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  #21  
Old 13.07.2011, 11:13
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Re: Swiss Franc Climbs to Record High

Swiss government is already trying to put measures to ease the situation with high Franc exchange rates, which doesn't look good for employees

http://www.swissinfo.ch/eng/specials...l?cid=30659868
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  #22  
Old 13.07.2011, 11:21
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Re: Swiss Franc Climbs to Record High

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and lots of people from Germany and France saying with a big plastic smile that everything is FINE there.

I love a plastic smile.


Hr. und Fr. Kartofelkopf...
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  #23  
Old 13.07.2011, 11:33
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Re: Swiss Franc Climbs to Record High

SNB is stuck between a rock and a hard place. hopefully they've now realised that their tactic of printing and buying European bonds was a terrible mistake and there will be no more of that.

So the question will be what can/will they do to deal with the sea of liquidity and hot money from the rest of the world. I doubt they would do something as drastic as impose currency controls, but maybe they will put a tax on fixed income investments to try to make it less attractive - unlikely to work, but didn't stop them trying with QE.

Ultimately, I guess they are likely to do very little (at least little that is effective) and that's probably not a bad thing since most things that central banks have done in the last few years just made things worse.

But the continued low rates is going to add to inflationary pressures and I imagine this is going to manifest itself in various asset bubbles.
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  #24  
Old 13.07.2011, 12:35
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Re: Swiss Franc Climbs to Record High

These are great discussions. I prefer to take a contrairian view on things though.
1) As the Franc strengthens and countries see their governments struggle maybe the voters will realize that long term socialist promises are delaying the inevitable - higher taxes and debt which strangle the freedom to make adjustments to budgets and retain sovereignty.
2) Situation 1 had happened in many CEE countries, including the Baltic countries, when the Greek situation first came into the spotlight in 2008-2009.
3) Switzerland should be an advisor member to these countries (or all of Europe besides Germany and Austria) as its main problem is its wealth, and thus the worlds trust in the paper it prints for monetary value.
4) As the economies grow, and I belive that we are in a short pleateau but growth will resume in time, and inflation rears its rath, interest rates will go up and the appetite for near zero yielding assets will reverse. Look at the 10 year EURCHF chart and we see this after the 2001-2003 financial challenges.
5) There is a point, and we may be nearing it, where everyone feels that the investment in CHF is the only way forward. These are historically the peaks of investment valuations - at near zero yield and rich valutation, there is no investment case - only a safe haven case.
6) Crisis' do not last forever - there is another crisis that will take the headlines away from the EUR - if I were a betting man I would place the next spin on the China-Hong Kong markets. The world is yet to see a major boom without a major bust.

Just some contrairian opinions.
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  #25  
Old 13.07.2011, 14:17
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Re: Swiss Franc Climbs to Record High

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SNB is stuck between a rock and a hard place. hopefully they've now realised that their tactic of printing and buying European bonds was a terrible mistake and there will be no more of that.

.................
This month they announced a loss of another 11Billion CHF in 2Q 2011 due to this policy.

Consequently it is now being widely assumed that the SNB will not be able to give the Kantons their usual subsidy at the end of this year; in turn this will require additional taxes or cost savings for the Kantons to balance their books.......
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  #26  
Old 13.07.2011, 14:22
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Re: Swiss Franc Climbs to Record High

I'm not very good at maths. It was much easier in 1970 when 1£ = 10 CHF.

OINK OINK OINK

At least most of you are on the right side of the equation
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  #27  
Old 13.07.2011, 16:27
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Re: Swiss Franc Climbs to Record High

In terms of SNB losses I am a little confused. I thought the losses were valuation losses? Or did the actual government take tax money and buy Euro Bonds?
Most of the time the Federal Treasury and the government are two independent bodies right? So the governement taxes, spends, borrows etc. Then the Treasury can buy the bonds (as the US treasury did in QE2 with money it printed not money it collected in taxes or there would be no benefit) which has the effect of printing money, or control liquidity via interest rates etc. The results or P&L flows into the government at year-end but does not reflect actual revenue/expense but rather an accounting P&L.
In the end, the SNB "printed" the money that it bought the Euro Bonds with so why would the governement not have the cash to hand out to the Kantons?
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  #28  
Old 13.07.2011, 17:05
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Re: Swiss Franc Climbs to Record High

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This month they announced a loss of another 11Billion CHF in 2Q 2011 due to this policy.

Consequently it is now being widely assumed that the SNB will not be able to give the Kantons their usual subsidy at the end of this year; in turn this will require additional taxes or cost savings for the Kantons to balance their books.......
Thank you Mr Hildebrand, you moron. That's over 1bn per head of population in the quarter! Hope you saved up to pay this extra tax!

Last edited by Phil_MCR; 13.07.2011 at 17:32.
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  #29  
Old 13.07.2011, 17:13
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Re: Swiss Franc Climbs to Record High

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In terms of SNB losses I am a little confused. I thought the losses were valuation losses? Or did the actual government take tax money and buy Euro Bonds?
Most of the time the Federal Treasury and the government are two independent bodies right? So the governement taxes, spends, borrows etc. Then the Treasury can buy the bonds (as the US treasury did in QE2 with money it printed not money it collected in taxes or there would be no benefit) which has the effect of printing money, or control liquidity via interest rates etc. The results or P&L flows into the government at year-end but does not reflect actual revenue/expense but rather an accounting P&L.
In the end, the SNB "printed" the money that it bought the Euro Bonds with so why would the governement not have the cash to hand out to the Kantons?

The SNB usually shares it's profits at the end of each year by sending money to the Kantons.

this year
no SNB profit - so no send.

Last year there was also no SNB profit so they made a special one-off deal & paid out of their reserves.

p.s SNB did not buy Euro Bonds; they bought euros.
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  #30  
Old 13.07.2011, 17:21
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Re: Swiss Franc Climbs to Record High

I think it was not the Swiss Franc going up but on the opposite, the other currencies going down.

anyway the USD paper bills are worth near to nothing in real value, they only have the value the market is giving to them in the moment, and this is bound to fall more...

You are witnessing the start of the fall of the Western Civilization as we knew it.
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  #31  
Old 13.07.2011, 19:09
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Re: Swiss Franc Climbs to Record High

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I think it was not the Swiss Franc going up but on the opposite, the other currencies going down.
Because all the other governments want a weak currency. As csrknair's link shows, therein lies the dilemma for Swiss exporters and service providers - and the SNB is powerless to help them.
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  #32  
Old 13.07.2011, 21:22
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Re: Swiss Franc Climbs to Record High

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SNB is stuck between a rock and a hard place. hopefully they've now realised that their tactic of printing and buying European bonds was a terrible mistake and there will be no more of that.

So the question will be what can/will they do to deal with the sea of liquidity and hot money from the rest of the world. I doubt they would do something as drastic as impose currency controls, but maybe they will put a tax on fixed income investments to try to make it less attractive - unlikely to work, but didn't stop them trying with QE.

Ultimately, I guess they are likely to do very little (at least little that is effective) and that's probably not a bad thing since most things that central banks have done in the last few years just made things worse.

But the continued low rates is going to add to inflationary pressures and I imagine this is going to manifest itself in various asset bubbles.
I consulted an experienced former SBC (Swiss Bank Corporation / Schweiz. Bankverein) man who told me that they at SNB the last time had started their interventions some CHF -.20 too early. Next time they may rather purchase US$ or Indian Rupees or or British Pounds or whatever. The problem is that the exchange rates are increasingly the playing ground of finance-speculators. Switzerland in reality is far too small to play the role of a global reserve-currency.

You however might tell how a vote about the CH entry into the Euro could be won right now

************************************************** *****************************


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These are great discussions. I prefer to take a contrairian view on things though.
1) As the Franc strengthens and countries see their governments struggle maybe the voters will realize that long term socialist promises are delaying the inevitable - higher taxes and debt which strangle the freedom to make adjustments to budgets and retain sovereignty.
2) Situation 1 had happened in many CEE countries, including the Baltic countries, when the Greek situation first came into the spotlight in 2008-2009.
3) Switzerland should be an advisor member to these countries (or all of Europe besides Germany and Austria) as its main problem is its wealth, and thus the worlds trust in the paper it prints for monetary value.
4) As the economies grow, and I belive that we are in a short pleateau but growth will resume in time, and inflation rears its rath, interest rates will go up and the appetite for near zero yielding assets will reverse. Look at the 10 year EURCHF chart and we see this after the 2001-2003 financial challenges.
5) There is a point, and we may be nearing it, where everyone feels that the investment in CHF is the only way forward. These are historically the peaks of investment valuations - at near zero yield and rich valutation, there is no investment case - only a safe haven case.
6) Crisis' do not last forever - there is another crisis that will take the headlines away from the EUR - if I were a betting man I would place the next spin on the China-Hong Kong markets. The world is yet to see a major boom without a major bust.

Just some contrairian opinions.
1) The Socialists did NOT promise low taxes
3) Things which work fairly well in CH may not work in another place
4) The CH eco is not really up for growth but due to the exchange rates up for crisis and decline
5) Do these speculators really invest a single CHF in Switzerland, or just purchasing CHF without investing in Switzerland really ??
6) How CH is to survive the CHF crisis remains to be seen

@@@@@@@@@@@@@@@@@@@@@@@


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This month they announced a loss of another 11Billion CHF in 2Q 2011 due to this policy.

Consequently it is now being widely assumed that the SNB will not be able to give the Kantons their usual subsidy at the end of this year; in turn this will require additional taxes or cost savings for the Kantons to balance their books.......
Cantons like Zürich are not receiving subsidies but giving subsidies to other Cantons and to the union anyway.

The SNB over the past two decades made far more losses than what you quote above. This is not new at all. All this in order to stabilize a hopeless currency which increasingly is a ball in the hands of some international speculators

Let's join the Euro, BUT under ONE condition: the ECB has to be moved to Zurich and its chief must be a Swiss national


************************************************** *******************************

Last edited by Wollishofener; 13.07.2011 at 21:50.
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  #33  
Old 13.07.2011, 21:37
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Re: Swiss Franc Climbs to Record High

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Thank you Mr Hildebrand, you moron. That's over 1bn per head of population in the quarter! Hope you saved up to pay this extra tax!

Sorry, but if I divide 11 bio CHF by 7'500'000 I do not get 1 bio per head


"""""""""""""""""""""""""""""""""""""""""""""""""" """""""""""""""""""""""""""""""""""""""""""""""""" """"""""""""""""""""





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I think it was not the Swiss Franc going up but on the opposite, the other currencies going down.

anyway the USD paper bills are worth near to nothing in real value, they only have the value the market is giving to them in the moment, and this is bound to fall more...

You are witnessing the start of the fall of the Western Civilization as we knew it.
Only as long as you regard bankers as civilized and banks as civilisation

Last edited by Wollishofener; 13.07.2011 at 21:52.
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  #34  
Old 13.07.2011, 21:43
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Re: Swiss Franc Climbs to Record High

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I'm not very good at maths. It was much easier in 1970 when 1£ = 10 CHF.

OINK OINK OINK

At least most of you are on the right side of the equation
well 1£ = 9 CHF in 71
and 8.82 in Sep 72 and 8.58 in Dec 72 well, I abstained from telling father that his transfers increased in value each month
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  #35  
Old 13.07.2011, 21:46
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Re: Swiss Franc Climbs to Record High

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Sorry, but if I divide 11 bio CHF by 7'500'000 I do not get 1 bio per head
try rounding up to the nearest billion
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  #36  
Old 13.07.2011, 21:55
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Re: Swiss Franc Climbs to Record High

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try rounding up to the nearest billion
To quote George Bush SENIOR "this is not ................... this is Voodoo economics "
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  #37  
Old 13.07.2011, 22:11
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Re: Swiss Franc Climbs to Record High

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Or makes that vacation home in Italy or Tampa Bay seem more and more affordable. When life hands you lemons...
or it means I can pay my UK student loan off quicker.... got to look on the bright side
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  #38  
Old 13.07.2011, 23:21
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Re: Swiss Franc Climbs to Record High

CHF breaching .82 for USD and 1.16 for Euro. Some how I feel everything around is collapsing ..
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Old 13.07.2011, 23:29
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Re: Swiss Franc Climbs to Record High

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CHF breaching .82 for USD and 1.16 for Euro. Some how I feel everything around is collapsing ..
Wait till Italy announces it's bankruptcy soon.....Euro will worth nothing at all
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Old 14.07.2011, 00:05
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Wait till Italy announces it's bankruptcy soon.....Euro will worth nothing at all
Italy will NOT do so. As the Italian economy is NOT in a bad condition. I look forward to see how Mr Berlusconi is to tackle the problem.

My recommendation to him would be to change from Euro to CHF as currency in Italy
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