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  #21  
Old 02.11.2011, 22:19
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Re: Strong franc puts Swiss tourism on downhill slope

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A) No, the present PEG is NOT sustainable. It has to be raised. This is not some "feelings" but a fight for the economic survival of Switzerland.
B) The Titanic btw. would never have sunk, hadn't the captain out of desire for a new record taken a far too risky course. This in fact was the reason why the cautious 1.20 PEG was chosen, in order not to embark on a too risky course.
C) Facts show that A) the PEG really IS too low, B) the upkeeping of the present one did not cost much at all, C) the present PEG has to be given up in favour of at least 1.30
The cost of the peg may bankrupt Switzerland, you think it's a price worth paying?

What facts are you talking about & can I have some of your happy pills?
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  #22  
Old 02.11.2011, 22:25
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Re: Strong franc puts Swiss tourism on downhill slope

Franc devaluation has consequences. Lots of them. More than we can enumerate in a single thread. They usually last for very long as well.
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  #23  
Old 02.11.2011, 22:31
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Re: Strong franc puts Swiss tourism on downhill slope

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Once the Euro starts crashing (or just losing considerable value against USD, JPY, etc.) the SNB will have to abandon the peg immediately unless it wants to impoverish the whole country!



In case you haven't noticed: The Eurozone's problems go way beyond Greece. Italy's on the brink, Portugal, Spain and Ireland aren't in great shape either, France is in danger of getting downgraded, the EFSF is basically full of hot air, German people are getting angrier day by day, etc.

The peg would make sense if this were some temporary overvaluation of the Swiss Franc but unfortunately the current situation is much more serious.
A) you for some reasons assume that the is to start crashing. Because of what exactly ?
B) German people getting angry ? This is not new. Already Adolf Hitler moved ahead on the "Volkeszorn"
C) the PEG does make sense exactly because the situation is serious and not just a temporary thing
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Old 02.11.2011, 22:35
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Re: Strong franc puts Swiss tourism on downhill slope

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The cost of the peg may bankrupt Switzerland, you think it's a price worth paying?

What facts are you talking about & can I have some of your happy pills?
No, the costs of the PEG may cost lots of money but the loss of the PEG would RUIN Switzerland. There is a price to be paid to rescue the national economy and to avoid the country getting bankrupt. I am in favour of a "flight forward" and that is to even RAISE the PEG.
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Old 02.11.2011, 22:37
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Re: Strong franc puts Swiss tourism on downhill slope

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Franc devaluation has consequences. Lots of them. More than we can enumerate in a single thread. They usually last for very long as well.
Devaluation ? You mean the urgently required correction of the exchange rate ? Which has not yet been implemented in full, but will be implemented before Christmas
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Old 02.11.2011, 22:55
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Re: Strong franc puts Swiss tourism on downhill slope

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A) you for some reasons assume that the is to start crashing. Because of what exactly ?
I do not assume anything. I just see a considerable risk of a major flight of capital out of the Eurozone which would probably cause the Euro to drop like a rock.

Why these things happen? Usually because of investors losing trust...

Or what would you do if your savings were invested in some PIIGS government bonds? just wait and pray?
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  #27  
Old 02.11.2011, 23:02
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Re: Strong franc puts Swiss tourism on downhill slope

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I do not assume anything. I just see a considerable risk of a major flight of capital out of the Eurozone which would probably cause the Euro to drop like a rock.

Why these things happen? Usually because of investors losing trust...

Or what would you do if your savings were invested in some PIIGS government bonds? just wait and pray?
You can be sure that the CH specialists know this as well. THIS is why I speak about heavy costs coming up. Right up to now, the whole affair has been astonishingly cheap. The SNB neither had to buy lots of crap money nor to go heavily into printing money, but this of course is subject to change.

You may realize that it is not the job of those in charge here to consider the fate of people who invested in lousy government bonds, but it is their job to rescue the SWISS national economy. Even if risking some of those who lousily invested going bankrupt or being driven into suicide.

The SNB has to do everything to drive those speculators into ruin or into suicide at the earliest convenience
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Old 02.11.2011, 23:05
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Re: Strong franc puts Swiss tourism on downhill slope

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I do not assume anything. I just see a considerable risk of a major flight of capital out of the Eurozone which would probably cause the Euro to drop like a rock.

Why these things happen? Usually because of investors losing trust...

Or what would you do if your savings were invested in some PIIGS government bonds? just wait and pray?

It is not just a "considerable risk", it is practically a CERTAINTY. Germany and some other major countries will have to stop the "dropping like a rock" as this would, while improving their exports, making vital imports like oil too expensive.

Most of the trade of Switzerland is done with the countries, so that Switzerland has to keep in line with its markets. As simple as that.
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Old 02.11.2011, 23:19
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Re: Strong franc puts Swiss tourism on downhill slope

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Germany and some other major countries will have to stop the "dropping like a rock"
And what if they just can't?
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  #30  
Old 02.11.2011, 23:27
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Re: Strong franc puts Swiss tourism on downhill slope

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It is not just a "considerable risk", it is practically a CERTAINTY. Germany and some other major € countries will have to stop the € "dropping like a rock" as this would, while improving their exports, making vital imports like oil too expensive.

Most of the trade of Switzerland is done with the € countries, so that Switzerland has to keep in line with its markets. As simple as that.
Switzerland made a decision not to join the Euro 10 years ago. The markets will ultimately decide the value of the CHF & Euro, governments can't control unless they make the CHF a currency that cannot be freely exchanged, rather like the till 1979.
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