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  #361  
Old 04.08.2011, 20:07
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Re: Swiss Franc Climbs to Record High

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... since the last one, you mean. Like hyperinflation post-WWII, for example (those are Hungarian banknotes, below):



or these little gems:



But yeah, this global currency devaluation thing is quite bad. But only if you're Swiss, Australian, Chinese or Canadian and trying to sell your widgets to Europeans or Americans.* If your trade is trans-Atlantic, your currency pairs are still roughly in the same ratio as before. Roughly.

* Situation slightly abridged for brevity.
no. i think this one will be bigger than all the previous ones - combined.
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  #362  
Old 04.08.2011, 20:30
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Re: Swiss Franc Climbs to Record High

I'd thank that post, except that it's not quite the message I want to convey ... anyway, I just hope you're wrong about that!
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  #363  
Old 04.08.2011, 20:36
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Re: Swiss Franc Climbs to Record High

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*Chills, and takes another swig of beer*

Well, there's bugger all I can do about it, is there?
You're wrong actually. Is that Swiss beer purchased from a Swiss store?

Although I realize that no one wants to pay more for their groceries in Switzerland, every trip over to Aldi or Lidl across the border isn't really helping any Swiss retailer right now.

Now would be a great time for overpriced Swiss merchants to take a good hard look at their profit margins and genuine net costs and adapt accordingly, or risk losing everything. It's the nature of the financial beast.
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  #364  
Old 04.08.2011, 20:44
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Re: Swiss Franc Climbs to Record High

I guess they are counting on rising of franc back, and know people would not take increasing prices (although maybe just to original level) lightly. But of course margins must be huge now, that's pretty simple math
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  #365  
Old 04.08.2011, 22:10
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Re: Swiss Franc Climbs to Record High

Who's up for 1.07-something by the morning?

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  #366  
Old 04.08.2011, 22:20
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Re: Swiss Franc Climbs to Record High

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You're wrong actually. Is that Swiss beer purchased from a Swiss store?

Although I realize that no one wants to pay more for their groceries in Switzerland, every trip over to Aldi or Lidl across the border isn't really helping any Swiss retailer right now.

Now would be a great time for overpriced Swiss merchants to take a good hard look at their profit margins and genuine net costs and adapt accordingly, or risk losing everything. It's the nature of the financial beast.
Exactly - yesterday I wrote pretty much the same in a different thread:

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What has really surprised me is how far and long this "fluctuation" has gone on for without any change in consumer prices for imported goods.

I don't expect prices on imported goods to be updated daily according to the FX rates, but I find it curious that practically all electronics/clothes/food bought wholesale in EUR/USD are being sold here at the same CHF price as 18 months ago. Currency speculators aren't the only one making a killing at the moment - the accountants at high-street retailers must be beaming.

It'll be interesting to see if failing to adjust the prices starts to damage the economy of the border regions of Switzerland, as the increased purchasing power in Euroland becomes harder to resist. Bern and Luzern might be prepared to take a hit on exports if the profit margins on imports climb, but Basel, Geneva and Schaffhausen might not take kindly to getting hit both on uncompetitive exports and from losing sales from increasing numbers of border hoppers.
Some (of course not all) Swiss companies will have done very well indeed from this situation, whilst the negative impacts on the economy might be felt disproportionately at the borders.
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  #367  
Old 04.08.2011, 22:40
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Re: Swiss Franc Climbs to Record High

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You're wrong actually. Is that Swiss beer purchased from a Swiss store?
Nope, it's French beer purchased at Denner, Kronenbourg 1664 50cc 12-pack, half price this week, CHF 10.80!

Picked up 4 today (cleaned them out), will check tomorrow to see if they have more.

Tom
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  #368  
Old 04.08.2011, 23:00
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Re: Swiss Franc Climbs to Record High

http://www.mindfulmoney.co.uk/6252/i...-surprise.html

Not looking too much better going forward. The Swiss bank can't really cut its rates any more than it has.
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  #369  
Old 04.08.2011, 23:04
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Re: Swiss Franc Climbs to Record High

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http://www.mindfulmoney.co.uk/6252/i...-surprise.html

Not looking too much better going forward. The Swiss bank can't really cut its rates any more than it has.
The rate cut has done nothing whatsoever -- in fact, there hasn't really been a cut; the rate is around the same as it was two days ago. And the franc is now stronger against the euro than it was before the "rate cut".
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  #370  
Old 04.08.2011, 23:08
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Re: Swiss Franc Climbs to Record High

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Who's up for 1.07-something by the morning?

It took less than an hour. So ... 1.06-something, then?

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  #371  
Old 04.08.2011, 23:19
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Re: Swiss Franc Climbs to Record High

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I hope so - but the CHF is now back where it was versus euro & US$ before the SNB made their announcement.

Usually what happens when you increase money supply in a country is that the local interest rates fall. This encourages people to move their money to other countries that pay higher interest rates so buying foreign currencies & driving down the exchange rate.
I do not see that happening here - I mean "people to move their money to other countries" - but then what do I know!!
The announcement was just an announcement, what WILL matter is the money-input to come shortly. I was astonished that already the announcement for a short moment had some impact.
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  #372  
Old 04.08.2011, 23:25
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Re: Swiss Franc Climbs to Record High

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The rate cut has done nothing whatsoever -- in fact, there hasn't really been a cut; the rate is around the same as it was two days ago. And the franc is now stronger against the euro than it was before the "rate cut".
The SNB with typical central banker flair have chosen exactly the wrong date/time/moment to make their announcement.
Better if they had kept quiet.
Now the ECB is pumping money into the eurozone again so the euro will drop more. Only question now is who can drop them faster; as the bishop said to the actress.

BTW, 3 month Libor is now 0.12% versus 0.175% before they announced the rate cut.
Happy my mortgage is variable & based on 3 month Libor.
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  #373  
Old 04.08.2011, 23:25
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Re: Swiss Franc Climbs to Record High

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The announcement was just an announcement, what WILL matter is the money-input to come shortly. I was astonished that already the announcement for a short moment had some impact.
Of course it would have an impact! Everyone knows that something is going to happen (because it's been announced), so they factor that information into their dealings. That's why, for example, companies sometimes leak information about poor performance prior to the results announcement, so that there isn't a large and sudden movement in their share price.
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  #374  
Old 04.08.2011, 23:26
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Re: Swiss Franc Climbs to Record High

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Yeah sorry, wrongly phrased. What I wanted to say is that there hasn't been one incident that has caused the Euro to crash the past week or two or has there? Is it not basically that investors have suddenly decided that the size of Spain's and Italy's debt is a big problem despite them having this debt for years or even decades?

And to answer your question my world is (still) pretty nice thanks
What has been bad has been that the crisis showd leaks and shortcomings in organisation and structure of the Euro . Helmut Schmidt and Valéry Giscard d'Estaing had clearly warned about these, but were replaced before they could finish the job and their successors did not care. I cannot tell you what exactly they had in mind, only that both in interviews in recent times stated as much as that they HAD the placement of security structures in mind.
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  #375  
Old 04.08.2011, 23:27
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Re: Swiss Franc Climbs to Record High

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The announcement was just an announcement, what WILL matter is the money-input to come shortly. I was astonished that already the announcement for a short moment had some impact.
Clearly you do not know the stock market saying "buy on the rumour & sell on the news".

The market has already factored in "the money-input to come shortly"; does not matter when it actually happens.
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  #376  
Old 04.08.2011, 23:27
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Re: Swiss Franc Climbs to Record High

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BTW, 3 month Libor is now 0.12% versus 0.175% before they announced the rate cut.
Happy my mortgage is variable & based on 3 month Libor.
OK, so it took a day or so to move. Happy for you and your mortgage -- I'm stuck with defunct British banks and can't change my products!
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  #377  
Old 04.08.2011, 23:32
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Re: Swiss Franc Climbs to Record High

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OK, so it took a day or so to move. Happy for you and your mortgage -- I'm stuck with defunct British banks and can't change my products!
Oh dear, hopefully you have other wins.
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Old 04.08.2011, 23:33
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Re: Swiss Franc Climbs to Record High

But yeah, this global currency devaluation thing is quite bad. But only if you're Swiss, Australian, Chinese or Canadian and trying to sell your widgets to Europeans or Americans.* If your trade is trans-Atlantic, your currency pairs are still roughly in the same ratio as before. Roughly.

* Situation slightly abridged for brevity.[/QUOTE]


"Post WWII" ??? I suppose you mean PRE WWII ? As there was NO heavy inflation in the 1950ies and 60ies. At least not in Western Continental Europe. In spite of Western Europe fairly swiftly recovering from the war.
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Old 04.08.2011, 23:46
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Re: Swiss Franc Climbs to Record High

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"Post WWII" ??? I suppose you mean PRE WWII ? As there was NO heavy inflation in the 1950ies and 60ies. At least not in Western Continental Europe. In spite of Western Europe fairly swiftly recovering from the war.
Post. As in after. My understanding is that WWII ended in 1945. And that 1946 comes AFTER 1945 in the usual numeric sequence. (Indeed, the top 3 worst hyperinflations of all time are all post-1945, and Greece's last spectacular contribution to the Hall of Financial Infamy was just toward the end of the war.)

Please read my post again, including the very clear table I inserted into it. Here it is again, just to help.



And who said anything about Western Continental Europe? There is a world outside this little land mass, you know.
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Old 04.08.2011, 23:49
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Re: Swiss Franc Climbs to Record High

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What has been bad has been that the crisis showd leaks and shortcomings in organisation and structure of the Euro . Helmut Schmidt and Valéry Giscard d'Estaing had clearly warned about these, but were replaced before they could finish the job and their successors did not care. I cannot tell you what exactly they had in mind, only that both in interviews in recent times stated as much as that they HAD the placement of security structures in mind.
Well you know what they say;
You can fool some of the people all of the time
& you can fool all of the people some of the time
but you cannot fool all of the people all of the time!
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