With gold already moving today on rumors of an increasingly positive tone towards Switzerland's referendum on the Gold Initiative, Axel Merk notes that it appears widely misunderstood and discusses implications for gold, the Swiss franc and Switzerland as a whole. "Gold is the people’s money, not the government’s money to splurge...gold is a store of value that ought to back the currency in circulation." Ultimately, people should never rely on their government to pursue a gold standard, but consider pursuing their own, personal gold standard.
Deutsche Bank Says "Yes" Vote Has "Narrow But Clear Lead" In Swiss Gold Referendum As 1M GOFO Hits Most Negative Since 2001Submitted by Tyler Durden on 11/14/2014 12:58 -0500
"On 30 November, the Swiss will vote in a referendum to decide whether the SNB’s constitutional mandate should be changed to require the central bank to 1) never sell any gold reserves once acquired, 2) store all its gold on Swiss territory, 3) hold at least 20% of its official reserve assets in gold. The likelihood of a yes vote is considerable. The proposal requires a simple country-wide majority to pass, as well as a majority in at least 50% of Swiss cantons. Current polling shows the ‘yes’ campaign with a narrow but clear lead and there are reasons to believe that factors on the day could be favourable for the amendment. If an affirmative vote was recorded, there is little political leeway to delay or dilute implementation."
‘Gold wars’ are intensifying with just 16 days left to polling day in the Swiss Gold Initiative. If the Swiss vote to revert to having 20% of currency reserves in gold, the Swiss National Bank will be forced to make huge purchases of gold bullion. Switzerland and its ‘Gold Initiative’ would contribute to driving the price of gold higher - likely in the short term and contributing to higher prices in the long term. Understanding the important recent past and what has led to the forthcoming Swiss Gold Initiative is important and why we look at it today. This context is all important and is essential reading for all who wish to understand the key issues in the debate, for all who invest in and own gold internationally and for all Swiss people.
Three important factors which should support gold above $1,100/oz are Chinese demand, central bank demand including from Russia and of course the Swiss Gold Referendum. We remain bearish in the short term but very bullish for 2015 and in the coming years.
"It's important to remember that a little gold goes a long way. If you had 5-10% allocation in your portfolio from 2000 to 2010, you wouldn't have suffered a lost decade" ... “I believe that now is a good time to take advantage of negative short-term trading sentiment,” Wickwire of Fidelity Investments said.
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Putting Things In Context ...
Having bounced modestly yesterday, EURCHF is testing new lows post its peg (at 1.2020 vs 1.20 peg) as the reality of the referendum on the "Save Our Swiss Gold" initiative starts to get priced in. The Swiss National Bank has decided to unleash some propaganda, as WSJ reports, Thomas Jordan, president of the Swiss National Bank, warned adoption of the so-called 'Save Our Swiss Gold' initiative would be a "fatal error of judgment." With the vote looming on Nov 30th, Jordan explains that maintaining stable prices would be harder to achieve if the call for gold repatriation and increased reserves is approved. The M.A.D. rhetoric has begun as not just stability but jobs are at stake, according to Jordan.
With the USDJPY repeatedly hitting 116.00 as a result of the same pair of headlines hitting either Reuters, the Nikkei or Sankei every 6 or so hours for the past 3 days, namely that Japan will delay its sales tax hike by almost two years, and that Abe is preparing early elections, perhaps the algos realized they were pricing in the same event about 4 times in one day, and unable to break the 7-year-high resistance level, slid dropping nearly 100 pips to just over 115 at least check, which may well be today's "tractor" level, which in turn has also dragged down both European stocks and US futures. But the thing that made the vacuum tubes really spark is that at a press conference yesterday in Beijing, Abe was quoted as saying that he "has never made any reference to the dissolution of parliament", this came after the chief cabinet secretary Suga saying that the decision on whether or not to go to the polls would be Abe’s only.
Chris Martenson is an economic researcher and futurist, specializing in energy and resource depletion, and co-founder of PeakProsperity.com. As one of the early econobloggers who forecasted the housing market collapse and stock market correction years in advance, Chris rose to prominence with the launch of his seminal video seminar, The Crash Course, that interconnected forces in the economy, energy, and the environment that are shaping the future, one that will be defined by increasing challenges as we have known it. Chris’s insights are in high demand by the media as well as academic, civic, and private organizations around the world, including institutions such as the U.N., the U.K. House of Commons, and the U.S. State Legislatures. So with that we’d like to welcome Mr. Chris
Swiss referendum is unlikely to be enacted into law, and if it is, there are several measures the SNB can do to limit its impact. Expect the SNB to defend the euro floor/franc cap.
As reported previously, and as had been suspected for years, the gold manipulation cartel is slowly breaking apart, and courtesy of the FT, we now know at least one individual directly implicated in Swiss gold-rigging: the former head of UBS's gold desk in Zurich, André Flotron. So as part of our diligence, because apparently no other media will touch the topic of gold rigging until and unless it is shoved in their face on a, ahem, silver platter, because after all the subject matter is just too "conspiratorial", we decided to ask Mr. Flotron some on the record questions, and sent him an email. This is the response we got...
The referendum for the Swiss Gold Initiative is scheduled for November 30th and the propaganda war - between the Swiss National Bank (SNB) and the Swiss Parliament on one side and the Swiss People's Party (SVP) on the other - has begun and we expect it to escalate as the day draws ever nearer. Having already questioned the 'location, location, location' of Switzerland's current gold stash, and examined the initiative in great depth here, JPMorgan notes that not only might the forthcoming Swiss gold referendum stabilize gold prices at a time when Gold ETF demand continues to decline, but warns, it also appears that markets under-appreciate this event.
“A Luxembourg structure is a way of stripping income from whatever country it comes from,’’ said Stephen E. Shay, a professor of international taxation at Harvard Law School and a former tax official in the U.S. Treasury Department. The Grand Duchy, he said, “combines enormous flexibility to set up tax reduction schemes, along with binding tax rulings that are unique. It’s like a magical fairyland.”
Dr. Faber prudently advises clients not only to diversify among asset classes but to also to diversify within asset classes. We share this view. We advise our clients to hold gold and silver in various locations and in various forms but always in secure vaults and safe jurisdictions such as Singapore or Switzerland.