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View Poll Results: How long will the CHF peg hold?
Less than a day 1 0.64%
Less than a week 17 10.90%
Less than a month 24 15.38%
Until the end of the year 43 27.56%
Longer 71 45.51%
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  #1041  
Old 25.01.2015, 11:17
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

Balexert, the very convenient and the best shopping mall in the middle of geneva is completely deserted on the Saturday afternoon. Only shop where there were people is migros change, not a good sign
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  #1042  
Old 25.01.2015, 14:44
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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You wonder `?


The exchange-rate has nothing to do with the actual value. For years, the USA has tried to tie the US$ down, roughly by 40% below its actual value. Now Mr Draghi, to be known later as ATA-EURO, tries to do the same.
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  #1043  
Old 25.01.2015, 17:34
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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80% of the money I made before moving to Switzerland for the most part is still at my american bank in USD. I will stick with my Greenbacks for eternity. USD will regain its power on CHF eventually again. I miss those 2003 conversion rates visiting CH to visit family just as a teen 1USD=1.30CHF.
Long term the USD is on a downwards path against the CHF, albeit with big swings.

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...while the Swiss work MAXIMUM of 45 hpw and 43.5 is the average in Switzerland.
What's your source? Did you even care to verify your claims?

According to official statistics employees in CH work 41.6 hours a week, 45.5 weeks, for a total of 1894 a year. In practice no industry has more than 43h a week.
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  #1044  
Old 25.01.2015, 18:56
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

Anybody seen any attempt by restaurants to reduce prices?

We were "over the border" last night. Had a pizza, cordon bleu, 2 bottles of water and a half of decent Merlot; total cost CHF 34.
The lowest priced Pizzeria in the area was fully booked; their price would be circa CHF 25.

That would cost at least CHF 70 in the lowest cost Swiss Beiz within reasonable range of where I live; and their Merlot is not drinkable.
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  #1045  
Old 25.01.2015, 22:37
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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Anybody seen any attempt by restaurants to reduce prices?

We were "over the border" last night. Had a pizza, cordon bleu, 2 bottles of water and a half of decent Merlot; total cost CHF 34.
The lowest priced Pizzeria in the area was fully booked; their price would be circa CHF 25.

That would cost at least CHF 70 in the lowest cost Swiss Beiz within reasonable range of where I live; and their Merlot is not drinkable.

NO. But Shops in Zürich at present offer WAEHRUNGS-RABATT of between 10% and 40%. . Restaurants close to the border have to follow if they want to stay in the market. I remember the 1950ies when brother and me on excursions with GrandMum onto the Randen walked down to the nearest Gaschthof in Wescht-Tüütschland where things only cost 50% of SH which to an old woman living on the lousy AHV of those days really mattered. Sure, Restaurants in Schaffhausen Downtown profited and prospered on the visiting Wirtschaftswunderland-Schwaabe
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  #1046  
Old 25.01.2015, 23:50
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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The exchange-rate has nothing to do with the actual value. For years, the USA has tried to tie the US$ down, roughly by 40% below its actual value. Now Mr Draghi, to be known later as ATA-EURO, tries to do the same.
As with everything else that's bought and sold, the value of a currency is whatever people are prepared to pay for it. The exchange rate is exactly that, a statement of what the market is prepared to pay (in foreign currency) for that currency.

So you think the USD is trading about 40% below its true value? I'll happily sell you as many as you want at CHF 1.47. But no-one else will buy them at that price -- their market value is CHF 0.88 per dollar.
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  #1047  
Old 26.01.2015, 00:27
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

was at Marktkauf (in Germany just across the border from Basel) on Saturday and you could barely move anywhere... people all over the place spending cash.. we stopped by Stücky on the way back to my girlfriends house in Basel and the place was more or less completely deserted... ive been told that lots of people from Switzerland go across border to get cheaper meat and goods in France/Germany/Italy and I think this will only encourage that (damaging Swiss plazas/retail in the process)
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  #1048  
Old 26.01.2015, 00:58
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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As with everything else that's bought and sold, the value of a currency is whatever people are prepared to pay for it. The exchange rate is exactly that, a statement of what the market is prepared to pay (in foreign currency) for that currency.

So you think the USD is trading about 40% below its true value? I'll happily sell you as many as you want at CHF 1.47. But no-one else will buy them at that price -- their market value is CHF 0.88 per dollar.

NO it is NOT. the value of a currency often is determined by some finance chaps and not by people in the sense of the word. The market in case of the CHF would only pay EUR 1.00. But the finance market would pay EUR 2.00


Take 100 US$ to the USA and buy merchandise. You can purchase goods worth CHF 100.-- . Proof that the Dollar has a value of CHF 1.-- ---
and of course that the finance people are CROOKS
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  #1049  
Old 26.01.2015, 01:04
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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NO it is NOT. the value of a currency often is determined by some finance chaps and not by people in the sense of the word. The market in case of the CHF would only pay EUR 1.00. But the finance market would pay EUR 2.00


Take 100 US$ to the USA and buy merchandise. You can purchase goods worth CHF 100.-- . Proof that the Dollar has a value of CHF 1.-- ---
and of course that the finance people are CROOKS
Bollocks, Wolli, and I'm putting that mildly, since this is a family website.
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  #1050  
Old 26.01.2015, 01:05
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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was at Marktkauf (in Germany just across the border from Basel) on Saturday and you could barely move anywhere... people all over the place spending cash.. we stopped by Stücky on the way back to my girlfriends house in Basel and the place was more or less completely deserted... ive been told that lots of people from Switzerland go across border to get cheaper meat and goods in France/Germany/Italy and I think this will only encourage that (damaging Swiss plazas/retail in the process)


So sorry but what is the Sensation about it =? Swiss trade will increasingly purchase wholesale in cheap places. Those German now jubilating right now will be the losers. As already now, companies like CRAI get the business. Look around in Zürich. All the Shops give Währungs-Rabatt of 10 to 40 percent


and then look at the products. German products are losing shares to Spanish and Italian and Egyptian and Indian and Mexican products. Yes, high-tech products from Germany and Switzerland still have their market, but metal-bashing Merchandise does not

Last edited by Wollishofener; 26.01.2015 at 01:24.
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  #1051  
Old 26.01.2015, 01:42
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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NO it is NOT. the value of a currency often is determined by some finance chaps and not by people in the sense of the word. The market in case of the CHF would only pay EUR 1.00. But the finance market would pay EUR 2.00


Take 100 US$ to the USA and buy merchandise. You can purchase goods worth CHF 100.-- . Proof that the Dollar has a value of CHF 1.-- ---
and of course that the finance people are CROOKS
None of this is true. Currency markets are the biggest financial markets in the world and thus the hardest to manipulate. Even the Swiss national bank could only hold it at a certain level for a certain about of time and it nearly broke them.
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  #1052  
Old 26.01.2015, 10:22
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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Anybody seen any attempt by restaurants to reduce prices?

We were "over the border" last night. Had a pizza, cordon bleu, 2 bottles of water and a half of decent Merlot; total cost CHF 34.
The lowest priced Pizzeria in the area was fully booked; their price would be circa CHF 25.

That would cost at least CHF 70 in the lowest cost Swiss Beiz within reasonable range of where I live; and their Merlot is not drinkable.

Migros and other chains announced they would be dropping prices on certain goods. Which is what is suppose to happen, particular if their suppliers are in the Eurozone. If they want shoppers to continue shopping in Switzerland, they have to price attractively.


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Long term the USD is on a downwards path against the CHF, albeit with big swings.
Although not as steep as the Euro. There are expectations the USD will be in parity with the EURO, especially with the ECB Quantitive Easing.
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  #1053  
Old 26.01.2015, 10:24
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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None of this is true. Currency markets are the biggest financial markets in the world and thus the hardest to manipulate. Even the Swiss national bank could only hold it at a certain level for a certain about of time and it nearly broke them.

You are clueless!

http://en.wikipedia.org/wiki/Forex_scandal

Almost everything you post is outmost bull***t!
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  #1054  
Old 26.01.2015, 10:37
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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You are clueless!

http://en.wikipedia.org/wiki/Forex_scandal

Almost everything you post is outmost bull***t!

I understood those were exploitations of minute changes in daily postings, but they couldn't really manipulate exchange rate values over long periods of time, could they? They were gaming current transactions, no?
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  #1055  
Old 26.01.2015, 11:11
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

Example of real buying power by the Economist. It is the Big Mac index and you may well be familiar with it. Read the explanation

http://www.economist.com/content/big-mac-index
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  #1056  
Old 26.01.2015, 12:26
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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Migros and other chains announced they would be dropping prices on certain goods. Which is what is suppose to happen, particular if their suppliers are in the Eurozone. If they want shoppers to continue shopping in Switzerland, they have to price attractively.




Although not as steep as the Euro. There are expectations the USD will be in parity with the EURO, especially with the ECB Quantitive Easing.
About "Migros and other chains announced they would be dropping prices...."

Migros advertised they are cutting prices on 1,000 products; the average supermarket has 40,000 products.
Big deal!
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Old 26.01.2015, 12:45
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

The dining cars on international trains starting in Switzerland typically have prices in both EUR and CHF. There are some pretty good deals to be had if you go now before they get around to printing new menus.
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Old 26.01.2015, 13:01
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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About "Migros and other chains announced they would be dropping prices...."

Migros advertised they are cutting prices on 1,000 products; the average supermarket has 40,000 products.
Big deal!
They will cut prices! They have learned the lessons of last time.
Big Flashy yellow color sign: They have wonderfully reduced the prices by X %! (where X is is probably 5-10%*)

*and pocket the difference, even though they are purchasing the goods, say 20% cheaper.

But yeah it's a BIG DEAL!
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  #1059  
Old 26.01.2015, 13:09
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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...and it nearly broke them.
It did not "nearly break them". Take into account what happens behind the scene:

The SNB promised to buy €uros at 1.20 Francs minimum. Since they made this promise it would be silly to buy Francs at a lower rate, hence the market rate never(*) went below this value.

Consequently, the SNB bought €uros like hell: ~500 billion in 3 years.

What did they pay them with? Francs.
Where did they get those Francs from? Thin air. They just "produced" them by pushing a button on a computer.

The SNB now has 500 billion €uros on some account (this is all virtual), while the individuals who bought the Francs now have them in free circulation.

With this setup, now come the "real world" consequences:

Scenario 1 (the one the SNB hoped for):
Those individuals who bought the Francs _mostly_ bought the Francs as a "safe haven" currency. They never intended to use them in Switzerland and/or pay anything with these Francs, they want to swap them back into their local currency at a better rate at some later point in time. Should they do this, the Franc would gradually lose value, which the SNB could support by buying the francs back with the reserves they built. In this case they would´ve "just" avoided a huge curve in the long-run exchange rate.

Scenario 2 (the one the SNB hoped to avoid):
If the local currency (for example the €) collapses altogether, the said individuals will probably remember: "Hey, I´ve still got some Francs, so while the shit is hitting the fan in my country, I can go to Switzerland and spend the Francs I have." (~or similar ) This would then, depending on the amount of "1.20-Francs" flowing back into the country, increase inflation, possibly quite considerably.


So what happened on the 15th? MrJordan became more and more worried that Scenario 1 won´t happen anymore: With QE and the Greek elections coming up, the SNB had to increase their €-buys/Franc-sales like hell. While in 3 years they bought 500 billion €s, they added 50billion €s to the bill from the 1st to the 15th of January alone. So the potential for a sort of hyper-inflation in case of a €-collapse was becoming more of a possibility. So they decided to change strategy mid-stream.

Back to the "it nearly broke them": The SNB can produce unlimited Francs to support any rate they like. It can´t break the bank, it could only harm the value of the Franc. Something they´re not prepared to do indefinitely.

(*) please don´t ask me to expand on the "never" - I know it did happen, but after all we know now that was an error which lasted for about one minute.
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Old 26.01.2015, 13:10
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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I understood those were exploitations of minute changes in daily postings, but they couldn't really manipulate exchange rate values over long periods of time, could they? They were gaming current transactions, no?
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You are clueless!

http://en.wikipedia.org/wiki/Forex_scandal

Almost everything you post is outmost bull***t!
Please see above explanation and apologise. I'm really sorry you're about to get the Drachma again and that speaking about currency is a sore topic and that of the economy worsens here your might have to go home and auck on olive stones for the nutrition but please calm down
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