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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%
Voters: 156. You may not vote on this poll

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  #121  
Old 06.09.2011, 16:02
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Re: How long will the CHF peg hold? And what's your game plan?

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Simply put, if the Euro is the Titanic, what the SNB have done is effectively drilled a very big hole in the CHF life boat, in the hope that others will jump into one of the other lifeboats (Yen or gold for example). Problem is that if nobody jumps, then the lifeboat just goes down much, much quicker. No doubt the Japanese have also started drilling.
Isn't the situation more akin to tying a rope to the Eurotanic? A rope that can be severed in an instant if needs be.
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  #122  
Old 06.09.2011, 16:03
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Re: SNB Pegs CHF to the EUR!!!

This is so far over my head that I do not even hear the whistling sound as it passes.
I just think: "No money, no worries" hell it works for me.
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  #123  
Old 06.09.2011, 16:04
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Re: SNB Pegs CHF to the EUR!!!

Just wondering, those who are opposing the pegging to the Euro: What alternatives do you think the SNB had?
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  #124  
Old 06.09.2011, 16:05
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Re: How long will the CHF peg hold? And what's your game plan?

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With most currencies devaluing, to whom is it being given away to? I suppose to the holders of renminbi?

As the Swiss franc has risen so much over the past 5 years, the wealth that is being given away (so far) is only a small fraction of that gained very recently.
Im interested how you calculate that.
Firstly have you evaluated how long the SNB became today of Euros and how deep the offer side of eur/chf at 1.20 is?
secondly with their only option being deposits in eurobonds, what that book is going to be valued at tomorrow night after the german decision on the second round of bail outs?
have you evaluated the effect of the Italians backing out of their promise of deep austerity measures?
The depth of the SNB s appetite can only be GDP unless you want to see an S and P downgrade?
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  #125  
Old 06.09.2011, 16:06
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Re: SNB Pegs CHF to the EUR!!!

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Just wondering, those who are opposing the pegging to the Euro: What alternatives do you think the SNB had?
erm not pegging to the euro before the eurozone completes its stall and heads south
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  #126  
Old 06.09.2011, 16:06
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Re: SNB Pegs CHF to the EUR!!!

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So now that Switzerland is in the Schengen Zone and has a currency tied to the Euro, has it joined the EU "de facto"?
Well, someone will have to bail out Germany.
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  #127  
Old 06.09.2011, 16:07
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Re: SNB Pegs CHF to the EUR!!!

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Just wondering, those who are opposing the pegging to the Euro: What alternatives do you think the SNB had?
1. do nothing
2. negative interest rates
3. all of the above

maybe once the speculators pile into CHFs, the SNB will then hit them with the negative rates.
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  #128  
Old 06.09.2011, 16:07
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Re: SNB Pegs CHF to the EUR!!!

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Just wondering, those who are opposing the pegging to the Euro: What alternatives do you think the SNB had?
un petit peu de laisser-faire

o merde

(a little bit of "leave it alone")

Last edited by KeinFranzösisch; 06.09.2011 at 16:22.
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  #129  
Old 06.09.2011, 16:07
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Re: How long will the CHF peg hold? And what's your game plan?

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With most currencies devaluing, to whom is it being given away to? I suppose to the holders of renminbi?

As the Swiss franc has risen so much over the past 5 years, the wealth that is being given away (so far) is only a small fraction of that gained very recently.
Indeed - 1.20 takes us back to the exchange rate about two months ago....
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  #130  
Old 06.09.2011, 16:09
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Re: SNB Pegs CHF to the EUR!!!

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I'm no expert, but pegging the xchg rate means that if it falls below the rate, they basically have to print money. Print money=devalue currency=inflation

I'd imagine the USD rises against the CHF from its current depths...
I would imagine that the USDEUR historical rate is the one to look at to get an idea how things might go.

http://www.exchange-rates.org/history/usd/EUR/G/180

Last edited by BeastOfBodmin; 06.09.2011 at 16:09. Reason: s/wuold/would/
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  #131  
Old 06.09.2011, 16:19
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Re: SNB Pegs CHF to the EUR!!!

One thing that should happen soon as a result of the loss of a sound currency is that the price of gold will continue its relentless upward trend.
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  #132  
Old 06.09.2011, 16:21
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Re: SNB Pegs CHF to the EUR!!!

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Well, someone will have to bail out Germany.
The Germans are historically used to picking themselves up!
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  #133  
Old 06.09.2011, 16:21
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Re: SNB Pegs CHF to the EUR!!!

Should have phrased the question better: If the SNB want to ensure exchange rate stability, how else could they have achieved this without announcing a peg (floor)?

Their previous attempts didn't work. Once the political decision was made that the franc must be stable vs the euro I can't see how they could have done anything but what they have done. I'm open to hearing alternative though.

I get the argument that they could have done nothing. I would have loved that. But once farmers started complaining it was certain that the SVP would come on board and something drastic would have to be done.
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  #134  
Old 06.09.2011, 16:23
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Re: How long will the CHF peg hold? And what's your game plan?

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Im interested how you calculate that.
Firstly have you evaluated how long the SNB became today of Euros and how deep the offer side of eur/chf at 1.20 is?
secondly with their only option being deposits in eurobonds, what that book is going to be valued at tomorrow night after the german decision on the second round of bail outs?
have you evaluated the effect of the Italians backing out of their promise of deep austerity measures?
The depth of the SNB s appetite can only be GDP unless you want to see an S and P downgrade?
Purely on exchange rates. As I'm sure you know, it is not possible to know the answers to most of your questions, and you have left out the important other side of the equation - how much will this increase (at least not decrease) the wealth of all the Swiss people involved in tourism & trade - which after all is the reason for the SNB decision.

I'd be gobsmacked if the SNB are buying Greek eurobonds - Wouldn't they have bought German bunds? - perhaps we'll see the effect on the spread. Couldn't the SNB could end up profiting if a negative german decision widens the bund/eurobond spread further?
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  #135  
Old 06.09.2011, 16:27
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Re: SNB Pegs CHF to the EUR!!!

What does economisto say?
I trust that bloke, he's sold me some first class bridges
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  #136  
Old 06.09.2011, 16:27
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Re: SNB Pegs CHF to the EUR!!!

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One thing that should happen soon as a result of the loss of a sound currency is that the price of gold will continue its relentless upward trend.
Let's all buy Norwegian Krona! http://finance.yahoo.com/q?s=EURNOK=X

Until they devalue too...
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  #137  
Old 06.09.2011, 16:28
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Re: How long will the CHF peg hold? And what's your game plan?

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Purely on exchange rates. As I'm sure you know, it is not possible to know the answers to most of your questions, and you have left out the important other side of the equation - how much will this increase (at least not decrease) the wealth of all the Swiss people involved in tourism & trade - which after all is the reason for the SNB decision.

I'd be gobsmacked if the SNB are buying Greek eurobonds - Wouldn't they have bought German bunds? - perhaps we'll see the effect on the spread. Couldn't the SNB could end up profiting if a negative german decision widens the bund/eurobond spread further?
Nobody said the SNB were buying greek bonds, but the german central bank is as heavily exposed to eurozone debt as anybody, so buying german bonds is effectively the same thing, unless you believe the german will leave the euro, in which case the snb will look a bit sick with its long euro position.
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  #138  
Old 06.09.2011, 16:42
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Re: SNB Pegs CHF to the EUR!!!

so... is this going to get better or worse by tomorrow or the end of the week?

I'm in the UK for work this week and just saw all the prices increase by 8%
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  #139  
Old 06.09.2011, 16:44
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Re: SNB Pegs CHF to the EUR!!!

for those that have in CH for a while, hasn't SNB done this before with the Deutsch Mark?

What happened back then?
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  #140  
Old 06.09.2011, 16:50
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Re: How long will the CHF peg hold? And what's your game plan?

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Nobody said the SNB were buying greek bonds, but the german central bank is as heavily exposed to eurozone debt as anybody, so buying german bonds is effectively the same thing, unless you believe the german will leave the euro, in which case the snb will look a bit sick with its long euro position.
The SNB will 'make' lots of money by printing francs and converting them to eurobonds that pay interest. The extent that this interest will eventually be (more than) wiped out by eventual exchange losses is not possible to determine, but from this decision it is evident that the SNB believes that saving the tourism & export industries is more beneficial to Switzerland than making paper exchange losses. It will be interesting to see if they end up correct.
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