back than 1968? Thats because they were silver before then and are now hoarded.

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Old 03.08.2011, 12:30
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Re: Referendum for Gold Swiss Franc (GSF)?

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I just read this article that mentions there will soon be a referendum to vote on taking a "Gold Swiss Franc" currency into effect (ie: a Swiss Franc backed by gold):
http://blogs.forbes.com/charleskadle...the-beginning/

I haven't heard/read anything locally here in Switzerland about that. Has anyone heard about that?
Gold Franc
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Old 03.08.2011, 12:32
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Re: Referendum for Gold Swiss Franc (GSF)?

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Anyone else notice that 5CHF coins dont go past 1968? Thats because they were silver before then and are now hoarded.
Same with pre-1964 US coins:
http://goldnews.bullionvault.com/sil...ices_080220115

But I do think a currency backed by gold may need to return, since without a reference point, currencies are getting convoluted. I would vote yes to a GSF, either as a full replacement or alternative currency.
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Old 03.08.2011, 12:38
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Re: Referendum for Gold Swiss Franc (GSF)?

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Only a bunch of retards would pass that. Everyone knows that gold sovereigns get taken out of circulation by citizens the moment they are circulated. The treasury would sell the coins at a loss, and for what? To get them taken out of circulation? Anyone else notice that 5CHF coins dont go past 1968? Thats because they were silver before then and are now hoarded.


They'll make the actual coins out of gold? I thought the gold stayed in some bank vault somewhere.
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Old 03.08.2011, 12:44
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Re: Referendum for Gold Swiss Franc (GSF)?

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They'll make the actual coins out of gold? I thought the gold stayed in some bank vault somewhere.
?So they are going back to the gold standard. Thats different than a gold franc! Sorry if I was off on that. But in order for that to work they would need others to also back their currencies in gold. Its also deflationary for home prices as a gold deposit ratio is normally 10:1..... Swiss banks are leveraged 28:1 currently. So it makes no sense for Swiss people. Its short term deflationary and keeps the CHF very very strong.
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Old 03.08.2011, 12:56
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Re: Referendum for Gold Swiss Franc (GSF)?

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Same with pre-1964 US coins:
http://goldnews.bullionvault.com/sil...ices_080220115

But I do think a currency backed by gold may need to return, since without a reference point, currencies are getting convoluted. I would vote yes to a GSF, either as a full replacement or alternative currency.
I have to agree. A return to something thats backed by something other than the governments word is definitely going to be on the agenda in a global world within the next few years. I think as wealth shifts from west to east and as savings grow strongly in the east, this will only get more headlines. Its not even that hard to believe since prior to the last 40 years it has existed in some way or another. Its only impossible to conceive for current generations of people who have never lived with it. I also think the same of what finance today regards as the 'risk free rate' - because is that really government debt , its slowly becoming a joke to compare risk and reward to something thats so....well.... risky. In fact, I think its almost (IMO) certain that a gold backed standard of some sort will exist in the near future. Just look at one generation of the US dollar and its purchasing price over that period - extrapolate that a little bit more and you come to a number thats getting closer to zero every year.

I have also heard about this referendum but only know as much about it as yourself.
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Old 03.08.2011, 12:59
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Re: Referendum for Gold Swiss Franc (GSF)?

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Its also deflationary for home prices as a gold deposit ratio is normally 10:1..... Swiss banks are leveraged 28:1 currently. So it makes no sense for Swiss people. Its short term deflationary and keeps the CHF very very strong.
Only 30% of Swiss own their homes, and a house bought in CHF being paid for by someone earning wages in CHF will have no effect on anyway.

And an overly strong CHF isn't good either. Actually the SNB is trying to devalue it because it's TOO strong and causing imbalances:
http://online.wsj.com/article/BT-CO-...03-705265.html
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Old 03.08.2011, 13:09
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Re: Referendum for Gold Swiss Franc (GSF)?

Would mean the SNB having to buy a lot of gold to back the standard at a time when gold is at its highest price ever (in US$).

Sounds like a dumb idea.....
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Old 03.08.2011, 13:19
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Re: Referendum for Gold Swiss Franc (GSF)?

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Only a bunch of retards would pass that. Everyone knows that gold sovereigns get taken out of circulation by citizens the moment they are circulated. The treasury would sell the coins at a loss, and for what? To get them taken out of circulation? Anyone else notice that 5CHF coins dont go past 1968? Thats because they were silver before then and are now hoarded.
That's bull. I have one in front of me 1999 5CHF
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Old 03.08.2011, 13:20
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Re: Referendum for Gold Swiss Franc (GSF)?

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Would mean the SNB having to buy a lot of gold to back the standard at a time when gold is at its highest price ever (in US$).

Sounds like a dumb idea.....
Well, the current proposal for the GSF would be an "alternative" currency, it wouldn't replace the current CHF.

Maybe gold is at it's highest price ever, or maybe the US$ is at it's lowest point ever. Guess it depends on perspective Anyway, it's hard to tell the real price of something with a currency that has no base

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That's bull. I have one in front of me 1999 5CHF
(psst...I think he meant in the other direction )
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Old 03.08.2011, 13:29
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Re: Referendum for Gold Swiss Franc (GSF)?

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Only 30% of Swiss own their homes, and a house bought in CHF being paid for by someone earning wages in CHF will have no effect on anyway.

And an overly strong CHF isn't good either. Actually the SNB is trying to devalue it because it's TOO strong and causing imbalances:
http://online.wsj.com/article/BT-CO-...03-705265.html
Mate, Switzerland is the 6th most indebted country in the world.... Some one owns these homes. And the banks need these homes to keep their value or the value of their loan books will be worthless. If houses start to lose their value then the interest rates in CH will rise substantially. Cant see how thats good for Switzerland. If we had a gold backed currency and the banks have to raise rates due to falling real estate prices the the CHF will double in value from here.
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Old 03.08.2011, 14:48
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Re: Referendum for Gold Swiss Franc (GSF)?

Found some more info on the proposal: http://blogs.forbes.com/charleskadle...the-beginning/

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Now, in Switzerland, efforts are underway to create an official Gold Swiss franc (GSF) with a set of coins, each with a fixed content of gold. The proposed constitutional change would permit private institutions to issue an unlimited number of coins whose appearance, content and weight of gold, and definition would be under the supervision of the Swiss government.

For example, the smallest coin would have a face value of 1 GSF and have 0.1 grams of gold in its center, similar to today’s bi-metallic euro coins, and be worth—at today’s price of gold, about $4.00.

Five, 10, 20 and 50 GSF coins would have 0.5, 1.0, 2.0 and 5.0 grams of gold and today would be worth approximately $20, $40, $80 and $200 respectively. Gold Swiss franc bank notes are conceivable, as are GSF bank deposits, but they would have to be 100% backed by gold held by the issuing institution. Credit transactions would be legal, but fractional reserve credit would be forbidden under Swiss law.

“The primary purpose is to make it easy for the Swiss people to use or hold gold as an alternative to the Swiss franc and all other currencies,” explains Thomas Jacob, the man behind the gold initiative who now heads the newly founded Goldfranc Association.

In addition, Jacob believes the free coinage of Gold Swiss francs may alleviate the upward pressure on the Swiss franc. In the past year, it has shot up 15% against the euro and about double that against the dollar as people all over the world sought refuge in the Swiss currency.

The importance of this initiative occurring in Switzerland goes beyond that country’s reputation as a center of financial stability and sound banking practices through the millennia. Such a change in its constitution must be approved by the Swiss people through a referendum, and thus would demonstrate in a language politicians understand the popularity of making money again as good as gold.

Within the next few weeks, signatures will be collected to launch an initial referendum that would require the Swiss National Bank to repatriate all of its gold holdings to within the borders of Switzerland, prohibit it from selling any more of its gold, and require a minimum 20% of its assets be gold.
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Old 03.08.2011, 14:53
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Re: Referendum for Gold Swiss Franc (GSF)?

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Found some more info on the proposal: http://blogs.forbes.com/charleskadle...the-beginning/
Great, so as I suspected, its going to get hoarded and taken out of circulation. All at the expense (loss) of the tax payers of Switzerland..... Stupid idea
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Old 03.08.2011, 19:50
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Re: Referendum for Gold Swiss Franc (GSF)?

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Great, so as I suspected, its going to get hoarded and taken out of circulation. All at the expense (loss) of the tax payers of Switzerland..... Stupid idea
I'm still not following how it will be bad for anyone If a currency that was backed by gold was approved, it would basically be equal to the current gold price, no? For ex: if today a coin with a face value of 1 GSF was backed by (or contained) the same amount of gold that 1 CHF would buy, that would be acceptable, right? Tomorrow, if gold prices doubled, then that 1 GSF coin would be worth 2 CHF, right? How is this hurting anyone? It's just giving a currency with a stable reference point. Similar to what existed before. Right now, currencies are not tied to anything, and just floating around at whatever value people feel it's worth. Which is why so many people are buying into gold.
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Old 03.08.2011, 20:10
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Re: Referendum for Gold Swiss Franc (GSF)?

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I'm still not following how it will be bad for anyone If a currency that was backed by gold was approved, it would basically be equal to the current gold price, no? For ex: if today a coin with a face value of 1 GSF was backed by (or contained) the same amount of gold that 1 CHF would buy, that would be acceptable, right? Tomorrow, if gold prices doubled, then that 1 GSF coin would be worth 2 CHF, right? How is this hurting anyone? It's just giving a currency with a stable reference point. Similar to what existed before. Right now, currencies are not tied to anything, and just floating around at whatever value people feel it's worth. Which is why so many people are buying into gold.
No, No.... Youre thinking as if allllll the coins in the world are gold. What will happen when you get a couple of gold coins that keep their value compared with the other ones?

Trust me Esto, youre not going to buy anything with them. You are going to hoard them. You wont spend it. You will use it as a store of value.

So after 3 to 6 months there will be no gold coins left in circulation.

In other words normal people like you and me wouldnt ever see any of these coins. The banks would sell them in very large lots to coin dealers and they would be sold at a premium to non-Swiss buyers.

How many Kruger rands do you think there are in circulation in South Africa????? None.....
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Old 03.08.2011, 20:17
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Re: Referendum for Gold Swiss Franc (GSF)?

So if currency backed by gold is so in-demand, why did countries move away from it? As we see the pre-1960's silver-based US/Swiss coins are now worth multiple times their face-value.
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Old 03.08.2011, 20:28
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Re: Referendum for Gold Swiss Franc (GSF)?

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So if currency backed by gold is so in-demand, why did countries move away from it? As we see the pre-1960's silver-based US/Swiss coins are now worth multiple times their face-value.
Because loan growth destroys the gold deposit ratio of 10:1.... In other words economic growth is limited to short boom-bust economic cycles. The gold standard was horrible for huge swings in the economy. The US also cornered the market in gold between 1920 and 1929.... Then the great depression hit and only one country made it out alive..... France. France was the only country to keep its currency artificially low while its gold reserves went through the roof. So today everyone wants to run the "Emile Moreau" currency system. Thats why the Fed wants a week USD. During a crisis large gold reserves destroy your economy. Thats why no one can figure out why Chinas huge USD holdings are good? Its always ended in tears.

But under a gold system you have to keep a reserve ratio of 10:1. That tapped itself out. Economic growth went to zero as credit growth went to zero.

The Fed then made the Reserve Banking System that was based on USD's (there are only $64mn dollars ever created. The rest? Those are Federal Reserve Notes). But banks are allowed to be leveraged about 30:1 today.

In other words if we were to go back to the normal gold system prices would have to drop by 2/3 to put the fat-man back into his jeans. Credit growth would contract.....

How would that look? Well thats what happend in Japan starting in 1991. Its called a liquidity trap. And the Ben Bernank is scared to death of it.
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Old 03.08.2011, 20:55
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Re: Referendum for Gold Swiss Franc (GSF)?

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Would mean the SNB having to buy a lot of gold to back the standard at a time when gold is at its highest price ever (in US$).

Sounds like a dumb idea.....
They sold at the bottom so buying back now would be quite possible. Just like retail investers buy high sell low.
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