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Swiss Yes Vote Possible - First “Gold Rush” Of 21st Century?

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Swiss Yes Vote Possible - First “Gold Rush” Of 21st Century?

There are just 3 days left until the“Save Our Swiss Gold” referendum this Sunday. On November 30, voters in Switzerland will head to the polls to decide whether the Swiss National Bank (SNB) should back the Swiss franc with gold by increasing its gold holdings to 20% - up from current levels of 7%.

The conservative Swiss People's party proposed the initiative, called "Save Our Swiss Gold", with the intention of boosting the security and financial and monetary independence of Switzerland in these  times of financial uncertainty. They believe that a 20% gold holding will protect the Swiss people from currency debasement, currency devaluation and an international monetary crisis.

In the case of a "yes" vote, gold prices are likely to surge. Analysts do not believe a yes vote is possible. However, analysts have got the mood of the people wrong in many referendums both in Switzerland and throughout Europe in recent years. 

We believe that the vote will be very close - much closer than many analysts suggest. After a massive, very well funded and highly coordinated campaign by the banking and political establishment in Switzerland, the polls show that the no side is in the lead. 

It is worth remembering some of the recent referendums in Switzerland showed the people would vote with the government and establishment political parties in the polls. Subsequently, they did not.  

It is worth remembering some of the recent referendums in Europe showed the people would vote with the government and establishment political parties in the polls. Subsequently, they did not.  

In Ireland, after similar coordinated campaigns by political elites, many official polls showed, the people would vote for the EU's Lisbon and Nice treaties. The people voted for neither.
There is a lot of discontent and anger against financiers and a sense that politicians are mere tools of bankers and financial elites rather than representatives of the people, doing the will of the people.

The Swiss people are better off than most people in the world and Switzerland remains one of the wealthiest nations in the world. 

However, many are struggling in Switzerland today. The working and middle classes are seeing significant inflation in the cost of life's necessities in the form of food and accommodation. To buy or to rent an apartment or house is becoming increasingly unaffordable.

Much of the campaign conducted by the SNB and the political parties in Switzerland was alarmist and one sided. It failed to address the concerns about the possible continuing debasement of the Swiss franc and a resultant fall in Swiss people’s purchasing power and standard of living.

Today we have published a very good, balanced look at the key issues which were largely ignored and not addressed by the no campaign.

The author Eric Schreiber is the former head of commodities UBP and former head of precious metals at Credit Suisse in Zurich. He believes that this crucial angle has been largely missing from the Swiss gold referendum debate as have important matters regarding the role of central banks, the importance of transparency, accountability and indeed democracy.

Read Eric’s interesting and balanced article here

Central bankers reached a new low at the weekend when Swiss National Bank President Thomas Jordan warned in a very alarmist manner of "disastrous consequences" from a pulpit in a church on a historic hill in the town of Uster, Switzerland.

“The initiative is dangerous because it would weaken the SNB,” he said yesterday regarding proposals to increase the Swiss gold reserves, at a memorial service in a church which Bloomberg dubbed the 'sermon on the hill.'

The separation of church and state was one of the great achievement of recent years. It looks like we need to see a proper separation of central banking from the state. States and sovereign nations should be in control of central banks, rather than the other way around.

Central bankers, with their dogmatic uber-Keynesian money printing creed, would like to see themselves and their policies as infallible. Despite, such policies having an abysmal track record throughout history and indeed in recent years.

Central bankers seem to have forgotten that their primary role is to protect the purchasing power of their respective currencies and to act as the lender of last resort. 

Their role is not to bail out irresponsible, insolvent banks and not to boost asset prices on behalf of corporations and the wealthy - thereby, debasing sovereign currencies.

My sense is that the Swiss people may give the politicians another bloody nose this Sunday. This would shock markets as market participants are not expecting this. It would force the Swiss central bank to triple reserves to over 1,500 metric tonnes, leading to the price of gold soaring.

It would lead to an even greater increase in central bank demand for gold. It would put the FED, ECB, BOJ, and BOE on notice that their continuing currency debasement is not sustainable.  It would also likely break the EURCHF peg increasing purchasing power for ordinary people in Switzerland. 

A yes vote would likely result in a significant shift in both awareness and consciousness about our modern fiat monetary system and about what constitutes  money today. The frequently cited, but never seen except in India and China, ‘gold rush’ of recent years may materialise in the western world as gold goes from the fringes or a small minority of risk averse investors and savers to the mainstream.

It would result in a new found awareness that gold is not the speculative, volatile commodity but is a rare, finite form of money and a store of value in uncertain times. 

Get Breaking News and Updates On Gold Markets Here


MARKET UPDATE
Today’s AM fix was USD 1,196.50, EUR 959.20 and GBP 758.96 per ounce.
Yesterday’s AM fix was USD 1,195.75, EUR 960.67 and GBP 760.22 per ounce.

Spot gold closed slightly lower yesterday at $1,197.78/oz, and spot silver fell to $16.51/oz.

Gold in USD - 10 Years (Thomson Reuters)

Gold prices are in lockdown just below $1,200/oz as the market awaits Sunday’s Swiss referendum on central bank gold reserves (see above). 

Gold edged down on Thursday, pushed by dollar gains and the lull of the Thanksgiving holiday in the U.S. 

Traders remain cautious ahead of the Swiss gold referendum this weekend. Gold coin and bar buyers in western markets have been buying this week in anticipation of a possible yes vote.

Silver was down 0.6%  at $16.37 an ounce, platinum was down 0.3% at $1,219.30 an ounce and palladium was down 0.6% at $795.47 an ounce.

A surprise dip in Spanish consumer prices has increased the probability that the ECB will embark on a more aggressive easing of monetary policy. However, in Germany the jobless rate remained low at 6.6%, matching the revised number for the previous month.  

Euro zone countries' economic fortunes could permanently diverge if they fail to undertake structural reforms, posing a risk to the cohesion of the currency bloc, the president of the ECB said today. "Lack of structural reforms raises the spectre of permanent economic divergence between members," Mario Draghi said.

Traders are now awaiting Sunday's Swiss vote on how it manages central bank gold reserves for guidance. If a 'yes' vote is passed, the Swiss central bank would have to buy about 1,500 tonnes of gold over the next five years.

www.GoldCore.com

 

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Thu, 11/27/2014 - 23:33 | 5495613 Chat_noir
Chat_noir's picture

its not the Gold Rush, its the Gold Crush or Crash

Thu, 11/27/2014 - 23:33 | 5495610 Chat_noir
Chat_noir's picture

*IF* the YES vote wins, SELL GOLD into the SPIKE. Last chance to sell. Put your sell orders in advance, it will not last very long

Thu, 11/27/2014 - 17:14 | 5494956 JamesH
JamesH's picture

Pigs will fly before they will count enough votes for the Yes supporters to win

Thu, 11/27/2014 - 17:49 | 5495006 Burt Gummer
Burt Gummer's picture

Didn't you guys here? Gold is in a bubble and is completely worthless according to some unbiased banker at citigroup without any agenda whatsoever.

https://www.youtube.com/watch?v=IGYaFMFU63U

Thu, 11/27/2014 - 17:20 | 5494939 Urban Redneck
Urban Redneck's picture

"Balanced"... as if anyone needed to read any further than "The first two concerns can quickly be addressed and discounted."

Separation of Church and State in Switzerland? I guess that could be explained the CTRL-C CTRL-P doubling of "It is worth remembering some of the recent referendums in Europe showed the people would vote with the government and establishment political parties in the polls. Subsequently, they did not." as both the 5th and 6th paragraph.  I won't bother to CTRL-C/CTRL-P my original refutation, I'll just link to it.

Oh yeah, GoldCore.com... the yellow OilPrice.com

Or as Tyler Durden would say:

You should assume that at all times we are so totally just talking our book it would shock and awe you like the unexpected, early-morning arrival of a cluster of BGM-109C Tomahawks (were you a believer in the importance of "optics" that is).  If we make a off-hand remark about New Zealand sheep herders it's because we are long New Zealand West Island Cold Kut (NZ-WICK) Wool futures and Kiwi brand Condoms ("For it's pleasure").  If we are joking around about Cliff Asness, it's because we have developed a synthetic short of ARQ.  If we jest about Joe Sixpack, it's because we are trying to hype our cheap-American-beer holdings so we can exit quickly.  Basically, we are telling you about a position we believe in strongly enough to invest in. 

Both sides of the political debate are tallking (and lying) out their asses.  Switzerland is better than most places, but this is politics.  "If you like your purchasing power, you can keep your purchasing power" just go to the polls and check "yes" (or "no") on your ballot and it won't cost you anything, there are significant costs for either choice...

The debate really is that dumbed down and disingenuous.  Then again, the referendum and its outcome has more to with the riots in Ferguson than it does with gold, much less physical gold.

What I will CTRL-C/CTRL-P from my earlier post is this: 

So if you want to read where a central banker and G10 BIS board member preaches that the serfs are free use BitchCoin and BitchCoin in free to compete with CHF, or this following shocking bit on the proposal for referendum on fractional reserve then do read the speech.  "Although the idea of plain money may be interesting in certain respects.... Assumptions which appear plausible could therefore prove to be incorrect."

I hope the EcoPop Referendum passes this weekend, it might keep some of the idiots trying to bring the whole system down on everyone's head from ever being allowed to bring their act here and vote in a Swiss referendum (we have enough Swiss idiots who already have and exercise that prerogative).

I also hope the pro-class-warfare "close the billionaire's rentier tax loophole" referendum passes, but for more nuanced reasons.  Strange that there has been no discussion of that vote...

Thu, 11/27/2014 - 17:00 | 5494936 Confundido
Confundido's picture

The referendum is already catalogued as anti-democratic, fueled by speculative right-extremists who don't care if the people of Switzerland is forced into unemployment due to a restrictive monetary policy, a barbaric relic. If this BS fails, it will be deemed illegal. If this also fails, the government will say it is not feasible to execute. 

Thu, 11/27/2014 - 16:44 | 5494915 FieldingMellish
FieldingMellish's picture

A No vote is also possible. The only thing that is certain is that the result will be No. 

 

"You know, comrades that I think in regard to this: I consider it completely unimportant who in the party will vote, or how; but what is extraordinarily important is this — who will count the votes, and how." - Josef Stalin


Fri, 11/28/2014 - 05:08 | 5495921 Oracle 911
Oracle 911's picture

Stalin was right. The question is: How he meant it?

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