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Deutsche Bank Says "Yes" Vote Has "Narrow But Clear Lead" In Swiss Gold Referendum As 1M GOFO Hits Most Negative Since 2001
As we explained over the weekend, should the Swiss gold referendum pass successfully, the price of gold will surge. It was none other than JPM who warned that the "markets under appreciate this event", explaing that "If the referendum is passed, the Swiss National Bank (SNB) will be forced to increase reserves by around 1,500 tonnes over five years, i.e. 300 tonnes per year. This 300 tonnes per year accounts for 7.5% of annual gold demand of 4,000 tonnes per year."
Well, even as the SNB has been scrambling to make the referendum seem like a non-event, with very little chance of passing, moments ago Deutsche Bank released a piece that roundly refuted everything the Swiss Central Bank has been peddling. To wit, here is a note just out from DB's Robin Winkler:
- On 30 November, the Swiss will vote in a referendum to decide whether the SNB’s constitutional mandate should be changed to require the central bank to 1) never sell any gold reserves once acquired, 2) store all its gold on Swiss territory, 3) hold at least 20% of its official reserve assets in gold.
- The likelihood of a yes vote is considerable. The proposal requires a simple country-wide majority to pass, as well as a majority in at least 50% of Swiss cantons. Current polling shows the ‘yes’ campaign with a narrow but clear lead and there are reasons to believe that factors on the day could be favourable for the amendment. If an affirmative vote was recorded, there is little political leeway to delay or dilute implementation.
- We find that some of the concerns over the technical implementation of the 20% rule may be overblown. The SNB should be able to meet its gold demands with relative ease. Nor do we subscribe to the view that this would have a long term impact on gold price trends. In the event of further intervention, SNB rebalancing into gold could have a more marked impact on short term price trends, however. The SNB should easily be able to repatriate its gold holdings from abroad.
- The possibility that the SNB could circumvent the requirement through the creation of a sovereign wealth fund is remote. While technically attractive, this option is not politically feasible. However, the SNB could use gold swaps to mitigate some of the adverse implications of the gold vote, in particular with respect to asset return risk and market footprint.
- The amendment would carry significant balance sheet risks for the SNB. As well as concentrating market risk, the SNB would be effectively short an option on gold but without having received a premium. Balance sheet risks could be mitigated by the SNB returning to marking gold at purchase rather than market prices.
Some more:
The proposal requires a simple 50% majority to pass (Volksmehr), with the further proviso that there be a majority in at least 50% of Switzerland’s 26 cantons (Ständemehr). There is no minimum turnout. The Ständemehr is the lower hurdle, since the vote is biased towards smaller, conservative cantons more likely to vote yes. In the absence of official polls, the proposal’s likelihood of success can only be gauged from polls conducted by newspapers and other media outlets. The most respected polls are published by the radio and TV platform SRG. According to their latest poll (another poll is due next week), 44% of respondents intended to vote in favour of the amendment, with 39% rejecting it.
Swiss pre-referendum polls commonly see the share of ‘no’ votes rise during the lead up to the actual vote, as the political and business establishment ramp up campaigns against radical proposals. However, it is important to note that the Swiss vote on three separate referenda on 30 November. Most of the political debate has concerned the ‘EcoPop’ initiative which seeks to curtail immigration to Switzerland based on a quota system. Some observers fear that the political focus on the immigration debate might lead voters to pay less attention to the gold proposal. There is also a concern that moderately conservative voters uncomfortable with the anti-immigration initiative might vote in favour of the gold proposal in compensation.
* * *
The SNB should face little technical difficulty in repatriating its gold within two years. Switzerland stores about 300 tonnes of gold abroad, almost exclusively in the UK and Canada. History suggests that this gold could be shipped to Switzerland within a short period of time (for more detail, see appendix). It would be easier to repo Swiss gold held abroad and insist on physical delivery upon expiry, or to sell the gold abroad to fund contracts deliverable over the next five years. Counterparties could source the gold to be delivered most cheaply in Switzerland itself, given the country’s large private holdings
Well, after Germany's miserable failure to reclaim its gold when the Bundesbank received a tap on its shoulder "strongly hinting" the NY Fed and BNP may have serious procurement problems of gold that is 'already there', it appears at least one European nation is about to have access to its gold, and judging by the increasing warnings about the global fiat bubble popping by none other than the BIS (yet again, more shortly), probably not a moment too soon.
As for the SNB being easily "able to repatriate its gold holdings from abroad" we appreciate the optimism, just don't point out to the DB analyst that 6 Month GOFO just want negative once again even as 1M GOFO rate hit the most negative it has been since... 2001!
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Up Up and AWAY!!!!!!!!!!!!!!!!!! The Ben Yellen Balloon Inflation Ride Has Arrived!
http://www.infowars.com/video-apache-helicopter-harasses-gun-owners/
aren't the swiss required by law to own and opperate a fire arm?
All are armed and trained and active memers of the militia/army between the ages of 18 and 45.
MANY Veterans In The Field Say Paper GOLD VS PHYS GOLD Is Levered 100/1.
I Speculate That The Ratio Is Much Much Higher, Maybe 200, 400 Or Even 1000 To 1 Bitchex
Bonne Voyage...
Cit:
The SNB should easily be able to repatriate its gold holdings from abroad.
LOLLLLLLLL
Yeah, just like Germany. Don't worry, the voting machines will be fixed and it won't pass.
The Swiss has an advantage over Germany as they can return to their old banking laws and tell the IRS et al to fuck off.....
As I had thought (and ZH member lunar confirmed in a recent thread), there might be one or more sneaky tricks that the Swiss PTB could use to derail the Initiative. And who knows this how would affect the physical gold market (other than physical would start getting harder to get in large amounts).
At a minimum, the Initiative passing would be an enormous psychological victory for all of us holding physical gold.
It might not be easy for the MSM to cover this up...
And at some point, physical gold will be hard to get and/or very expensive.
"If you don't hold it ...."
Ask the MF Global shareholders.
It would take the Swiss buying the entire gold production of Russia for five years to rebuild that amount.
Since Russia has been forced to buy nearly the entire production of their country the last three quarters AND the price of gold has continued to drop, you can see what little effect an additional 75 tons a quarter has on prices. There are far more powerful forces at work here unloading gold into the market. No idea who or why or for how long, but it's clear by the change in longer-term price trend since mid-2013.
Even though Swiss demand won't amount to much, the real danger to central banks is that other countries might get pissed off enough to join the "Bitch-slap the Bankers" gold revolution. They can quash sentiment in Switzerland and rig the vote, but - just like the Scottish independence vote - the proles get all riled up and someone else is bound to try it.
Time to release - er, haave a myterious outbreak - of Super-Ebola (with enhanced flavor crystals).
Physical is getting tougher to find. My metals dealer is doing his best but everybody has started buying on the word of Greenspan.
FFS, Greenspan is always on the other side of the trade.
It's like E*Trade calling you up with some hot stock tips. Why anyone would listen to Greenspan is beyond me. Must be the Khardashian crowd.
No voting machines : only bulletins, which can be either sent through mail, put into the office's mailbox, or dropped into the box the day of the vote. And the counting is made locally by citizens, so there is no room for "centralized cheating".
Still, in spite of the overly optimistic article above, I'm almost sure the referendum will be rejected. 6 out of 7 political parties ran a massive counter-offensive against the text, and even the SNB went public in its rejection. So people don't seem to understand the exact reason they should go against their expert opinion - "since they are here to defend Switzerland anyway, n'est-ce pas ?"
Our two bulletins are already filled, and in their enveloppe. Tomorrow, we'll put them into the office's mailbox. Guess what we voted ...
well, with a name like Goldy Locks...
Thanks for the info on voting procedure. Hope it passes!
1) Oops.
2) The voting system is organised at "canton" level. So I remembered -too late- that Geneva e.g. had implemented an e-voting concept : http://www.ge.ch/evoting/english/welcome.asp (in English).
3) My bad.
Almost all are trained, and have the option of buying their service rifle (coverted to semi-auto from full-auto after service.) Even with that, 5% of the swiss population owns a true full-auto assault rifle.
But no, they're not required to own. About 30% of households do, a bit lower than the US' 43% that do.
I love how toward any final stretch of an important vote against banksters, we see articles like this that say its too close to call. November 29th will be a great day to short gold and gold stocks. Banksters don't lose....EVER
@Groundhog : Yeah, it's guaranteed that either the vote doesn't pass or the banksters have a trick up their sleeve buried in the wording of the bill. Someone probably slipped in a sentence at 2am on a holiday that allows them to use paper gold for the next 20 years to meet this reserve. Just wait and watch!!
If only America required the same...
There are two sides to this swiss vote, both good for gold, and one bad for the Swiss.
Yes...good for gold demand, but when you have China, who cares if the Swiss, Indians or Russians join the trade, China's gonna buy everything they can anyway.
No....The Swiss Franc becomes fiat toilet paper, and anyone looking to buy or hold it will sell and buy things like gold, probably creating more gold demand, because a yes vote may just mean more investors pile into the Swiss Franc and not gold.
How can it NOT be obvious to you that all you're doing is to help bury this story by spamming every fucking thread with it?
Don't you get it? The more noise you make, the less clear the signal becomes, as everyone learns to ignore you.
Instead of spamming one website 1000 times, why the fuck don't you go spam 1000 different websites with it?
Sure it might take a little work, but hey, you'll come a whole lot closer to accomplishing your goal than you're current practice of being an obnoxious ass here.
OK?
Have you ever seen that video of the helicopter that hovered near a family in the desert?
:)
"The SNB should easily be able to repatriate its gold holdings from abroad."
Think so?
The only way to keep the lie going is to endlessly repeat the lie.
<Once again, and this time with feeling.>
This is the rub. Unlike Germany I don't think Fed handwaving that it's in the vault is going to work here. There's got to be a full-on panic at LBMA right now.
Something tells me when the supposed Swiss gold is repatriated it's going to be missing the swiss refinery stamps...
It doesn't matter, it would likely be recast anyway upon repatriation, and it's not like we don't have 75% market share in gold refining. So they can send dust or dore, the guys in Ticino can make it look nice and purdy.
If this Deutsche Bank note was written by the same Robin Winkler as this guy http://uk.linkedin.com/pub/robin-winkler/69/535/428
Then this Winkler has zero experience in the gold market, let alone any other markets. He only just joined Deutsche after doing a PhD in Oxford and before that an MPhil in Cambridge and he was an 'intern' at JP Morgan as recently as 2010.
If an experienced Deutsche gold trader or senior precious metals honcho wrote that the SNB can easily repatriate their foreign stored gold, then I might believe they have some good insight. Not when some newbie with zero experience except being an intern at JP Morgan.
Deutsche: "History suggests that this gold could be shipped to Switzerland within a short period of time (for more detail, see appendix). It would be easier to repo Swiss gold held abroad and insist on physical delivery upon expiry, or to sell the gold abroad to fund contracts deliverable over the next five years. Counterparties could source the gold to be delivered most cheaply in Switzerland itself, given the country’s large private holdings"
Counterparties? WTF? Address the facts. The SNB say they have earmarked gold held in Ottawa and London. Not that they do but they say they do. So don't start jumping into unallocated territory without stating these assumptions.
Why Deutsche is suggesting these complicated gold sourcing strategies when the SNB says that they have weight lists of all their earmarked gold held abroad. With earmarked gold none of these strategies that Deutsche advocates is needed.
Obviously the gold is not there as we all know, but Deutsche, please address the facts as the SNB has stated them . They say they have the gold. Do you not believe them also? Otherwise why suggest all these fancy bilateral repo and funding counterparty strategies?
If this is the same Robin Winkler, who was at Oxford between 2011-2014
(Balliol College robin.winkler@balliol.ox.ac.uk) then he did his thesis on German economic history between 1929 and 1933 - a micro-sociological analysis of academic institutions"
How this translates to knowledge of historical shipments of SNB gold is beyond me.
Why does this matter yet the Chinese, Indian, and Russian buying doesn't?
They aren't Westerners. Everyone else can FOAD!
Perception and belief, not facts or truth, is always the straw that breaks the camel's back.
Gold price up because of risk of demand pop, or is Gold price up because ECB trying to make Gold Referendum look prohibitively expensive in run-up to vote day.
taketheredpill:
That's what I was thinking. Let (force) the price of gold so high that it becomes too expensive to repatriate the gold. Then, when the price gets to, say, $1600, the weak hands will sell, and.......surprise! We're back to $1175.
I am sure that this referendum will be electronic, just in case some people decide to vote YES.
Nope, they use paper ballots....
And the population is only 8 million total. It's going to be much harder to rig this without detection than it would be in the US.
Let's say the Swiss approve the referendum...that should be interesting in its effect on physical gold demand...but what if it encourages other nations to do likewise. There is a petition on CARE2PETITION to have Canada's gold reserves brought back.....is the the beginning of a peoples' movement?
If they vote yes watch the gold contracts get called for physical. It could be quite entertaining.
I think banksters make some fraud again, but it will cost the public opinion even more
That actually is the threat to the system of the referendum passing... starting a trend among other countries.
Switzerland can get its 300 tons of gold back.
The SNB can manipulate the central bank balance sheet, buy paper gold, or a handful of other things to neuter the intent of the referendum (which they are legally obligated to do anyway under current Swiss law).
But if the aggregate central bank (net) purchases of gold are materially changed, that could materially affect the physical gold market over the intermediate and long term.
Time to topple Maduro and sack those repatriated gold reserves.
Capiche?
Because we all know that more phys demand will bring up the price . . .
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ....................
The Tylers should have more common sense than to parrot JPM's useless talkings about the SNB buying 1,5000 tons of gold.
JPM must see an opportunity to profit from positive PM price movement (for now), and needs some sheeple to sell to.
Where are the usual hordes protesting the blatant price manipulation? I guess Armstrong was right.
See why Swiss will vote for gold
http://andreswhy.blogspot.com/2012/06/swiss-and-afghan.html
does it really matter when you know that Gold and Silver r the only 2 forms of real money???
not much...the reckoning approaches.
The propaganda war begins: http://www.nzz.ch/schweiz/abstimmungen/isolationionistisch-globales-zwec...
My schoolboy German is a little rusty...
It's a cheap hit piece, but it was inevitable when outsiders started trying to buy influence in a domestic Swiss election. The road to hell is paved with good intentions.
I suspect that the SNB might have had a reality check late this Friday afternoon. Something's going on.
If banks make a big deal out of this, I say they punish gold into the New Year, just like they slammed gold after Japans QE extravaganza, probably the most bullish event this year for gold, the third largest economy in the world saying they are going to print their currency into oblivion..
Maybe Loyd wants his $1050 target at his GS New Years party.
In the case of a positive outcome, who will get the mandate to execute the (phys.) gold purchases? Anyone guessing 200 West?
If the intention of the Swiss leaders are for this referendum to win, it's a nice way of saving face when confronted by the Western fiat masters.. sorry guys we tried but the people have spoken.. we had no choice.. no really.
<<If the intention of the Swiss leaders are for this referendum to win>>
It's not. It's not.
All biggies at the political level (political parties *and* authorities) refused the text, recommended to refuse the text, are dreaming that the text is refused, shit in their pants at the idea the text is accepted, and ...well you get the idea.
I'm dirtying my pants at another idea, though : c.o.n.f.i.s.c.a.t.i.o.n.
At worldwide level, one day or another. But that's another story.
Why is gold the only market moving? Everything else is flat...
Nothing makes me more happy than watching you guys cry when the price of gold falls.
Can't wait 'til it hits zero and you guys realize all you have are a bunch of shiny rocks.
No let's see how many down votes I can get.
Gold is valuable in the ultimate end because women are vain. Women love gold jewellery and have done since the dawn of time. That is the ultimate source of gold's value; gold gets you pussy, lots of it.
It's funny how the State of California (the 8th largest economy in the world BTW) was built with everyone and anyone coming west in 1849 to look for worthless shiny rocks! Or that upon Jesus' birth, one of the gifts the wise men bestowed was Gold!
It will never go to zero, unlike the other 599 fiat currencies previously tried throughout history. But I'm sure this time it's different...
Oh my god. Here we go again with "this time is different".
It is different, year by year, people are moving away from money practices of yesteryear.
At first, people bartered, then used huge stones for money, then gold, then they used other coins, then paper money...and now people even rely less on banks, less on paper money. It's all electronic. I know,I know...it's all a big scam.
But, yes, by all means keep trading your hard earned legal tender for rocks on the off chance that Putin invades or the asteroid hits.
Silver Bullet must have shot himself in the head when it comes to understanding what "money" is.
What a fuckan tool.
I sure hope that an asteroid doesn't hit. Do you know how much gold is in those things?
Your history is wrong the Babylonians used a credit/debt tabulation money system more than one thousand years before the first coins appeared - you should keep quiet before you make an even bigger fool of yourself.
yet another retard that does not understand the difference between price (as measured by currency), v. value (as measured by exchange). Down votes arrive from being incorrect. No votes implies nobody gives a shit what you say. Guess which one I gave you.
Good one.
Keep "stacking" your "physical" that you exchanged for your "FIAT" (you guys usually use all caps for FIAT....not sure why).
Go ahead, nobody wants it outside of your "prepper" community.
your pissed aren't you because you are on the short side of gld/slv getting your ass handed to you - which clearly contradicts your assertion that "Nobody wants it". If this were true, why does it cost me $1400 CDN to get it in my hand? Read a book man. We're done here.
LOL..the moment the paper "price" hits zero is exactly when we'll see who's swimming naked. BRING IT ON, DUMBASS!
I think that Germany's experience with getting its gold back proves that the stuff simply doesn't exist in the quantities claimed by the central banks. I personally believe that this vote has no chance of passing as it will be rigged; granted I have no idea how the Swiss ballot counting system functions. I hope that I'm wrong. Also, should the referendum win, it will be interesting to see who, exactly, is designated to oversee the repatriation process since nobody but the banks themselves are even allowed to view public holdings of gold (oh yeah, my bad, Queen Elizabeth also). Bottom line, they'll do everything possible to squirm out of actually answering to the publics insolent demands. It will be interesting to see if the German movement resurfaces if the Swiss referendum goes through. If I were a German, I would be a little bit annoyed if the Swiss magically got their gold back while the Germans were effectively given the middle finger.
If war becomes general, then physical gold is the only way to settle international trades. That is the only reason central banks hold gold at all, period.
To put that another way,, they can impose paper money on their own citizens by law, but not anyone else.
Actually Swiss Francs were the only globally accepted fiat settlement currency during the last go round on the World War Rinse, Repeat machine. Too bad the Swiss sold out their banking industry in pursuit of short term political expediency.
Well, I think we can all agree that its nice to see the gold market restored to legitimacy, with supply and demand fundamentals for the physical product dictating price rather than paper games played by the BIS and the CBs and pffft... I'm sorry, I just can't say that with a straight face.
"You may not have realized this, but we actually have buttocks where our heads should be."
Germany's gold repatriation is not even news these days.
India is going to pull in a good 200 extra tons more than expected by year end and Russia is buying all they can from there own mines!
These are far more imprtant gold numbers than this referendum, and sad to say this, Swiss Gold repatriation will just be met with silence, like Germany's gold.
When you have big banks like DB and JPM saying this is big deal for gold, all I'm saying is watch out! They are crooks and lyers.
this is FAKE, they will simply RIG the vote ! the same old, same old
Just to clarify (living in Switzerland): Our voting system is virtually foolproof, because ballots with full explanations are sent ONLY to registered Swiss citizen voters by their local community. You have to return those ballot papers, mostly done by mail, but also possible to drop at the polling place, you do not vote like in the USA on the day by marking a ballot.
For such an "Initiative" (Swiss term) to succeed, 100'000+ absolutely verified and confirmed voters signatures signed an initiative (petition) to put it to a national vote. It only passes by a simply majority of voters, but at the same time must be passed by more than half the cantons (comparable to states in the USA). The is no real way to crook or ignore the results, the parliament just will have to work out the law that complies with the vote taken, if not there is a "Durchsetzungs-Initiative" meaning the people can absolutely force compliance. Here in Switzerland the "Souverain" (meaning the Swiss voters), is essentially the final judge what gets put into the constitution or into law.
Please remember that out of 8 Million people only about half are eligible, and of those maybe 50% +- are voting. It simply is too close to call at this time. Virtually all of the establishment is against this, even the SVP (conservative) on a national level, but their will is widely ignored by the cantonal chapters. The fear being propagated is, that the SNB will be hamstrung to defend the SFR 1.20 / EUR 1.00 minimum exchange level, which would lead to Swiss producers no longer being competitive. The period of implementation will be 5 years, so there is plenty of time given.
It is true, that the "ECOPOP" Initiative, severely limiting foreigners flooding Switzerland, has the limelight, but because of the concentrated attach from the establishment the "Gold Initiative" has become more debated. Either way it goes, we DO live in a pure democracy, for which I will always be thankful.
No, it's perfectly safe. They're using Diebold machines.
I am 100% CONVINCED that Swiss referendum will be every bit as significant for the gold market as was the German repatriation decision, Cypriot bail ins, and QE3.
I'd also add that it's about time gold finally decoupled from the Yen. I wonder what got into the BIS and the bullion banks that made them decide to stop exploiting the market?
The threat to the banksters gold price fixing posed by this referendum is very serious, especially with other countries lining up to challenge them, like the Italian announcement to immediately collect signatures to bring EU membership to a vote, and the likelihood of the UK leaving the EU with the threat of another Scottish referendum if Uk leaves EU.
These brushfires have been lit by the debt slaves of the shadow financial dictatorship, and they are growing daily.
GOFO is rigged..
ironically Deutsche hastily exited from being a GOFO contributor in around February of this year.
Mabe that in fact is why Deutsche existed GOFO, because it's rigged
"The SNB should easily be able to repatriate its gold holdings from abroad."
LOL...
Well, what would prevent them to sell the gold they cannot get the delivery of ...and buy physical with the proceed ?
And why didn't Germany do so BTW ?
We need "Mr. Goldfinger" to swoop in now.
The objections by the Swiss National Bank lose a bit of credibility when one of the other headlines today is that the SNB was out buying global small cap stocks. How could any Swiss citizen vote 'No' to this.
Fuck all this. Mexico is about due to have a populist uprising. There are vigilantes curtailing cartel activities already. There are protests against the government corruption. About time. With weed legalization the billions going to the cartels will stop making them look for other means of making money. Which may or may not involve less graft to the government. There is always a chance some populist leader emerges and things get hot down there.
The surge in precious metals prices today, which supposedly was predicated on positive polling in the Swiss Gold Repatriation Movement, proves that the major participants, despite their non-stop drivel, know that this market is completely manipulated. Otherwise there would be no reason for them to worry about physical gold movements any more than those of the derivatives... and we all know that movements of a few hundred tons in papergold are irrelevant to the market.
Failure to pass the Swiss gold initiative would be an 'OBAMAnization' of the Swiss currency.