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  #61  
Old 29.01.2013, 18:13
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Re: EURO growth versus CHF

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Never believe what central banks say, the markets will ultimately decide. There is always unlimited potential loss where currencies are concerned .
The SNB had bought German Eurobonds and shares of Nokia. The SNB even made profits in the past year, whenever there duty is to act for the national economy even if there are some "book-losses". Do not ask me how they achieved these profits as I do not understand the tricks of those central bankers.
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  #62  
Old 29.01.2013, 18:13
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Re: EURO growth versus CHF

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They print it. And by "print" I mean "enter numbers on a computer", that money is usually not materialised.
Yes, the risk is inflation and that they actually lose money when they turn the foreign assets back into CHF.
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  #63  
Old 29.01.2013, 18:22
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Re: EURO growth versus CHF

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In my opinion the "large and abrupt increase of the Euro versus the CHF" is an short-term aberration proceeding the SNB losing its battle in the currency wars. Switzerland has been creating much too much new money to buy Euros and IMO will eventually lose out when the big boys in the currency wars, the Japanese, the Brits and the ECB etc, continue to devalue their currencies at an ever faster pace.
I see the value of the S. franc being pushed up, i.e. the EUR/CHF rate dropping below 1.20 once again. To me it's inevitable!
Up to now, inflation in Switzerland has not risen dramatically, which means that Switzerland if necessary will print more money and purchase more industrial shares in the Eurozone. As the 1.20 PEG is to be defended at any costs. It is what I call "national defense".
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  #64  
Old 29.01.2013, 18:23
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Re: EURO growth versus CHF

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About "What consequences?2

They have a mountain of foreign currency that they have to manage. That is not an easy job
I'll be happy to keep an eye on it in my bank account if they want. I'll just keep the interest for my troubles.
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  #65  
Old 29.01.2013, 18:27
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Re: EURO growth versus CHF

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Depends how much and for how long the SNB wants to buy Euro`s.
The SNB never wanted to buy Euro, and in fact has changed the emphasis to the purchase of Eurobonds and industrial shares. They have to continue this until the Euro stabilises above 1.22 . Mr Jordan has repeatedly declared that he will not press the Euro farther upwards, but will not allow it to drop below 1.20 . This is actually the line of the Swiss Federal Government, and not just an idea of Mr Jordan.
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  #66  
Old 30.01.2013, 10:07
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Re: EURO growth versus CHF

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1.60 would not be nasty but excellent for Switzerland, as both the export industry and the inbound tourism would be competitive again. This would generate business and secure jobs.

In fact, many importers still calculate with a EURO rate of 1.60 and never handed the advantages onward. To profit, you had to bypass the wholesalers

A EURO at a rate of 1.60 will give the exports a decent position again, and the inbound-tourism will then recover from the massive problems of the past few years
What about the property market?

I've read many topics and many of your comments, you definitely back up a weak CHF (as it was more or less traditionally).

But I have some concerns in the medium term for Swiss citizens (or Foreigners citizens in Switzerland)... about the property market (renting/buying).

It's based on my knowledge of France, Spain and how the relative low value of the Franc/Peseta, and now Euro: It used to be common that foreigners with stronger money (Pound/krone/krona...) would snap easily interesting properties.
Leaving the locals with higher prices, higher rents, etc...

So in the current context (everything already due high probably due to high demand, low offer), I quite think that a weak chf will only attract property investments from abroad and make the market even worse.

Obviously I might be wrong but I fail to see how it could be different, especially with the "perception" that people abroad have of Switzerland...
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  #67  
Old 30.01.2013, 10:49
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Re: EURO growth versus CHF

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So in the current context (everything already due high probably due to high demand, low offer), I quite think that a weak chf will only attract property investments from abroad and make the market even worse.
I don't think so... a crappy little apartment in Zuerich will set you back a good CHF700k, at 1.2 that's nearly EUR583k and at 1.6 it's EUR437 yes it's cheaper for someone with shite loads of euros but it's still super expensive for an apartment. Fact is the reason why property is so expensive in Switzerland is because of the low interest rates full stop. This interest rates policy timebomb will wipe the whole economy again when it's reversed. And if it's not reversed we will have an asset bubble.

Conclusion is: We're *uc%ed! Whatever we do!

But let's not start talking about housing here! We're digging a biggger hole for ourselves

Edit: Changing my nick to Dr. Doom 2.0!
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  #68  
Old 30.01.2013, 11:11
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Re: EURO growth versus CHF

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A strong CHF is only bad if you need to generate CHF from a currency that isn't Swiss Francs. Playing the roulette wheel on the international markets is not what most businesses are good at. Some of us try to run our companies as efficiently as we can on the world market yet despite increased (foreign) turnover, our net profits effectively decrease as we need to pull out CHFs for most of our outgoings. And then we have to buy CHF with any currency available at a lousy exchange rate to pay for VAT on imports just to loan to the Swiss Government interest free for 3 months.

I stand by assisting export orientated companies by waiving (or at least reducing) temporary VAT payments for goods that are re-exported until the CHF finds a natural balance again. There is nothing to be lost in real terms.

Genius.
it's also gotta hurt when you spend $1bn knowing that you could have probably saved $300m if it weren't for the peg.

http://www.reuters.com/article/2013/...90D0F920130114
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  #69  
Old 30.01.2013, 11:14
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Re: EURO growth versus CHF

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What about the property market?

I've read many topics and many of your comments, you definitely back up a weak CHF (as it was more or less traditionally).

But I have some concerns in the medium term for Swiss citizens (or Foreigners citizens in Switzerland)... about the property market (renting/buying).

It's based on my knowledge of France, Spain and how the relative low value of the Franc/Peseta, and now Euro: It used to be common that foreigners with stronger money (Pound/krone/krona...) would snap easily interesting properties.
Leaving the locals with higher prices, higher rents, etc...

So in the current context (everything already due high probably due to high demand, low offer), I quite think that a weak chf will only attract property investments from abroad and make the market even worse.

Obviously I might be wrong but I fail to see how it could be different, especially with the "perception" that people abroad have of Switzerland...
it's also annoying for people with CHF who want to invest in property abroad. when CHF is high, it would be a good time to spend it, but the SNB has killed off a lot of the premium buying power.

foreign purchases instantly became ~25% more expensive.
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  #70  
Old 30.01.2013, 11:17
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Re: EURO growth versus CHF

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I don't think so... a crappy little apartment in Zuerich will set you back a good CHF700k, at 1.2 that's nearly EUR583k and at 1.6 it's EUR437 yes it's cheaper for someone with shite loads of euros but it's still super expensive for an apartment. Fact is the reason why property is so expensive in Switzerland is because of the low interest rates full stop. This interest rates policy timebomb will wipe the whole economy again when it's reversed. And if it's not reversed we will have an asset bubble.

Conclusion is: We're *uc%ed! Whatever we do!

But let's not start talking about housing here! We're digging a biggger hole for ourselves

Edit: Changing my nick to Dr. Doom 2.0!
yup anyone who bought property will probably find a massive hole in their pocket. unless rates stay low long enough for the savings to pay off the capital loss...
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  #71  
Old 30.01.2013, 11:29
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Re: EURO growth versus CHF

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What about the property market?

I've read many topics and many of your comments, you definitely back up a weak CHF (as it was more or less traditionally).

But I have some concerns in the medium term for Swiss citizens (or Foreigners citizens in Switzerland)... about the property market (renting/buying).

It's based on my knowledge of France, Spain and how the relative low value of the Franc/Peseta, and now Euro: It used to be common that foreigners with stronger money (Pound/krone/krona...) would snap easily interesting properties.
Leaving the locals with higher prices, higher rents, etc...

So in the current context (everything already due high probably due to high demand, low offer), I quite think that a weak chf will only attract property investments from abroad and make the market even worse.

Obviously I might be wrong but I fail to see how it could be different, especially with the "perception" that people abroad have of Switzerland...
If you're going to pay cash for a property, you probably haven't got that cash collecting dust on a 0.75% interest CHF savings account, but invested in a mix of stocks and funds. Most of those will have some international component so if the EUR suddenly jumps back to 1.60, that would boost the nominal value of your CHF savings by a bit and restore what you're losing on the exchange rate.
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  #72  
Old 30.01.2013, 11:56
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Re: EURO growth versus CHF

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but invested in a mix of stocks and funds. Most of those will have some international component so if the EUR suddenly jumps back to 1.60, that would boost the nominal value of your CHF savings by a bit and restore what you're losing on the exchange rate.
The theory of risk on and hope for the best...
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  #73  
Old 30.01.2013, 13:25
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Re: EURO growth versus CHF

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yup anyone who bought property will probably find a massive hole in their pocket. unless rates stay low long enough for the savings to pay off the capital loss...
Any predictions for how long the bubble may last or when the collapse might come?
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  #74  
Old 30.01.2013, 13:29
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Re: EURO growth versus CHF

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...when the collapse might come?
When everyone least expects it...
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Old 30.01.2013, 14:17
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A strong CHF is only bad if you need to generate CHF from a currency that isn't Swiss Francs. Playing the roulette wheel on the international markets is not what most businesses are good at. Some of us try to run our companies as efficiently as we can on the world market yet despite increased (foreign) turnover, our net profits effectively decrease as we need to pull out CHFs for most of our outgoings. And then we have to buy CHF with any currency available at a lousy exchange rate to pay for VAT on imports just to loan to the Swiss Government interest free for 3 months.

I stand by assisting export orientated companies by waiving (or at least reducing) temporary VAT payments for goods that are re-exported until the CHF finds a natural balance again. There is nothing to be lost in real terms.

Genius.
You should be getting interest free use of vat money, rather than the other way round.
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  #76  
Old 30.01.2013, 15:03
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Re: EURO growth versus CHF

How about Sterling gentlemen?
It's getting spanked like an S&M slave from Filthy Shades of Play!

1.4432 as we speak
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  #77  
Old 30.01.2013, 16:00
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Re: EURO growth versus CHF

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How about Sterling gentlemen?
It's getting spanked like an S&M slave from Filthy Shades of Play!

1.4432 as we speak
You have to remember that shortly after the UK pulled out of the ERM, the boom started. Having an undervalued currency is the dream of every government right now, problem is everybody can't be weak at the same time.
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  #78  
Old 30.01.2013, 16:40
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Re: EURO growth versus CHF

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You have to remember that shortly after the UK pulled out of the ERM, the boom started. Having an undervalued currency is the dream of every government right now, problem is everybody can't be weak at the same time.
Indeed everybody is printing money like crazy to try to devalue.

Problem for the euro is that the more they print the more the SNB buys

Maybe that has changed now?
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Old 30.01.2013, 16:47
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Re: EURO growth versus CHF

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It's getting spanked like an S&M slave from Filthy Shades of Play!
Bet the Tories are enjoying that!
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  #80  
Old 30.01.2013, 17:49
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Re: EURO growth versus CHF

The pound will recover as the fiscal cliff rears its ugly head again or at least when Europe realises that its still in deep sheit.
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