3 Minute Gold News
A Quick Read for Busy People
The currency wars are on and the Swiss National Bank (SNB) just shocked all the players.
Last night, SNB de-pegged the franc from the euro — out of the blue — no warning.
The Swiss franc surged up 30% in 13 minutes.
The franc was considered a safe-haven.
In times of turmoil people bought francs, because in the past they have been stable or risen in value.
After the 2008 sub-prime crash, so much money flooded in and bought up francs that their value rose too high for Swiss export businesses to handle.
Having a strong currency hurts exports because other countries can buy more goods with less money from a currency that is cheaper.
That’s the whole point of the currency wars — cheapen your own currency so other countries will buy more from you and less from someone else.
Switzerland fixed that problem by pegging their franc to the euro. The Swiss do lots of business in euros, so European customers and Swiss businesses were assured that the ratio would stay the same — francs would float up and down with euros.
Being in a closed system like that involves trust.
The Swiss people voted ‘No’ in the Gold Referendum, and decided to trust the fiat currency, instead of keeping 20% of their reserves in physical gold and bringing their gold home. They voted in part because of assurance their currency would stay stable with this peg.
Apparently, according to Jim Rickards, even the IMF didn’t know it was coming.
People immediately feared for Swiss companies because a strong currency makes exporting more expensive. The stock market fell.
Stock markets around Europe dropped, and people jumped to the safe havens of German bunds and gold. Gold is up $33 US.
Whenever there’s a big move like the SNB did, someone made a lot of money and someone lost a whole bunch. European mortgages priced in francs just got a lot more expensive for one thing.
SNB owns lots of euros, and everyone thinks the ECB is going to do QE — everyone thinks they will print euros backed by nothing, and the euro will lose more value.
In other words — Switzerland just pretended to be part of a closed system and now jumped out first, taking the life jackets and a boat, because they think the euro ship is sinking.
When those in the know believe the weather report calls for severe winter storms, they want back the mitts they let their best friend borrow, before the friend ‘loses’ them. Take note.
When empires fall, in the games of Coins and Crowns, the individual pieces start looking out for themselves. When that starts happening, it speeds up the fall.
The Swiss must believe there’s a blinding snow storm coming in order to make them break faith and shaft so many players.
Jim Rickards believes the ECB will not do QE. He believes the US Fed will though. If that is so, then what kind of shaking up is coming next?
It’s all going down, down, down. The peasants are reeling. It’s a game of coins and crowns we’re all feeling. — Coins and Crowns
Gold is $1,262.10 US per ounce via Kitco
Market Chaos as the Swiss Franc Surges 30% in 13 Minutes, Gold Rises Sharply. via GoldCore
Here’s What the Swiss Central Bank Just Did and Why it’s Such a Shocker. via Business Week
“It’s Carnage” – Swiss Franc Soars Most Ever After SNB Abandons EURCHEF Floor; Macro Hedge Funds Crushed. via ZeroHedge
Swiss Central Bank Shocks Market With Currency ‘Tsunami’. via Reuters
Here’s What the Swiss Central Bank Just Did and Why It’s Such a Shocker. via Bloomberg
I have a Media Pass for the upcoming Cambridge House Vancouver Resources Investment Conference January 18-19. I’ll be live tweeting, and listening to a number of speakers including Bill Murphy and Chris Powell from GATA, silver specialist David Morgan, and Greg Remsburg from the TV show Gold Rush.
If you see me please say hi.
I had fun dinner with David Morgan and Mike Maloney at a previous Vancouver Resource Investment Conference. David is full of stories and facts. I loved listening to him, had a great time, and look forward to saying hello again.
The new album, Preparing for the Fall, is now available on iTunes at $9.99 for the album and $.99 for singles. The album includes the singles Wag the Dog, Black Swan Dive and Gods of the Copybook Headings. It’s a boutique live recording.
Wag the Dog (Drums of War and Backroom Banker Passes)
words and music Elaine Diane Taylor
© 2014 Intelligentsia Media Inc. All rights reserved.
from the album Preparing for the Fall available on iTunes
Another Week on Wall Street (Naked Short Selling and Fiat Currency)
words and music Elaine Diane Taylor
© 2013 Intelligentsia Media Inc. All rights reserved.
from the album Coins and Crowns available on iTunes
Coins and Crowns can be heard in Episode 1 of Mike Maloney’s documentary series The Hidden Secrets of Money.