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Things That Make You Go Hmmm... Like The Swiss Gold Status Quo Showdown

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Authored by Grant Williams, via Mauldin Economics,

About 18 months ago, I had a very pleasant chat with a gentleman by the name of Luzi Stamm.

You may detect some measure of surprise in my words, and the reason for that is quite simple: Luzi Stamm is a politician; and, as regular readers will know, I am no fan of that particular class.

But Herr Stamm was different.

An MP representing the Swiss People’s Party, Stamm was spearheading a federal popular initiative which needed 100,000 signatures in order to comply with the Swiss parliamentary system’s rigid framework regarding referendums. (OK all you “referenda” people out there, I know, OK? But I’m going with “referendums,” so pipe down).

That initiative was one of three being pursued: firstly, a motion to limit immigration into Switzerland to 0.2% per year; secondly, a drive to abolish the flat tax system and for resident, nonworking foreigners to be taxed based instead on their income and their assets; and thirdly, Stamm’s initiative... Well, we’ll get to that shortly; but before we do, we need to understand a little about how Swiss democracy works.

(Wikipedia): Switzerland’s voting system is unique among modern democratic nations in that Switzerland practices direct democracy (also called semi-direct democracy), in which any citizen may challenge any law approved by the parliament or, at any time, propose a modification of the federal Constitution. In addition, in most cantons all votes are cast using paper ballots that are manually counted. At the federal level, voting can be organised for:

 

Elections (election of the Federal Assembly)

 

Mandatory referendums (votation on a modification of the constitution made by the Federal Assembly)

 

Optional referendums (referendum on a law accepted by the Federal Assembly and that collected 50,000 signatures of opponents)

 

Federal popular initiatives (votation on a modification of the constitution made by citizens and that collected 100,000 signatures of supporters)

 

 Approximately four times a year, voting occurs over various issues; these include both referendums, where policies are directly voted on by people, and elections, where the populace votes for officials. Federal, cantonal and municipal issues are polled simultaneously, and the majority of people cast their votes by mail. Between January 1995 and June 2005, Swiss citizens voted 31 times, to answer 103 questions (during the same period, French citizens participated in only two referendums)

 

In Swiss law, any popular initiative which achieves the milestone of 100,000 signatures MUST be put to the citizens of the country as a referendum, and in a country of just 8,061,516 people (according to the July 2014 count — never let it be said that the Swiss aren’t precise), that’s a pretty big ask; but the Swiss do love their votes — so much so that, since 1798, there has been a seemingly never-ending procession of issues which the Swiss people have been entrusted by their leaders to decide:

 

Swiss%20Votes.psd

In 2014 alone there have already been three referendums concerning such diverse issues as the minimum wage, abortion, and the financing and development of railway infrastructure. (For those of you just dying to know the outcomes, the abortion referendum, which would have dropped abortion coverage from public health insurance, failed by a large margin, with about 70% of participating voters rejecting the proposal. The railway financing was approved by 62% of the voters, and the motion that would have given Switzerland the highest minimum wage in the world — 22 francs ($23.29) an hour — was soundly defeated, with 76% of the voters saying “nein.”)

One wonders what the outcome would be of a similar motion to hike the minimum wage to such lofty heights in the US. Or in Great Britain.

The bottom line? The Swiss just think (and, importantly, vote) differently.

But back to Luzi Stamm and the SPP initiative.

Immigration and taxes aren’t uppermost in Stamm’s mind. What he IS concerned about is gold.

When we spoke on the telephone last year, Stamm explained to me that he hadn’t really properly understood the part gold played in the Swiss monetary equation until he’d had it explained to him by a friend more versed in finance (Stamm is a lawyer by background but with an economics degree from the University of Zurich); but once he understood how it all worked, Stamm realized that the changes to Swiss monetary prudence which had occurred in just a few short years were (a) potentially disastrous for the country and (b) not remotely understood by his countrymen (and women).

So Stamm decided he ought to do something about it.

The Swiss had accumulated a significant gold reserve the old-fashioned way — through seemingly constant current account surpluses — over many decades, but in May 1992 they finally joined the IMF.

Once THAT little genie was unleashed, things began to change.

In November of 1996, the Swiss Federal Council issued a draft for a new Federal Constitution, and contained within that draft was an amended position on monetary policy (article 89, in case you’re wondering) which severed the Swiss franc’s link to gold and reaffirmed the SNB’s constitutional independence:

Money and currency are a federal matter. The Confederation shall have the exclusive right to coin money and issue banknotes.

 

As an independent central bank, the Swiss National Bank shall follow a monetary policy which serves the general interest of the country; it shall be administered with the cooperation and under the supervision of the Confederation.

 

The Swiss National Bank shall create sufficient monetary reserves from its profits.

 

 At least two-thirds of the net profits of the Swiss National Bank shall be credited to the Cantons.

Spiffy.

In April 1999, the revision of the Federal Constitution was approved (how else than through a referendum?), and it came into effect on January 1, 2000.

Oh... sorry... I almost forgot to mention that in September 1999 — after the revision had been adopted but before it had been officially enacted — the SNB became one of the signatories to the Washington Agreement on Gold Sales, meaning that all that lovely Swiss gold which had been sitting there, steadily accumulating and making the Swiss franc one of the last remaining “hard” currencies on the planet, was eligible to be sold.

A single line in the Swiss National Bank’s own history of monetary policy identifies the beginning of the demise of one of the world’s great currencies:

On 2 May, the SNB begins selling gold holdings no longer required for monetary policy purposes.

And there you have it. “No longer required for monetary policy purposes.”

That’s what happens when you finally embrace the beauty of fiat. Not only do you get to sell gold, you get to call the proceeds of those sales “profits.”

The absurdity borders on breathtaking.

At the beginning of 2000, the Swiss National Bank (SNB) held roughly 2,600 tonnes of gold in its reserves. That equated to approximately 8% of total global central bank gold reserves. After the revised constitution became law, the Washington Agreement took over and... Bingo!:

 

2339.png

Swiss gold reserves were plundered gently sold in line with the Washington Agreement, and the “profits” (the language used by the SNB themselves) were distributed amongst the Swiss cantons; so everybody in a position to raise questions ended up getting a nice, fat slug of “profit” to keep them quiet help their Canton pay the bills.

Now, does anyone notice anything particular about the period when the Swiss gold sales were at their highest? Yessss... that’s right (as with the UK’s sales), the bulk of Swiss sales were made at the lows in the gold price (between $300 and $500 per ounce — blue shaded area).

To look at it another way, the Swiss National Bank went from being one of the soundest central banking institutions on Earth to just another in the morass of apologist financial institutions that lost sight of their mandates while grasping for a Keynesian free lunch, egged on by a new breed of politicians who knew nothing of the principles of sound money or, if they did, were happy to put them to the back of their minds as they extended their hands.

Sadly, as went the soundness of the SNB, so went the soundness of the Swiss franc itself.

 

2354.png

As you can see from the chart above, the SNB has, over the last two decades, oustripped its nearest rival in gold sales by a factor of three.

Adding to the fun and games was the decision in September 2011, at the height of the euro crisis, to peg the Swiss franc to the euro (something that obviously couldn’t have been done prior to breaking the gold peg) in order to stop it appreciating.

How? Why through literally unlimited printing of Swiss francs to stop the exchange rate breaking 1.20.

At the time, the SNB was unequivocal:

The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development. The Swiss National Bank is therefore aiming for a substantial and sustained weakening of the Swiss franc.

All this talk of “massive overvaluation of the Swiss franc” is utter bollocks a little disingenuous. (“Surely not!” I hear you cry.)

Between 1970 and 2008, the strength of the Swiss franc was legendary. During that time, it appreciated by 330% against the US dollar and by 57% versus the Deutsche mark/euro. Consequently, a strong currency went hand-in-hand with a strong economy. How awful.

The problem was NOT in the OVERvaluation of the Swiss franc, as the SNB would have you believe, but rather in the UNDERvaluation of the competition; and the only thing the SNB could do was to join in the great devaluation race.

That move weakened the currency by about 9% in 15 minutes, and the immediate effect on the SNB’s balance sheet was obvious:

(Mitsui Global Precious Metals): As late as the end of 2009, the SNB held 38.1 billion CHF in gold out of total reserves of 207.3 billion CHF, with gold representing a touch over 18 per cent of all its reserves. At the end of July 2014, it owned 39.1 billion Swiss Francs in gold (or 1,040 tonnes) from total reserves of 517.3 billion CHF, meaning that roughly 7.6 per cent of its assets were in the form of the yellow metal.

Note that the rise in value of Swiss gold by CHF 1 billion wasn’t enough to counter the destructive nature of overt and unchecked money printing.

 

Gold%20as%20%25%20Of%20Swiss%20Reserves%202.jpg

 

Like the Fed, the BoJ, and the BoE before them, the SNB became, at a stroke, another previously sound institution that unhesitatingly ripped its balance sheet to shreds:

 

SNB%20Assets.jpg

Since 2009, the SNB has quintupled its balance sheet, making it (on a relative basis) the most prolific of the central bank printing machines. Not bad for the world’s 96th-largest nation.

Since the EUR peg was instituted just three years ago, the SNB’s balance sheet has more than doubled.

So, with the Swiss franc’s soundness under attack from within its own borders, Luzi Stamm decided to try to use the Swiss love for referendums and the rigidity of the Swiss political process to try to reinstate the Swiss franc as a sound currency.

To that end, Stamm proposed the Swiss Gold Initiative (“Save Our Swiss Gold”).

Funnily enough, the proposal was rejected by lawmakers, but Stamm gathered three like-minded MPs and, more importantly, enough signatures on his petition (100,000) to ensure that a referendum on the proposal would take place; and that vote will happen on November 30th — six weeks from now.

Stamm pulled off a masterstroke in securing the involvement in the Swiss Gold Initiative of Egon von Greyerz who, along with being one of the most highly respected figures in the gold industry, happens to be one of the world’s nicest human beings.

We’ll get to Egon’s involvement shortly, but first let’s take a look at the motions that make up the Swiss Gold Initiative, which are threefold:

1. The gold of the Swiss National Bank must be stored physically in Switzerland.

 

2. The Swiss National Bank does not have the right to sell its gold reserves.

 

3. The Swiss National Bank must hold at least 20% of its total assets in gold.

(NB. Before we get to the part of this story where the SNB tell us how big a nightmare it would be to force them to hold 20% of their reserves in gold (come on, you KNEW that was coming), I’d point you back to the chart on page 8. Remember? The one that showed the Swiss held 18% of their reserves in gold just five short years ago?)

Addressing the motions in order, let’s begin with number 1, that all Swiss gold be physically stored in Switzerland.

Switzerland has made its name over centuries as being one of the safest places on the planet to store gold. That reputation has been good enough to convince people from all over the world to entrust their gold to the Swiss for safe-keeping. However, like many other central banks, the SNB stores a certain proportion of its gold overseas. How much? We don’t know. Where exactly is it held? We have no idea (other than “in the UK & Canada”). In fact, when the finance minister was asked, in parliament, where Switzerland’s gold was stored, his answer was something of a head scratcher:

Where this gold exactly is stored, I cannot say, because I do not know, because I do not need to know, and because I do not want to know.

Riiiight... Call me old-fashioned, but if I were a Swiss national I’d want a better answer than that.

Anyway, the spurious reason commonly given by central bankers for storing gold in places like London or New York is to have it “close to the marketplace should sales be necessary.” Obviously, if the Swiss are forbidden from selling their gold and are bound to hold a minimum of 20% of their gold reserves in gold, that argument becomes moot anyway, so shipping it home should be nice and straightforward. Just find out where “in the UK and Canada” it is (I’m sure they gave you a receipt), call them up, and tell them you’d like it back. Now that you’ve sold more than 50% of the gold, it shouldn’t take too long to physically move the rest home. Surely?

Number 2 on the initiative’s wishlist is that the SNB be prohibited from selling their gold reserves. Now, THAT might be a problem for the SNB in times to come in the “ordinary conduct of monetary policy,” but as we are some ways away from a world in which “ordinary” features in any way, shape, or form where monetary policy is concerned, I don’t think this prohibition is going to matter much. However, if you think this initiative isn’t being taken seriously, you just have to look at an excerpt from a speech given by the governor of the SNB, Thomas Jordan, a matter of days after the Swiss Gold Initiative achieved the 100,000 signatures it required to qualify as a referendum.

If you lean in real close, you can smell the fear:

(Thomas Jordan, speech to general meeting of shareholders of the Swiss National Bank, 26 April 2013): The SNB does not generally comment on any political initiatives. However, the gold initiative has a very direct impact on the SNB’s capacity to act. This is why we are taking the opportunity today to present our viewpoint for the first time on the demands of the initiative.

 

The initiators see a high level of gold reserves as a guarantee for currency stability. They fear that the Swiss franc will decline in value and that price stability will be threatened if a large proportion of the balance sheet does not consist of gold holdings. They are also concerned that the SNB’s gold reserves held abroad are not secure and will not be accessible in critical situations.

 

 We share the objectives the initiators put forward, such as maintaining currency and price stability and ensuring both the SNB’s capacity to act and its independence. However, the measures proposed to this effect are not suitable; in fact, they are even counterproductive. Instead, they are based on misunderstandings about the importance of gold in monetary policy and would compromise the SNB’s capacity to act in pursuing its monetary policy, which would run counter to the objectives envisaged. In other words, these measures would, in certain situations, considerably hinder the SNB in fulfilling its monetary policy mandate and be detrimental to Switzerland. We therefore consider it our duty to point out the serious disadvantages of the initiative already at an early stage.

Thomas, if I may?

The SNB’s desire to “maintain currency and price stability” can be summed up by this chart, which will be all too familiar to those who have studied the fiat currencies of the world, but it obviously needs trotting out one more time:

 

CHF%20Purchasing%20Power.psd

 

As for the SNB’s capacity to act in “pursuing monetary policy,” what the Gold Initiative will do is effectively stop them from printing unlimited amounts of Swiss francs in order to keep the once-mighty Swiss franc pegged to a potentially obsolete currency like the euro.

Now, I am simplifying here in the interest of expediency, and I am well aware of the restrictions that any kind of gold standard places on a central bank’s operational capability, but it’s important to understand that the Swiss franc functioned perfectly well as a partially gold-backed currency up until 1999, and the desire of the SNB to have carte blanche to debase the Swiss franc at will more flexibility in their monetary policy comes down to their wanting to employ the same tactics being resorted to by the world’s other major central banks.

If you can’t beat ’em, join ’em.

All of which leads us to perhaps the most fascinating part of the Swiss Gold Initiative: the motion to ensure that the SNB immediately acquires enough gold to back 20% of its reserves (a threshold which it must then maintain as a minimum — at a level, you know, about where they were in 2009).

Now, the numbers around this little piece of the puzzle are interesting.

In order to reach the 20% threshold, the SNB has two options open to them: they can either reduce the size of their balance sheet or buy gold.

In life, there are many limbs out onto which one should never venture, but I’m prepared to dance out onto this one like Billy Elliot:

The SNB will NOT reduce the size of their balance sheet in order to meet the 20% mandate should the motion be passed.

There. Quote me on that.

And we all know what THAT leaves, don’t we boys and girls?

Yes, in order to meet the regulations should the Gold Initiative pass, the SNB will need to buy 1,700 tons of gold at the market (assuming, of course, that they don’t expand their balance sheet further in the meantime — something that, with the increasingly weak euro, is doubtful in the extreme). That equates to roughly $70 billion or CHF 67 billion.

And we are talking physical gold. Not futures contracts or complex derivatives but the metal itself.

Put another way, 1,700 tons of gold is roughly 70% of total annual gold production.

 

%25%20of%20Production.jpg

Now, the SNB will have five years in which to reach the required 20% limit, but they will essentially need to get started immediately, because with the floor such a big buyer will put under the price and the constant expansion of their balance sheet due to that pesky euro peg, the longer they wait, the more gold they will have to buy and the less they will get for their money.

Catch Zweiundzwanzig.

How’s your attention? Grabbed yet?

OK, good.

Until now, the whole idea of this hokey little referendum has been written off as inconsequential and largely ignored by all but the most buggy of gold bugs. It was written off when Luzi Stamm announced it. It was written off when they needed to get 100,000 signatures; and, amazingly, it was ignored even once they HAD reached the magic number; but recently a number of things have happened which are making some serious waves and causing considerable unease amongst the Swiss banking establishment.

While in San Antonio recently, I was fortunate enough to chat with a displaced fellow Brit who came to meet me at the Casey Summit to talk about the Swiss Gold Initiative, and what he had to say fascinated me.

The gentleman explained a few of the nuances surrounding the framework within which the vote on the Gold Initiative will be conducted, and as I listened I realised that this little vote could potentially become a very big vote indeed.

Firstly, he noted the fact that there isn’t any “no” campaign running against the initiative. Not one that actively campaigns, at least. There will be no billboards, posters, or leaflets distributed making the case for a vote against the SGI. Thus, it’s basically up to the organizers of the initiative to get the word out and educate the Swiss public about the importance of what they’re trying to do in a vacuum.

That, of course, requires money.

During these campaigns, there is no TV or radio advertising allowed, only an old-fashioned leaflet/poster/billboard campaign (how very Swiss), which is an expensive operation to have to finance.

However, a curious quirk of Swiss politics allows anybody (and I mean ANYBODY) to make a donation to campaigns such as these from anywhere in the world — with 100% anonymity.

As our conversation continued, I learned that the initiative plans to blanket the country with billboards, posters, and leaflets and to conduct a comprehensive social media campaign to engage the vital 18-44 demographic — a strategy completely new to the somewhat antiquated world of Swiss politics.

All this felt like it was going to be rather expensive for such a small campaign, but with the donation system certainly helping their chances, Stamm & friends embarked upon their fundraising venture; and, as I mentioned previously, their first move was a masterstroke.

Over the past several years, I have been extremely fortunate, through regular encounters around the world, to have found myself in a position to call Egon von Greyerz my friend.

Egon.psd

Egon is a wonderful man with a keen intellect, a great sense of humour, and a code of ethics which is utterly above reproach. He is also now the “face” of the Swiss Gold Initiative to the gold industry.

I recently chatted with Egon about the progress being made, and what he had to say was fascinating:

Switzerland now has the opportunity to be the first country in the world with official partial gold backing of its currency. A currency backed by gold means the government and the central bank cannot manipulate the currency at will and print worthless pieces of paper that they call money. This would stabilise the real value or purchasing power of the Swiss franc. A currency with stable purchasing power leads to stable prices and promotes savings and investment rather than spending and credit. Officially Switzerland, like most countries, has a low inflation rate; but for the average person, consumer prices in the shops for food and other necessities continue to rise.

 

Even though the official Swiss inflation is low, there is massive inflation in some sectors like housing and financial assets. The money printing in Switzerland combined with artificially low interest rates have led to a major housing bubble.

 

Swiss housing prices are now unaffordable for most Swiss and in relation to income prices are now in an unsustainable bubble. An increase of Swiss mortgage rates from current 1-2% per annum to a more normal 4% could lead to major mortgage defaults and a housing collapse.

 

The Swiss have a history [of] putting some of their savings into the Vreneli, the Swiss 20 franc gold coin. In recent times, as spending on credit rather than savings has been the norm, the Swiss have bought less gold, but in spite of that they have more affinity with gold than most Western nations. The Swiss gold industry is also very significant, since Swiss refiners produce nearly 70% of the world’s gold bars.

 

The most prolific savers in gold are of course the Indians, mainly by buying jewelry. But in the last few years China has been the biggest buyer of gold. There is a constant flow of gold going from the West to the East. This has created a shortage of gold in the West.

 

The government and SNB will be very concerned about the poll results and will intensify their propaganda concerning how bad this would be for Switzerland. But as you know, the Swiss are an independent lot and don’t like the government telling them what to do. It will be extremely interesting.

Interesting indeed.

The poll that Egon refers to is the next of those things that are making waves.

The official press launch of the SGI campaign was held this past week, with Luzi and his committee and Egon speaking to the Swiss media; but AHEAD of that launch, a poll was conducted in 20 Minutes, a popular German-language free daily newspaper published both in print and online.

The question asked was simple: “How will you vote in the upcoming Save Our Swiss Gold referendum?”

The results were a surprise to just about everybody — including Luzi and Egon.

A total of 13,397 people were polled from all across Switzerland on October 15, and the poll clearly demonstrated that already — without any campaigning — there is a solid block of voters inclined to vote FOR the initiative:

 

Swiss%20Gold%20Poll%202.jpg

With the establishment being unable to actively campaign AGAINST the Initiative, all has been quiet for many months (which is why you probably haven’t heard anything about the SGI); but with the dawning awareness that this little campaign might actually grow some legs, a few members of that establishment have been getting a little antsy.

Firstly, last year when the proposal was tabled in parliament, we had this reaction:

(Centralbanking.com): Switzerland’s upper house gave the thumbs down to a controversial proposal yesterday that would force the Swiss National Bank (SNB) to more than double its gold holdings by requiring the bank to permanently hold 20% of its assets in bullion — but the rule could still ultimately become law in a popular referendum later this year.

 

The “gold initiative”, the brainchild of the right-wing Swiss People’s Party (SVP), which also calls for SNB gold to be repatriated to Switzerland — much of it is currently stored in London, New York, and Canada — is slated for a public referendum after the SVP secured 100,000 signatures in support of the measures last year.

 

Switzerland’s political establishment, however, remains vehemently opposed, fearing a gold quota would severely undermine the SNB’s ability to carry out its mandate — and their case has been helped by the poor performance of the metal over the past year.

 

Speaking before the upper house yesterday, finance minister Eveline Widmer-Schlumpf warned the “credibility of monetary policy” would be “greatly impaired” if the floor was introduced. She also described gold as “among the most volatile” and “riskiest investments” on the central bank’s books. The SNB took a $16 billion loss on its gold holdings last year as prices fell 30% — contributing significantly to a Sfr9.1 billion loss on total assets, as shown by data released by the bank today.

 

SNB governor Thomas Jordan has also slammed the idea, arguing it would severely restrain the SNB’s policy choices by restricting the flexibility of its balance sheet. In a worst-case scenario, he warned last April, the assets side of the SNB’s balance sheet would over time be largely comprised of unsellable gold, which could force the bank to turn to money creation to finance its expenses.

 

“For the SNB to fulfil its mandate at all times, its capacity to act in monetary policy matters must not be compromised by rigid rules on the composition of its balance sheet,” Jordan stressed.

It’s laughable, actually.

No word from the finance minister on the huge potential gains which were foregone when the SNB sold their gold at the lows (gains which, at today’s prices, would have been in the region of CHF 27.5 bn). No. We won’t mention those. Nor will we even bother to go anywhere near Jordan’s fears that the SNB might be “forced” to (GASP!) “turn to money creation to finance its expenses.

No. We’ll leave those well alone and instead visit a “dossier” opened by the SNB on its website a couple of weeks ago as the realization dawned upon them that the SGI won’t just “go away” if they don’t talk about it:

(Centralbanking.com): ...Now, with less than two months until the vote, the central bank is intensifying its communication. It opened a “dossier” on its website yesterday where it will post materials outlining why it “reject[s] the initiative”.

 

“Monetary policy transactions directly change our balance sheet. Restrictions on the composition of the balance sheet therefore restrict our monetary policy options,” [SNB Vice-chairman Jean-Pierre] Danthine explained.

 

“A telling example is our decision to implement the exchange rate floor vis-à-vis the euro... with the initiative’s legal limitation in place, we would have been forced during our defence of the minimum exchange rate not only to buy euros but also to buy gold in large quantities.

 

 “Our defence of the minimum exchange rate would thus have involved huge costs, which would almost certainly have caused foreign exchange markets to doubt our resolve to enforce the rate by all means.”

Sometimes I think these people are completely delusional.

So, let me get this straight: gold is a relic which restricts your ability to do such vital things as... oh, I dunno, promise to print unlimited amounts of your currency in order to peg it to another, failing currency and thereby debase it by 9% in 15 minutes? Or it might mean the market doesn’t have complete faith that you might be completely relied upon to do really smart things like that?

Disaster!

Somebody. Please? Make it stop.

The Swiss establishment has been reliant upon the public’s ignorance in these matters, but now they are up against a formidable opponent in Egon von Greyerz. Not only that, but they can clearly see that, as elsewhere around the world, the public is fast becoming disenchanted with the status quo; and that is potentially very dangerous for these people.

What is important to understand here is that if the initiative passes it will be part of the Swiss constitution IMMEDIATELY — not in two years, as many blogs and websites are suggesting. This means that the government and parliament cannot touch it. Only another referendum can change it. This is proper democracy for you.

The closer we get to the vote on November 30, the bigger this story is going to become, and the bigger it becomes, the higher the chance that the yes vote wins.

Should that happen, it will undoubtedly set off alarm bells throughout the gold market, as yet more physical gold will need to be repatriated and another sizeable, price-insensitive buyer will enter the marketplace.

Curiously, as awareness of this initiative has risen in the last month or so, two strange things have happened in the gold markets, one in the murky world of central bank gold operations, the other in the equally murky world of China’s Shanghai Gold Exchange.

Firstly, the Russian central bank (which, unlike its Western counterparts, happily publishes its dealings in the gold market for the entire world to see) made its biggest monthly purchase in 15 years in September when they purchased 1.2 million ounces:

Russian%20Gold.psd

Source: www.sharelynx.com

While in China, withdrawals from the Shanghai Gold Exchange suddenly spiked to 68.4 tonnes (the third-highest level on record):

Shanghai%20Withdrawals.psd

Do either of these moves have anything to do with pre-positioning ahead of the Swiss referendum outcome? I have absolutely no idea.

What I DO know, though, is this:

Most people have written the SGI off as a sideshow of little consequence. Most people assume that it won’t get passed. Most people assume that, if it IS passed, it won’t make any real waves.

I think most people are wrong.

I think there is a VERY good chance the motion will get passed; and I think that, when it does, it will spark calls for similar actions in neighbouring countries such as Austria, for example, or maybe the Netherlands.

I also think that the physical gold market is far too tight to be able to handle any sudden widespread demand for large-scale repatriations of gold.

This story is going to be getting more attention in the coming weeks. Already, Rick Santelli has spoken about it on CNBC, and so has Eric King in a tremendous interview (which you can listen to here), and this is only the beginning. More polls will follow, as will increasingly desperate rhetoric from the SNB.

Amidst it all, calm and confident will be my friend Egon and the tenacious Herr Stamm.

Don’t bet against them.

*  *  *

The official website for the Swiss Gold Initiative is here:

And if you’d like to make a completely anonymous donation in any amount to help the initiative fund their campaign to restore sound money at the heart of Europe, then click HERE.

At the top of the page, you’ll see a button marked “Donate.” (I’ve done it and it’s easy — oops, there goes my anonymity.)

SGI%20Banner.psd

Oftentimes, it’s movements like the Swiss Gold Initiative that cause ripples which change things for the better, and I have a feeling that the time is ripe for an unexpected outcome.

Either way, I think you’ll be seeing a lot more of this little piggy in the days and weeks to come.

 

Piggy%2018p.psd

*******

OK ... well, that went on longer than I’d planned, I’m afraid, but I think it’s an important story for you to keep an eye on. It’s not, however, the only one.

Greece is back and it’s the most unwelcome return of that word since Michelle Pfeiffer and Adrian Zmed took over from Olivia Newton-John and John Travolta. This is a movie we’ve seen before, and last time it had an extremely unhappy ending.

The German economy is starting to stall, which is leading to a few calls for “something” to be done (OK); we look at the run-up to what is turning into a very closely fought election in Brazil (the results should be coming in as this week’s TTMYGH hits your inbox); and Jim Chanos shares a lesson he learned in 1987 that has stood him in good stead ever since.

Cliff Asness brilliantly takes Paul Krugman to task over inflation (the line about the skunk and the tennis racket is worth the price of admission on its own); Liam Halligan explains why panic moneyprinting cannot save the euro; and in China we find that the housing market is starting to cause the kind of concern reserved for times when prices in 69 of 70 cities drop simultaneously.

Pater Tenebrarum answers the question of whether Ebola is a black swan; the brilliant Worth Wray lays out “A Scary Story for Emerging Markets” just in time for Halloween; and we have charts of Chinese ghost towns and Chinese red tape as well as an interview with Egon von Greyerz about the SGI, a statement read to the Swiss parliament by MP Lukas Reimann, and an word on the madness of today’s markets by Bill Fleckenstein.

*  *  *

Read the full Grant Williams letter here...

 

 

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Tue, 10/28/2014 - 21:55 | 5388409 X.inf.capt
X.inf.capt's picture

they'll never get all their gold back..

they can vote all they want...but when did a bank ever care about how the sheeple vote...

Tue, 10/28/2014 - 21:58 | 5388428 Peter Pan
Peter Pan's picture

If Switzerland is not a safe place to store its own gold then I have two questions:

1. Why are others storing their gold in Switzerland

2. Why live in Switzerland if its really not that safe?

Tue, 10/28/2014 - 22:13 | 5388483 TeethVillage88s
TeethVillage88s's picture

US-UK-Duetsch Banks have to turn Swiss banks into "US Style Banks":

They want to End this paradigm about PMs. Fiat is the Paradigm of the US-UK-Zionists. Socialism is power, Control, and the means to withhold health care & military support. But Fascism is the means to mold people into military style obedience.

http://research.stlouisfed.org/fred2/series/BKIFDCA641N (FDIC Failures)
http://research.stlouisfed.org/fred2/series/BKIRTCA641N (RTC Failures thou terminated data didn't propagate)
http://research.stlouisfed.org/fred2/series/BKFTTLA641N (all institution failures)
http://research.stlouisfed.org/fred2/series/USNUM (total Banks)
http://www.bea.gov/newsreleases/international/intinv/iip_glance.htm ($26 Trillion foreign compared to $22 for US) (This is very interesting as Big Banks are growing strongly, but the number of total us banks is dramatically decreasing, like someone is gaming the system, Commercial Banks in the U.S. - FRED - St. Louis Fed)

People
http://research.stlouisfed.org/fred2/series/GINIALLRH (Gini Ratio/Coefficient, what? discontinued?)
http://research.stlouisfed.org/fred2/series/MEHOINUSA672N (Median household income, what? discontinued?)
http://research.stlouisfed.org/fred2/series/PSAVE (Personal savings)
http://research.stlouisfed.org/fred2/series/A072RC1Q156SBEA (Personal savings percent of disposable income)
http://research.stlouisfed.org/fred2/series/B087RC1Q027SBEA (Federal Current Transfer payments)
http://research.stlouisfed.org/fred2/series/TRP6001A027NBEA (SNAP Payments, 1-1-2012)

Investment
http://research.stlouisfed.org/fred2/series/ROWFDNQ027S Foreign Investment
http://research.stlouisfed.org/fred2/series/GPDI Domestic Investment
http://www.bea.gov/newsreleases/international/intinv/iip_glance.htm

Money
http://research.stlouisfed.org/fred2/series/mult (Up to Date, but looks like Crap, eh?)
http://research.stlouisfed.org/fred2/series/M1V (M1 seems to increase with Mortgages)
http://research.stlouisfed.org/fred2/series/M2V (M2 seems to show different bubble perhaps)
http://research.stlouisfed.org/fred2/series/MZMV (MZM seems to show peak in Economy 1981)
http://research.stlouisfed.org/fred2/series/GFDEBTN (Total Debt)
http://research.stlouisfed.org/fred2/series/GFDEGDQ188S (Total Debt as percent of GDP)
http://research.stlouisfed.org/fred2/series/CP (corporate profits, 1-1-2014)

Little to show federal budget help in job formation, but this:

2013 federal Outlays Training & Employment Services = $3.48 Billion (Decreased)
2013 federal Outlays Office of Job Corps = $1.58 Billion
1999 federal Outlays Training & Employment Services = $4.68 Billion
1999 federal Outlays Training & Employment services = (maybe $267 Million as welfare to work)

On inequality & socialism: There are many social programs to help people with low income or no wages (little chance of reducing):

2013 Federal Outlays for SNAP, Child Nutrition, & WIC = $108.84 Billion
2012 Federal Outlays for SNAP, Child Nutrition, & WIC = $105.94 Billion
2011 Federal Outlays for SNAP, Child Nutrition, & WIC = $102.17 Billion
2010 Federal Outlays for SNAP, Child Nutrition, & WIC = $ 93.83 Billion

2013 Total Medicare/Medicaid = $1.1 Trillion
1999 Total Medicare/Medicaid = $390 Billion
2013 Total Social Security Admin = $870 Billion
1999 Total Social Security Admin =$421 Billion
2013 VA Medical Care = $44.7 Billion
1999 VA Medical Care = $17.8 Billion
2013 IRS Child Tax Credit = $21.6 Billion, Earned Income Tax Credit = $57.5 Billion

- Big Concern- pay outs for Pension Benefit Guaranty Corporation (federal Trust Fund), 1999 = $1.23 Billion, 2000 = $1.35 Billion, 2001 =$1.37 Billion. Okay, but today 2010 = $5.59 B, 2011 = $5.89 B, 2012 = $5.86 B, 2013 = $5.89 B. There is a continual need to supplement Pensions. 2010 PBGC's deficit increased 4.5 percent to $23 billion (Liabilities beyond assets)

- Federal direct student loan program 1999 = $52 Billion, INCREASED to 2013 = $675 Billion. (Risky)
- 2013 Total FDIC Trust Fund in Treasuries = $36.9 Billion + $18 billion in the DIF (Risky)
- 2013 Total National Credit Union Trust in Treasuries = $11.2 Billion
http://research.stlouisfed.org/fred2/series/BKIFDCA641N
http://research.stlouisfed.org/fred2/series/BKIRTCA641N
http://research.stlouisfed.org/fred2/series/BKFTTLA641N

------------
IRS, Total Outlays—Internal Revenue Service, under Treasury, 2013 = $103.3 Billion (Boom)
IRS, Total Outlays—Internal Revenue Service, under Treasury, 2000 = $38 Billion
IRS, Total Outlays—Internal Revenue Service, under Treasury, 1998 = $33.2 Billion (??? What? For what??)
-------
IRS, Payment where earned income credit exceeds liability for tax Outlays 2013 = $57.5 Billion (?What?)
IRS, Payment where earned income credit exceeds liability for tax Outlays 2000 = $26 Billion
IRS, Payment where earned income credit exceeds liability for tax Outlays 1998 = $23.2 Billion
-------
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax Outlays 2013 = $21.6 Billion (?What?)
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax Outlays 2000 = $806 Million (Million)
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax Outlays 1998 = Zero.....
-------
Total--Department of Labor Outlays 2013 = $88.5 Billion (What?)
Total--Department of Labor Outlays 2000 = $33.8 Billion
Total--Department of Labor Outlays 1998 = 32.3 Billion
-------
DOL Unemployment Trust: Federal-State Unemployment: State Benefits, Outlays 2013 = $66.9 Billion
DOL Unemployment Trust: Federal-State Unemployment: State Benefits, Outlays 2000 = $20.6 Billion
DOL Unemployment Trust: Federal-State Unemployment: State Benefits, Outlays 1998 = $19.9 Billion
-------

Based on what is happening within the IRS & the DOL, I would say that President Barak Obama's SOTU Speeches are 100% Truth!!!!! %@#@*& SNAP & WIC are $108 Billion... surely this means there are lots of jobs, jobs at home, jobs for self employment, lots of Ease for starting a small Business, and... milk & honey!!!

Tue, 10/28/2014 - 22:28 | 5388513 NoDebt
NoDebt's picture

Too long an article followed by too long a post.  Some of us have to go to work in the morning.

G'night all.

Tue, 10/28/2014 - 22:46 | 5388552 Supernova Born
Supernova Born's picture

A referendum win is the clarion call of THE Giffen good.

Wed, 10/29/2014 - 01:25 | 5388761 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

1500 (1700) tonnes is a lot of gold, some 48,225,000 toz.  The actual amount that they have to purchase may depend on the price of gold in the coming years.

FOFOA has written that it is hard to source over about 100 tonnes at once of physical gold.  Even for a central bank.  The article mentions for context that 1500 (1700) is more than half of world gold produced at all of the mines, per year.

If the SGI passes, that is going to lead to some amazing fireworks!

 

EDIT:

Those 48,000,000 or so ounces works out to about 6 oz per Swiss citizen.  

Wed, 10/29/2014 - 04:23 | 5388933 Rememberweimar
Rememberweimar's picture

Libya was going to back their currency with Gold... Suddenly the place was FULL of Terrorists that needed to be bombed into the stone age...

Wed, 10/29/2014 - 05:20 | 5388985 Tinky
Tinky's picture

Yeah, right. Were the referendum to pass, Switzerland would be bombed soon after.

Thanks for the useful analogy.

Wed, 10/29/2014 - 06:16 | 5389021 Roanman
Roanman's picture

Not by drones, but likely bombed nonetheless. In my opinion the bombs will be in the form of orders to sell paper gold into the $900s.

First of all to teach them uppity Swiss and those asshole stackers a lesson about who holds the real power in this world, and secondly in order to recover that part of Swiss Gold that has been borrowed and sold to the Chinese.

Wed, 10/29/2014 - 06:45 | 5389051 negative rates
negative rates's picture

If the people are educated well, they will make the same bad laws their neighbors make using a different system.

Wed, 10/29/2014 - 06:56 | 5389065 effendi
effendi's picture

Roanman, lowering the paper price into the $900s wouldn't harm the Swiss as they would just buy more. The lower the paper price goes then the more phys the Swiss would need to buy to make 20% by value in gold. That would destroy the paper market and then the holders of real gold would see a new and much higher price.

The Germans didn't invade neutral Switzerland for good reason and the Swiss are smart enough not to be under anyones thumbs.

Wed, 10/29/2014 - 08:16 | 5389179 Rememberweimar
Rememberweimar's picture

Germans didn't invade Switzerland because Switzerland didn't attack Germany...

Fri, 10/31/2014 - 22:50 | 5388964 Lore
Lore's picture

If the German people are smart, they will sit up and take notice, and by implication, Mrs. Merkel, you should too. 

Wed, 10/29/2014 - 09:14 | 5389342 savagegoose
savagegoose's picture

i hear isis trouble makers have been seen lurking around  swiss cantons recently

 

Wed, 10/29/2014 - 00:07 | 5388660 RaceToTheBottom
RaceToTheBottom's picture

I read the whole thing and there was nothing either in the three points or the rest of the article about leasing the swiss gold out, either now or after it supposedly comes back to the homeland.

Half of the manipulation with PMs now is because of the Fractional leasing that goes on with PMs.

Why is that not being called out to stop it??

Tue, 10/28/2014 - 23:43 | 5388657 Kirk2NCC1701
Kirk2NCC1701's picture

TOO LONG. If you're going to publish something of this length, I'd suggest you use a pen name to post it as an Article.

Wed, 10/29/2014 - 03:21 | 5388888 stacking12321
stacking12321's picture

sorry, i couldn't tell from the thread, which comment you were replying to.

was it this one?:

TeethVillage88s


Vote up!

5
Vote down!

0

US-UK-Duetsch Banks have to turn Swiss banks into "US Style Banks":

They want to End this paradigm about PMs. Fiat is the Paradigm of the US-UK-Zionists. Socialism is power, Control, and the means to withhold health care & military support. But Fascism is the means to mold people into military style obedience.

http://research.stlouisfed.org/fred2/series/BKIFDCA641N (FDIC Failures)
http://research.stlouisfed.org/fred2/series/BKIRTCA641N (RTC Failures thou terminated data didn't propagate)
http://research.stlouisfed.org/fred2/series/BKFTTLA641N (all institution failures)
http://research.stlouisfed.org/fred2/series/USNUM (total Banks)
http://www.bea.gov/newsreleases/international/intinv/iip_glance.htm ($26 Trillion foreign compared to $22 for US) (This is very interesting as Big Banks are growing strongly, but the number of total us banks is dramatically decreasing, like someone is gaming the system, Commercial Banks in the U.S. - FRED - St. Louis Fed)

People
http://research.stlouisfed.org/fred2/series/GINIALLRH (Gini Ratio/Coefficient, what? discontinued?)
http://research.stlouisfed.org/fred2/series/MEHOINUSA672N (Median household income, what? discontinued?)
http://research.stlouisfed.org/fred2/series/PSAVE (Personal savings)
http://research.stlouisfed.org/fred2/series/A072RC1Q156SBEA (Personal savings percent of disposable income)
http://research.stlouisfed.org/fred2/series/B087RC1Q027SBEA (Federal Current Transfer payments)
http://research.stlouisfed.org/fred2/series/TRP6001A027NBEA (SNAP Payments, 1-1-2012)

Investment
http://research.stlouisfed.org/fred2/series/ROWFDNQ027S Foreign Investment
http://research.stlouisfed.org/fred2/series/GPDI Domestic Investment
http://www.bea.gov/newsreleases/international/intinv/iip_glance.htm

Money
http://research.stlouisfed.org/fred2/series/mult (Up to Date, but looks like Crap, eh?)
http://research.stlouisfed.org/fred2/series/M1V (M1 seems to increase with Mortgages)
http://research.stlouisfed.org/fred2/series/M2V (M2 seems to show different bubble perhaps)
http://research.stlouisfed.org/fred2/series/MZMV (MZM seems to show peak in Economy 1981)
http://research.stlouisfed.org/fred2/series/GFDEBTN (Total Debt)
http://research.stlouisfed.org/fred2/series/GFDEGDQ188S (Total Debt as percent of GDP)
http://research.stlouisfed.org/fred2/series/CP (corporate profits, 1-1-2014)

Little to show federal budget help in job formation, but this:

2013 federal Outlays Training & Employment Services = $3.48 Billion (Decreased)
2013 federal Outlays Office of Job Corps = $1.58 Billion
1999 federal Outlays Training & Employment Services = $4.68 Billion
1999 federal Outlays Training & Employment services = (maybe $267 Million as welfare to work)

On inequality & socialism: There are many social programs to help people with low income or no wages (little chance of reducing):

2013 Federal Outlays for SNAP, Child Nutrition, & WIC = $108.84 Billion
2012 Federal Outlays for SNAP, Child Nutrition, & WIC = $105.94 Billion
2011 Federal Outlays for SNAP, Child Nutrition, & WIC = $102.17 Billion
2010 Federal Outlays for SNAP, Child Nutrition, & WIC = $ 93.83 Billion

2013 Total Medicare/Medicaid = $1.1 Trillion
1999 Total Medicare/Medicaid = $390 Billion
2013 Total Social Security Admin = $870 Billion
1999 Total Social Security Admin =$421 Billion
2013 VA Medical Care = $44.7 Billion
1999 VA Medical Care = $17.8 Billion
2013 IRS Child Tax Credit = $21.6 Billion, Earned Income Tax Credit = $57.5 Billion

- Big Concern- pay outs for Pension Benefit Guaranty Corporation (federal Trust Fund), 1999 = $1.23 Billion, 2000 = $1.35 Billion, 2001 =$1.37 Billion. Okay, but today 2010 = $5.59 B, 2011 = $5.89 B, 2012 = $5.86 B, 2013 = $5.89 B. There is a continual need to supplement Pensions. 2010 PBGC's deficit increased 4.5 percent to $23 billion (Liabilities beyond assets)

- Federal direct student loan program 1999 = $52 Billion, INCREASED to 2013 = $675 Billion. (Risky)
- 2013 Total FDIC Trust Fund in Treasuries = $36.9 Billion + $18 billion in the DIF (Risky)
- 2013 Total National Credit Union Trust in Treasuries = $11.2 Billion
http://research.stlouisfed.org/fred2/series/BKIFDCA641N
http://research.stlouisfed.org/fred2/series/BKIRTCA641N
http://research.stlouisfed.org/fred2/series/BKFTTLA641N

------------
IRS, Total Outlays—Internal Revenue Service, under Treasury, 2013 = $103.3 Billion (Boom)
IRS, Total Outlays—Internal Revenue Service, under Treasury, 2000 = $38 Billion
IRS, Total Outlays—Internal Revenue Service, under Treasury, 1998 = $33.2 Billion (??? What? For what??)
-------
IRS, Payment where earned income credit exceeds liability for tax Outlays 2013 = $57.5 Billion (?What?)
IRS, Payment where earned income credit exceeds liability for tax Outlays 2000 = $26 Billion
IRS, Payment where earned income credit exceeds liability for tax Outlays 1998 = $23.2 Billion
-------
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax Outlays 2013 = $21.6 Billion (?What?)
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax Outlays 2000 = $806 Million (Million)
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax Outlays 1998 = Zero.....
-------
Total--Department of Labor Outlays 2013 = $88.5 Billion (What?)
Total--Department of Labor Outlays 2000 = $33.8 Billion
Total--Department of Labor Outlays 1998 = 32.3 Billion
-------
DOL Unemployment Trust: Federal-State Unemployment: State Benefits, Outlays 2013 = $66.9 Billion
DOL Unemployment Trust: Federal-State Unemployment: State Benefits, Outlays 2000 = $20.6 Billion
DOL Unemployment Trust: Federal-State Unemployment: State Benefits, Outlays 1998 = $19.9 Billion
-------

Based on what is happening within the IRS & the DOL, I would say that President Barak Obama's SOTU Speeches are 100% Truth!!!!! %@#@*& SNAP & WIC are $108 Billion... surely this means there are lots of jobs, jobs at home, jobs for self employment, lots of Ease for starting a small Business, and... milk & honey!!!

Tue, 10/28/2014 - 22:22 | 5388502 daveO
daveO's picture

We'll find out how safe it is if Egon and Stamm survive a few more years!

Wed, 10/29/2014 - 06:35 | 5389029 new game
new game's picture

do they clear the runways with snowplows? hmmmm. have the swiss done away with hammers?

the hope of this passing is still fraut with banksters objection(and their power to undermine in some way) and their being forced to act against their powerbase of fiat creation (ultimatly, control of the plebs). should be epic in nature, as it puts banksters in subservant position rather than doing gods work,ha-fucking-ha. we shall see if peoples of swiss have any brains, the majority that is...

Wed, 10/29/2014 - 06:50 | 5389057 negative rates
negative rates's picture

A rather self interpreated phrase, "doing gods work" . For every interpretation, their is an equal and opposite, reinterpretation.

Tue, 10/28/2014 - 22:12 | 5388472 booboo
booboo's picture

Direct Democracy, where two wolves and one sheep vote on whats for dinner.

I see it more and more on ballot initiatives here in the U.S. Depending on your point of view some sound good, some sound bad but in reality they are all a bad practice to get into. As for the gold initiative, they will soon learn that like no means yes to a rapist, a yes vote means no to a Central Banker, so knock yourself out, it won't matter a wit.

 

Tue, 10/28/2014 - 23:08 | 5388602 AUD
AUD's picture

It won't matter a wit because it is not the ratio of gold to other assets that is critical. It is the QUALITY of those other assets. If the swiss Franc remains irredeemable, which it will, the quality of its assets won't be good as gold, & the Franc will still be junk.

Wed, 10/29/2014 - 04:28 | 5388938 Rememberweimar
Rememberweimar's picture

You are correct. Unless their currency reads "We the people", is spent by the people and is redeemable for something defined, nothing will change

Wed, 10/29/2014 - 01:50 | 5388652 Paveway IV
Paveway IV's picture

"...Direct Democracy, where two wolves and one sheep vote on whats for dinner..."

Only correct if the voting process and lawmaking are both corrupted, e.g., the United States today.

For example: if there are a million sheep and two wolves, the wolves (dual-citizen U.S. congressmen) will envoke their full satanic weasel-word and loophole skills to 1)effectively desroy a law they don't want to see voted on at all, or 2) mutate the law to some unrecognizable form that will assure either approval or defeat but have little to do with the original spirit of the proposed law.

In other words, they will behave like spoiled brats if the idea wasn't theirs or they don't personally benefit by it's passage. It's a recipe for a government of tyranny by your psychopathic overlords - masking as democracy, of course. 

The Swiss citizens essentially bypass their corrupt lawmakers by proposing the terms of the law up front. No weasel-rewording, no loopholes inserted, no carving out or ammending. To add insult to injury, they don't even allow their lawmakers to vote on the law. Imagine that in a democracy! This is the only way you can possibly reclaim a shred of true democracy if BOTH your voting process (for leaders) and their lawmaking are corrupt. 

Unlike U.S. mouth-breathers, the Swiss know that repeatedly attempting to use a corrupted leader-chosing voting process and a corrupt law and lawmaking system to fix the system itself is the pinnacle of insanity and the polar opposite of democracy. 

They don't want to vote on every single law. The useless politicians have to have some distractions to earn their bribes. What the Swiss have done is built in an uncorruptable lawmaker BITCH-SLAP. A friendly reminder of who works for whom. The Swiss have no illusions that this 'fixes' much at all in their government, but it does keep their government on a much shorter leash. Contrast this with the U.S. that lets it's government run wild - crapping on everyone elses lawn, barking and biting strangers and screwing their pets.

 

"I see it more and more on ballot initiatives here in the U.S... in reality they are all a bad practice to get into..."

A usurped voting process and usurped law/lawmaking process are also very bad practices to get into. Too late. This isn't a sterile, ideal-world academic argument. When things are really screwed up, extreme measures are called for. By default, you're saying that people are too stupid to EVER decide what rules they should follow. They must be told by 'smart' but corrupt people that are professional lawmakers. 

 

"...they will soon learn that like no means yes to a rapist,..."

Good God almighty - do you realize people here can see that part?

 

"...a yes vote means no to a Central Banker, so knock yourself out, it won't matter a wit..."

Those stooopid Swiss - won't they be embarassed as hell when the SNB tells them to fuck off, they're not buying back any of the Swiss people's damn gold they already sold for a profit! 


The Swiss are usually pretty mellow, but they have quite adequate woodchipper technology to encourage reluctant bankers to obey.

Wed, 10/29/2014 - 04:32 | 5388940 Rememberweimar
Rememberweimar's picture

"Profit" from the sale of Gold is a joke when you have a money printing press and can print yourself all the money you desire. Central Bankers do not profit from the sale of anything but worthless paper. That they profit from at the demise of their entire population. They end up owning everything and the people end up with nothing.

Wed, 10/29/2014 - 16:52 | 5391326 Paveway IV
Paveway IV's picture

"...Central Bankers do not profit from the sale of anything but worthless paper..."

You're thinking physical sale of the gold by the central bank. Why on earth would they ever want to do that? 

Member banks want to buy physical gold with their newly printed worthless paper so they can take posession of the gold and rehypothicate it a billion times over. They're only selling IOUs for the gold = worthless paper, just like you have observed.

 

Wed, 10/29/2014 - 08:18 | 5389191 StychoKiller
StychoKiller's picture

If woodchippers aren't enough, bring on the nailguns!!

Wed, 10/29/2014 - 10:46 | 5389643 booboo
booboo's picture

The overwhelming herd obviously are in agreement with direct DemoCrazy thus proving my point that the road to serfdom is on the backs of others.

Wed, 10/29/2014 - 16:57 | 5391341 Paveway IV
Paveway IV's picture

You never supported your assertion. Why, exactly, is 'direct democracy' - especially in a limited situation like the Swiss use - dangerous. For that matter, why is it any less dangerous than letting elected leaders make those choices?

Tue, 10/28/2014 - 23:55 | 5388673 Kirk2NCC1701
Kirk2NCC1701's picture

Well, what the guy above said plus the fact that Swiss democracy has 400+ years of history on its side -- of not being attacked or fighting abroad.

Their health care and education is affordable and superior to the US -- which you can afford to do when not having a MIC or an Empire.

"A little knowledge is a dangerous thing", my friend.

Wed, 10/29/2014 - 04:26 | 5388935 Ghordius
Ghordius's picture

+1. specifically, Switzerland had a "(classical) liberal revolution" in 1848 which set the constitution on which this referenda system is based

further, the Swiss National Bank is, as the article hints, in many way the template of how a national bank in a federal system ought to look like: it is a private institution under a special public law, with exchange-traded shares everybody can buy but with a (by law) restricted/maximum return. And the majority of the shares are in possession of the State banks, which belong to the federated States (aka Cantons)

and yet... don't forget Switzerland's economy

and don't even think for a moment that the SNB's decision to peg (technically a floor) the CHF to the EUR was not highly political and widely discussed

fact is that the whole world is in a currency war, with all currencies devaluating, the big boyz in front, the small ones following

fact is that Switzerland's economy is very varied. it includes tourism. which has a cost structure where labour is an important part. tourism was the first industry in crying for a devaluation of the CHF. tourism is the first industry that was appeased by the peg to the EUR

fact is that the rest of Switzerland's economy (all the non-banking part, particularly industrial production) is tightly integrated with that of the eurozone

fact is that this integration is so strong (another word for that is exports are relevant), that a huge chunk of the Swiss products' - particularly industrial components - price lists are in EUR

and there you have it, in all it's beauty and ugliness. it's fine to call for an end of this devaluation battle. but can a small, open economy be the first?

if the CHF is allowed to soar, tourists will go to Austria or France for their skiing, Chinese and Japanese tourists will visit Paris and Vienna instead of Geneva or Lucerne. this is not empty prognostication, this happened before the "floor"

if the CHF is allowed to soar, all the industrial component deliverers are simply priced out, and have to shift their production elsewhere, perhaps to France, Italy, Germany or Slovenia, perhaps to the East, as many are already doing

it's easy to sit somewhere in the dollarzone and cheer little Switzerland to fight against the monetary tides. I, sitting in the eurozone, wince about the consequences

further, I ask if the second part of the referendum is really pro-gold. forbidding it's sale... well, that's what Nixon did 1971

think about that: Nixon forbade gold selling against the dollar. the most anti-gold measure taken... ever, and the true start of this monetary mess

Wed, 10/29/2014 - 04:34 | 5388945 Rememberweimar
Rememberweimar's picture

Fact is that globally all goods and services currently flow towards the Federal Jewish Reserve

Wed, 10/29/2014 - 05:10 | 5388979 goldsaver
goldsaver's picture

I ask if the second part of the referendum is really pro-gold. forbidding it's sale... well, that's what Nixon did 1971 think about that: Nixon forbade gold selling against the dollar. the most anti-gold measure taken... ever, and the true start of this monetary mess

I thought about it when it was first brought up a few days ago. No, its not the same thing. The difference lies in the mandated reserve ratio. The US dollar under Nixon had a notional fixed relation with gold ($34.50 an ounce) but it was only notional. The Fed was free to print as many dollars as they wanted without any reference to the gold holdings. The SNB will be required to maintain a 20% of reserves in gold. That will put a huge brake in its ability to devalue the CHF. In effect the Gold Initiative uses gold not as a reserve but as an anchor tot he expansion of the balance sheet.

Wed, 10/29/2014 - 10:56 | 5389004 Ghordius
Ghordius's picture

as in the last time, I have to clarify

remember that

- between 1934 and 1974, it was forbidden to hold gold for private persons in the US. a "US Gold Prohibition"

- gold was spent against dollars, by the NY-FED, to foreigners (mostly foreign national banks)

- then Nixon closed this "Gold Window", which amounted to forbidding the FED/Treasury to sell gold against dollars: the USD became a "fiat" currency

as I clarified last time, here

this Swiss referendum has three parts

1) repatriation of Swiss gold (similar to what Germany is asking) and

2) the SNB to buy more gold, up to 20% of it's balance sheet and

3) the SNB to be forbidden to sell gold, in any case whatsoever

The second part is what you mean about reserve ratio sorry for switching the order, in the comment above I called the 3) the second part

It's the third part that is as anti-gold as the "Nixon Shock". The whole reason for the reserve ratio or a gold backing lies in selling gold when gold is high and the national (gold-backed) currency is too low

Because if you would have such a system, eventually all gold would vanish from the market, and so have no price

But in the medium term, it gives the currency only one way: up. And this could break such a small, open economy. This kind of policies can only work for big, "semi-open" economies and currency zones. And even the eurozone is not big or dominant enough for this kind of things. Which leaves the dollarzone

And so look at the dollarzone: gold is there (at least in theory). But it won't be sold. So is the USD gold-backed? no. the current ratio of gold to USD is irrelevant, because Nixon's decree is still forbidding gold sales

nevertheless, you are correct: it's about using gold as an anchor instead of... the EUR (and the USD). which would then leave the question: to whom do the Swiss sell their winter holidays and their industrial components?

all in all, this referendum asks to switch the CHF's anchor from the current monetary environment to something like the opposite. the gold price is being manipulated, remember? Even if you don't believe that: the gold price is very volatile, at the moment. the CHF would become something like the butt of the pro-USD manipulations, or if you prefer, from the vagaries of the market, to be trashed down or up versus the currency of current anchor of the Swiss economy: the eurozone

is this... price stability? as a small entrepreneur, I can tell you this would be hell for the Swiss SMEs. they need to calculate... in EUR. they can't even now price their products and services in CHF on their pricelists, competition in the eurozone being so hard

in fact, this very proposal might do just this: having Switzerland's economy to completely switch from the CHF to the EUR. bad money drives good money out

stated differently: fiat has only one advantage versus gold-backed schemes: it's flexible. this translates into big fiat currencies breaking small backed and brittle currencies

unless a big (with a semi-closed economy) currency zone switches to backed, all those schemes have little chance of succeding. size and openness matter

a big boy like the dollar can be unflexible. a small boy like the CHF has to be flexible... or be pushed out of the very way... like gold, which is currently money, but not really a currency

Wed, 10/29/2014 - 12:52 | 5390270 AvoidingTaxation
AvoidingTaxation's picture

To clarify:

3) the SNB to be forbidden to sell gold, in any case whatsoever

Sure. The Unelected SNB bureacrats. Not a new referendum.

Remember it is "SAVE OUR SWISS GOLD". It is not theirs. It is ours.

 

Spain is not Uganda

The US Corp is not Switzerland.

Running for the 714 year in the game.

I for myself, will vote "SI" to this brilliant initiative, same for ECOPOP the same day (the population cap) and "No" to the socialist driven ending of the fiscal forfaits.

 

P.S about the tourism and other export oriented victims. How they did between 1920 and 2011? It is hard for everybody out there. And anyway if there is a massive economic crisis, we can just kick off the 26% of foreigners first. How about a less stressed, less criminal, less crowded, less polluted place to go for tourism?

Thu, 10/30/2014 - 04:56 | 5392684 Ghordius
Ghordius's picture

of course, what the Swiss People bind this year they might unbind next year, the prerogative and tradition of a truly Sovereign People that uses referenda the right way

yet in Switzerland the tradition is also about discussing the quality of the referenda. my criticism is that they should actually be three of them, not one

repatriation is one thing. as such, repatriation is moderately against the use of gold for currency management, because it moderately hinders sales

the quota of gold versus the national bank's balance sheet is a different thing. as such, it moderately hinders flexible management of the currency

and the sale prohibition is a different thing again, which again hinders flexible currency management

which leads me to the question: if the whole thing is about having a national hoard of gold, shouldn't the referendum be structured in a completely different way? put it differently, shouldn't the Swiss Federation buy gold independently from the national bank?

this hints at the difference between a Treasury and a National Bank, and the difference between sound money and flexible currency, the needs of a People and the needs of a national economy

I repeat: in this current environment, if this referendum goes through, the CHF could become so much like gold... that the Swiss economy faces very hard choices, involving either becoming part of the eurozone de facto or offshoring parts of it or other violent adjustments

but the Swiss are flexible, so I could even imagine small and medium companies switching their labour contracts to... EUR. as I am fond to repeat, note how many of their price lists and price calculations are already in EUR

Wed, 10/29/2014 - 07:16 | 5389090 Direct Democracy
Direct Democracy's picture

You don't understand how direct democracy works.  One person, one vote, double majority required to pass a law.  Politians are self-serving liars and are puppets to the corporations.  Imagine, taking away their power and control and giving it to the people.  Things wouldn't be so fucked up!!

Tue, 10/28/2014 - 23:41 | 5388655 effendi
effendi's picture

That is the thing most people don't get. The Swiss are not sheeple and they all have plenty of big black scary guns stored within easy reach (mandatory for national defence). They also control the gold  refineries and they will decide to take their share first.

If the banksters play up the Swiss can also sieze their Swiss bank accounts and SDBs. 

 

Wed, 10/29/2014 - 03:05 | 5388851 CASTBOUND
CASTBOUND's picture

my best friend's sister makes $80 /hour on the internet . She has been laid off for 7 months but last month her paycheck was $13987 just working on the internet for a few hours. visit site... www.Yelptrade.com

Tue, 10/28/2014 - 21:56 | 5388416 jon dough
jon dough's picture

Luzi, you got a lot a 'splainin to do!

Tue, 10/28/2014 - 21:57 | 5388423 TeamDepends
TeamDepends's picture

Go Switzerland, do the right thing! This fiat madness must end.

Tue, 10/28/2014 - 23:06 | 5388592 red1chief
red1chief's picture

They are part of the empire, which will not allow them to get their gold back.  The Germans tried, and were simply told "no".

Wed, 10/29/2014 - 03:16 | 5388884 stacking12321
stacking12321's picture

that's ok, too.

i want to hear the empire say no - there will be an uproar in switzerland and people worldwide will understand that the empire doesn't have the gold and the emperor has no clothes.

Wed, 10/29/2014 - 04:36 | 5388946 Rememberweimar
Rememberweimar's picture

Where do you think all their Gold is, outer space?

Of course they have the Gold

Wed, 10/29/2014 - 08:24 | 5389207 StychoKiller
StychoKiller's picture

WHO is "they?"  Check yer premises (and all the ZeroHedge articles on Au/Ag manipulations)

Tue, 10/28/2014 - 22:06 | 5388454 Philo Beddoe
Philo Beddoe's picture

Ahhh...the votes will never say yes. The people might...but the votes will not. 

Tue, 10/28/2014 - 22:14 | 5388482 Reggie Dunlop
Reggie Dunlop's picture

Sadly, this wont change anything.

In the mean time, enjoy the discounted price.

 

Tue, 10/28/2014 - 22:18 | 5388493 Tanz der Lemminge
Tanz der Lemminge's picture
“If voting made any difference they wouldn't let us do it.”
Tue, 10/28/2014 - 22:22 | 5388500 BlackMagician
BlackMagician's picture

BRING IT BITCHEZ!!!

Tue, 10/28/2014 - 22:25 | 5388510 Seize Mars
Seize Mars's picture

Voting: if it's important, it's rigged.

You think Rothschild will let Swtzerland "vote" its gold back?

Wed, 10/29/2014 - 00:08 | 5388704 Kirk2NCC1701
Kirk2NCC1701's picture

Newsflash, little sheep:

If those who are <2% of the population rule with such efficacy, it is because they are better organized, cohesive, have but one purpose to pursue relentlessly and use the Jedi Mindtrick.

Until the 98% get their shit together, it cannot be otherwise.

Wed, 10/29/2014 - 04:37 | 5388947 Rememberweimar
Rememberweimar's picture

They're the 1% Chosenite parasites

Wed, 10/29/2014 - 13:20 | 5390411 Direct Democracy
Direct Democracy's picture

Why not do something about it,  O-Be-Won?

Wed, 10/29/2014 - 17:25 | 5391435 Paveway IV
Paveway IV's picture
    These aren't the woodchippers we're looking for. You can go about your business.
Wed, 10/29/2014 - 03:14 | 5388883 stacking12321
stacking12321's picture

when you vote, you give up your autonomy, and your conscience, and give legitimacy to an illegitimate system.

Tue, 10/28/2014 - 22:31 | 5388516 dirtyfiles
dirtyfiles's picture

long tungsten do?

Tue, 10/28/2014 - 23:47 | 5388519 alfred b.
alfred b.'s picture

 

        Say Egon, might be wise to avoid nail guns until this blows over.

 

Tue, 10/28/2014 - 22:40 | 5388545 Rock On Roger
Rock On Roger's picture

Gold for the gods

And silver for humans.

Zion is screwed

China stacks for their own gods.

Wed, 10/29/2014 - 03:12 | 5388879 stacking12321
stacking12321's picture

don't count out zion yet, they still have their EMP defences against the sentinels.

besides, if neo really is the one, he can wipe out all of zion's enemies with a wave of his hand.

Tue, 10/28/2014 - 23:01 | 5388588 Dragon HAwk
Dragon HAwk's picture

Blah blah blah... And who will count the Votes.......

Wed, 10/29/2014 - 00:01 | 5388686 Farqued Up
Farqued Up's picture

Better than electronic counting, easier to witness the count.

Tue, 10/28/2014 - 23:08 | 5388599 joego1
joego1's picture

Unless all of the CNB's walk in lock step the ponzi unravels.

Tue, 10/28/2014 - 23:12 | 5388608 Pseudonymous
Pseudonymous's picture

 

issues which the Swiss people have been entrusted by their leaders to decide

I am sorry, Grant Williams, but I am not sure if you are trolling the Swiss people or being sarcastic or what...

Wed, 10/29/2014 - 00:32 | 5388733 alexcojones
alexcojones's picture

Paper ballots, counted by Hand, by real People, in Switzerland?

Okay, Swiss: Show the World you have MORE Balls than the Scots, Yanks or Brits.

MAKE US PROUD-!

Wed, 10/29/2014 - 00:41 | 5388743 Sizzurp
Sizzurp's picture

This should be interesting if it passes. One problem is that the SNB will have to either purchase quite a bit of gold, and or substantially reduce their money supply.  I'm not saying it's a bad thing in the long term, just that it may cause some serious economic dislocations in the near term, like dramatically reducing wages for Swiss workers.  People tend not to like it when their wages go down, but prices for goods and services should also go down.  If the SNB wants to play hardball, they may use this as an opportunity to crash the economy and get the referendum reversed.  You can bet other central banks will also be eagerly watching and advising on all sorts of dirty tricks to make sure it's a failure.  Good luck to the Swiss, I hope they can make it stick.

Wed, 10/29/2014 - 02:12 | 5388814 Paveway IV
Paveway IV's picture

I expect no less from the bankers, Sizzurp. But explain to me how the central bank is going to lower wages for Swiss workers? The only 'power' the banks have over Swiss citizens is to print money (which is being restricted here) or change interest rates for some kind of mass punishment - which won't go over too well with the Swiss. 

This whole idea of central bankers are some kind of omnipotent magicians is nonsense. Let them off the leash and they'll automatically gravitate to the easiest, most profitable way to make money: take it directly from the people by debasing the currency. Restrict central bankers by law and they'll just seek out some slighly more troublesome, less profitable way to make money OTHER THAN debasing the currency. They're not going to go broke.

The Swiss are not offering the referendum to keep bankers from being bankers, they're just putting a leash on them.

Whatever changes occur to the Swiss economy, one thing is certain: the CHF will regain some of the value it lost against other currencies and that will benefit the average Swiss citizen. Exporters will suffer, but they have been reaping the benefits of an artificially weakened CHF all this time. The bankers big lie is that having 'too strong' of a currency is bad for everyone. In fact, it is only bad for printers like them.

Wed, 10/29/2014 - 03:48 | 5388910 zerohedgejjxxzz12
zerohedgejjxxzz12's picture

This world CB ponzi cheme will continue until one day, maybe in a small country, it will cease to continue.

 Maybe the Swiss are waking up to the Ponzi banksters, maybe they learned something from Iceland.

One day things will change, and it is more than likely that it will happen in a small country, rather than in one of the 5 eyes, of which the people are brain dead, having their freedoms and their wealth stolen from them by the banksters while their Govs watch and hold out their hands for the banksters to pay them handsomely!

Go Suisse Go!

I keep informing people about how the bankster are robbing the people blind, and they reply with  Oh! are they!

Wed, 10/29/2014 - 07:08 | 5389076 Urban Redneck
Urban Redneck's picture

The Swiss Central Bank's policies PRIOR to the CHF-EUR peg lowered wages for Swiss workers. The rising franc was killing both tourism and export units (hence revenue), putting downward pressure on wages, this led to increased overtime for existing workers, a higher reliance on imported low wage Eurotrash, fewer jobs created, and smaller/less bonuses/
COLAs.

Wed, 10/29/2014 - 08:33 | 5389228 Latitude25
Latitude25's picture

So after 100s of years without a peg to other currencies, now all of a sudden there is a problem?  And what might be the cause of that problem?

Wed, 10/29/2014 - 09:25 | 5389387 Urban Redneck
Urban Redneck's picture

"So after 100s of years without a peg to other currencies..."
Surely you jest...
Latin Monetary Union ring a bell???

As to the cause of the problem, it was the fund managers and the preppers (YES - ALL THOSE THOSE LITTLE FUCKS WHO WERE GOING TO "HIDE" IN THE CHF) -- everyone wanted CHF even though they have absolutely no use for it in their day to day lives, (absent printing more CHF) this meant LESS MONEY CIRCULATING IN THE DOMESTIC ECONOMY for a growing population. Guess what, in deflation, not all prices drop, but labor prices (where the only competition is local- until they "offshore") drop damn quickly... So we traded a housing bubble for falling incomes and fewer jobs, in pursuit of economic stability.

It was a less than ideal solution to very serious problem.

The other central banks lunatic policies didn't help, but the CBs weren't the underlying cause of the CHF problem. So like I said below Grant Williams should stick things he might possibly comprehend, because he exposes himself as ignoramus of gargantuan proportions when starts talking about Switzerland.

Wed, 10/29/2014 - 10:44 | 5389630 Latitude25
Latitude25's picture

The latin monetary union was pegged to gold and silver.  Surely you didn't imagine that that was an example of pegging fiat currencies with no backing.

Do I detect anger that people actually wanted to get ahold of some type of money that wasn't debased?  Do you believe that a "store of wealth" is wrong?

Wed, 10/29/2014 - 11:00 | 5389717 Urban Redneck
Urban Redneck's picture

That's not what you wrote, and what you wrote is factually challenged.

"So after 100s of years without a peg to other currencies"

Wed, 10/29/2014 - 11:48 | 5389970 Latitude25
Latitude25's picture

Check your definition of currency.  Mine is "paper money"

Wed, 10/29/2014 - 11:57 | 5390020 Urban Redneck
Urban Redneck's picture

Check your facts -- "100s of years"

Wed, 10/29/2014 - 09:22 | 5389373 Sizzurp
Sizzurp's picture

Paveway, when you shrink the money supply, demand for goods and services will drop until prices are lowered. This will have the effect of reducing wages.  It might not be a big deal, except psycologically, because the cost of living will also be reduced.  People will tend to put off purchases waiting for lower prices though.  That's always the central banker's argument against deflation.  Obviously, price stability is the most desirable situation, but the printers just can't help themselves when they can easily steal 2% of your' purchasing power every year.

Wed, 10/29/2014 - 16:44 | 5391303 Paveway IV
Paveway IV's picture

"...when you shrink the money supply, demand for goods and services will drop until prices are lowered. This will have the effect of reducing wages..."

All economic activity is not equal.

Even if money supply stayed exactly the same for the last half-century, a disproportionate share of that money has been diverted to banks who should not lend (vs. prudent bankers), poorly-run companies and shyster management (vs. well-run companies in it for the long term) and individuals that are incapable of or have no intention of repaying the money (vs. financially responsible people with decent jobs). But we know the fed has only fueled the problem by expanding money supply - so much so that they'll have to start giving it away to the banks, who will be only to eager to lend it to anyone in the new scammer economy. 

Expanding money supply was justified in order to ensure the availability of money to well-run banks and businesses and responsible people. In practice and in conjunction with corruption of the legal system, it has had the exact opposite effect. As soon as expanding the money supply became a profit center for banks, we were doomed. 

Our reward today is ever increasing amounts of corrosive, degenerate and unsustainable economic activity. Worse yet, government has grown addicted to the extra revenue produced by a scammer economy so much so that they are the least likely to correct the problem and they have grown accustomed to spending an unsustainable amount.

Kind of brings up the dilemma of voting vs. revolution again. Is the system and government that created it so far gone that it's better to get out the pitchforks and torches at this point, or can one still honestly believe voting for replacement red/blue leaders is the country's way out of this? Would a green or purple leader even make a difference at this point? The government organization itself has become so infected with psychopathy that tossing in a few new honest leaders may be entirely futile at this point.

Has the U.S. govenment become Too Big To Cure?

I'm sure I'm destined for the yellow line at the FEMA internment transfer station - the one that ends in an industrial microwave.

Wed, 10/29/2014 - 00:54 | 5388759 BringOnTheAsteroid
BringOnTheAsteroid's picture

Don't walk past any nail guns Egon, whatever you do.

Wed, 10/29/2014 - 01:02 | 5388764 Bear
Bear's picture

As we get closer the FED will anonymously contribute to the SNB for advertising purposes

Wed, 10/29/2014 - 01:37 | 5388777 Treason Season
Treason Season's picture

Just a sidenote before returning to the article. The Swiss Army has only been activated twice in its history, both times to squelch labor strikes so don't get too excited about Swiss democracy.

Wed, 10/29/2014 - 03:08 | 5388864 stacking12321
stacking12321's picture

so, you bring up an irrelevant factoid from the 1800s?

and, that has what, excatly, to do with the gold initiative?

are you suggesting that if the gold initiative passes, the army will be activated, will point their guns at the SNB, and force them to ignore the referendum? that's quite an active imagination you have there.

 

Wed, 10/29/2014 - 03:21 | 5388889 Treason Season
Treason Season's picture

Hey don't have a Swiss cow! Banksters are a species all their own and when cornered will do what it takes.

Wed, 10/29/2014 - 03:35 | 5388903 stacking12321
stacking12321's picture

if i don't have a swiss cow, how am i supposed to make swiss cheese?

switzerland is not the ussa.

Wed, 10/29/2014 - 04:39 | 5388950 Rememberweimar
Rememberweimar's picture

True Democracy is when they use their guns to ensure a pay RAISE...

Wed, 10/29/2014 - 07:07 | 5389075 Winston Churchill
Winston Churchill's picture

You have no idea how militarism is ingrained in the Swiss psyche.

I wish I could post my family photo albums online. Those Swiss men make the Prussians look like

pussy's.

Wed, 10/29/2014 - 01:24 | 5388788 gwar5
gwar5's picture

I hope this passes. Will help fracture fiat currencies, hurry their demise. Any latest SUI polling number out?

 

Wed, 10/29/2014 - 03:06 | 5388855 unicorn
Wed, 10/29/2014 - 03:18 | 5388885 Treason Season
Treason Season's picture

FWIW

Adran Ash, long time precious metal analyst, has got an opposing view on this matter, writing central bank buying is negative for gold prices.

https://www.bullionvault.com/gold-news/swiss-gold-referendum-102120141

Wed, 10/29/2014 - 03:21 | 5388890 russwinter
russwinter's picture

Went to make a donation, and Pay Pal function doesn't work. Ouch.

https://www.paypal.com/cgi-bin/webscr?cmd=_flow&SESSION=5N3CpAt_xVrkSVO7...

 

Wed, 10/29/2014 - 06:24 | 5388996 Latitude25
Latitude25's picture

Your local central banker at work.  It's worse than that.  The recipient is unable to receive money from any source.

https://www.paypal.com/cgi-bin/webscr?cmd=_flow&SESSION=vb0ap2rbSlF0qU-X...

Wed, 10/29/2014 - 03:53 | 5388915 zerohedgejjxxzz12
zerohedgejjxxzz12's picture

He's right does not work! cannot donate, Hmm is this TPTB?

Wed, 10/29/2014 - 04:01 | 5388919 CHX
CHX's picture

1700 tons at current prices is a paltry 65 billion Swiss Francs. That's only ~13% of the balance sheet for a relic. What are they afraid of? 

Wed, 10/29/2014 - 04:12 | 5388923 russwinter
russwinter's picture

US Treasury Quid Pro Quo Arrangements with Criminal Cabals:

http://winteractionables.com/?p=15986

Wed, 10/29/2014 - 05:33 | 5388990 fredquimby
fredquimby's picture

I just made a Tshirt from it.

Also just ordered 2 of their big ass posters that say "Protect the National Assets" VOTE YES that I will put in the road by my house.

Bring it on!

Wed, 10/29/2014 - 05:46 | 5388995 Latitude25
Latitude25's picture

Any analysis of the SGI would not be complete without talking about the following 2 points:

1.  Commenters elsewhere have said that a constitutional amendment also requires a majority of cantons to approve of this.  If this is true how is this looking to play out?

2.  The SGI also says that the gold can NEVER be sold, whatever NEVER means.  How will this affect the initiative?

Wed, 10/29/2014 - 06:05 | 5389006 edmondantes
edmondantes's picture

Unsurprisingly Paypal has today banned donations to the campaign... still any doubt about how the world works,,,

Suggest they take bitcoin instead

Wed, 10/29/2014 - 06:47 | 5389052 skbull44
skbull44's picture

Banks: Gold? What Gold?

Repeat ad infinitum and it will become the truth...

 

http://olduvai.ca

Wed, 10/29/2014 - 06:51 | 5389058 Central Wanker
Central Wanker's picture

This article proved to be very powerful stuff in no time. Within 24 hours of its publication, PayPal blocked the account of GoldSwitzerland that was used for collecting donations.

Dear Establishment, you may have just shot yourself in the head.

Wed, 10/29/2014 - 07:09 | 5389078 Direct Democracy
Direct Democracy's picture

Direct Democracy in action. This is what I believe in.  Elected representation is for losers.  Instead of whining about your government, lets doing something about it.

Wed, 10/29/2014 - 08:02 | 5389166 Urban Redneck
Urban Redneck's picture

Grant Williams should really stick to pontificating about about markets and issues he actually understands. The objective factual errors and subjective mischaracterizations do not advance the case for the Gold Initiative.

Then again, I guess this "article" was less about advancing the case, and more about raising money for a media campaign in the first place... soliciting for foreign donations in a domestic campaign is unseemly.

https://goldswitzerland.com/swiss-gold-initiative-2014/#contributions

Wed, 10/29/2014 - 08:37 | 5389235 Latitude25
Latitude25's picture

Without being specific about his errors and mischaracterizations your criticism is nothing but hot air.  And by the way your contributions link does not work as previously pointed out by others.

Wed, 10/29/2014 - 10:51 | 5389674 Urban Redneck
Urban Redneck's picture

Actually the link does work, perhaps you didn't READ it-

"On Wednesday, October 29, we have received notification from PayPal that they can no longer receive donations on behalf of Matterhorn Asset Management AG. The reason is that we are not a formally registered charity in Switzerland and that we must seek a different approach to raising funds for this extremely important Initiative campaign."

As to "hot air" and the fucktardedness of coming from Grant Williams' uninformed, low-IQ ass... good luck defending Grant's cockamamie bullshit. Now put up or shut up.

1 )All this talk of “massive overvaluation of the Swiss franc” is utter bollocks a little disingenuous. (“Surely not!” I hear you cry.) See above, if this dipshit actually thinks this, then he should really find another subject matter for his newsletters than economics

Between 1970 and 2008, the strength of the Swiss franc was legendary. BULLSHIT. If your only perception of CHF is on a computer screen, as opposed to the real world, then "perhaps" (particularly if one turns their computer monitor upside down). However, as those who actually live in Switzerland will testify, the CHF is a weak currency in terms of purchasing power. For the retards like the Grant Williams -- perhaps the term "EXPORT ECONOMY" could have tipped them off, but NO... when monkeys see the word "Switzerland" their Pavlovian reaction is "Banks & Chocolate". Then again, since we're talking about Grant Williams, DOUBLE FUCKTARDEDNESS is involved-- just look at his own chart exclaiming that the CHF has lost 90% of it purchasing power since 1914. On the off chance a ZH reader could actually be as stupid as Grant Williams - look at the period 1970 to 2008 on the chart.

I don’t think this prohibition is going to matter much. As if there was any doubt that Grant Williams knows less about economics than a caveman. And he probably also wonders why support for the initiative is LOW... then again he thinks it is likely to pass, and that the regulators won't act to undercut it.

As for the SNB’s capacity to act in “pursuing monetary policy,” what the Gold Initiative will do is effectively stop them from printing unlimited amounts of Swiss francs in order to keep the once-mighty Swiss franc pegged to a potentially obsolete currency like the euro. Actually NO, it does nothing to stop the printing of currency. It can screw with the price of gold, and ensure Switzerland can purchase far fewer ounces than it would otherwise be able to obtain, but then gold pumping whores want the price of gold to explode and the availability to drop, because this is all about TALKING THEIR BOOK. This has NOTHING to do with what is good for the Swiss, or Switzerland, or the SNB.

Now, I am simplifying here in the interest of expediency, and I am well aware of the restrictions that any kind of gold standard places on a central bank’s operational capability, but it’s important to understand that the Swiss franc functioned perfectly well as a partially gold-backed currency up until 1999, When is Grant Williams not simplifying? Again, NO, either the CHF is already partially backed by gold or it was not partially backed by gold in 1998/1999. Socrates would have a field day ripping Grant Williams a new asshole, and not just because Socrates was Greek.

the longer they wait, the more gold they will have to buy and the less they will get for their money. I guess Grant should go take Econ 101 again... where they Supply and Demand curves... and go through all the permutations of the various manipulations... and then go take an Econ 102 course where they might get into the effect of "other market participants". If he wanted to demonstrate a level of comprehension appropriate for someone who sells newsletters based on a perception of economic expertise, then he might explore how much gold the SNB could obtain ,and at what price- with and without the constraint of a gold referendum.

The “gold initiative”, the brainchild of the right-wing Swiss People’s Party (SVP), which also calls for SNB gold to be repatriated to Switzerland — much of it is currently stored in London, New York, and Canada - THERE IS NO SWISS GOLD IN NEW YORK, IT WAS PULLED OUT OF FRBNY AND DEPOSITED AT THE BANK OF CANADA IN RESPONSE TO THE VOLKER COMMISSION. It takes a special kind of stupid to screw up reality this bad.

What is important to understand here is that if the initiative passes it will be part of the Swiss constitution IMMEDIATELY — not in two years, as many blogs and websites are suggesting. This means that the government and parliament cannot touch it. Only another referendum can change it. This is proper democracy for you. This is apparently Grant Williams modus operandi - dismiss everyone else, blowing smoke up their ass... or perhaps it's another reason for Socrates to rip Grant a new asshole. Being part of the Constitution, is not the same as modifying the regulations which govern the day to day operations of the Swiss National Bank. The government and parliament most certainly will touch it. In the meantime the SNB would be free to loan 100% of its existing gold reserves to the FRBNY in exchange for the sale of a lot less than 1700 tons of gold (given the expectant price move due other the actions of other market participants), which could then be turned around and re-leased to the FRBNY, reducing amount of gold that the SNB has free and clear title to from 1000 to 0 tons, instead of increasing it.

---

What's funny (and sad) is that I actually know Egon, and he would never stoop to this level of sloppy bullshitting to advance the referendum.

Wed, 10/29/2014 - 14:51 | 5390927 Lore
Lore's picture

Wow. Can you rewrite this in a way that doesn't convey the strong impression that you're a jerk?

Wed, 10/29/2014 - 15:20 | 5391028 Urban Redneck
Urban Redneck's picture

I could, but... while I'm open to serious debate- I don't take kindly to ad hominems, and since the Swiss approach of polite and subtle gets nowhere on ZH, and the entire article is a shameless pandering for political contributions to buy influence in a foreign election, with ABSOLUTE DISREGARD FOR (or ignorance of) the interests of those voting in the election...

Perhaps when the ZH crowd starts singing the praises of Citizens United and unlimited corporate campaign contributions in the USSA's elections I might get over the utter hypocrisy on display today.

Wed, 10/29/2014 - 09:57 | 5389476 the tower
the tower's picture

Could it have anything to do with the fact that the BIS (based is Basel) is advising the Swiss CB on the future value of gold?

Do NOT follow this link or you will be banned from the site!