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Swiss Gold Referendum Fails: 78% Vote Against "Protecting The Country's Wealth"
Whether as a result of an unprecedented scare campaign by the Swiss National Bank (most recently reinforced by Citigroup), or due to confidence that Swiss gold is as safe abroad as it is at home, or simply due to good old-fashioned "hanging chads", today's most awaited event has come and gone and the result - according to early projections by Swiss television SRF - is that the Swiss population overwhelmingly rejected a referendum to force the Swiss National Bank to hold some 20% of its reserves in gold in a landslide vote, with about 78% voting against what AP politely termed "protecting the country's wealth by investing in gold."
As Bloomberg reports, the proposal stipulating the Swiss National Bank hold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold was voted down by 78 percent to 22 percent, according to projections by Swiss television SRF as of 1:00 p.m. local time. The initiative “Save Our Swiss Gold” also would have prohibited the SNB from ever selling any of its bullion and required the 30 percent currently stored in Canada and the U.K. to be repatriated.
A ballot box is emptied at a voting center in Zurich today.
A map showing the breakdown of the Swiss vote by canton: none of the 23 Swiss regions had a majority vote for the gold initiative.
That said the decision will likley not come as a surprise because while early polls gave the yes camp a surprising lead, subsequently polling showed a marked shift in public opinion, and forecast the initiative’s rejection.
The biggest winner, of course, is the Swiss central bank: SNB policy makers warned repeatedly that the measure would have made it harder to keep prices stable and shield the central bank’s cap on the franc of 1.20 per euro. That minimum exchange rate was set three years ago, with the SNB pledging to buy foreign currency in unlimited amounts to defend it.
“The SNB can feel confirmed in its policy,” said Martin Gueth, economist at LBBW in Stuttgart. “By rejecting the gold measure, voters have come out in favor of its current stance.”
Referendums are a key feature of Switzerland’s system of direct democracy, and are held nationally and at a municipal level several times a year. The gold initiative was launched by a handful of members of the European Union-skeptic Swiss People’s Party. Uneasy about the more than 100 billion euros the SNB holds, they contend their initiative will strengthen -- not weaken -- the central bank’s credibility.
However, SNB President Jordan labeled the initiative “dangerous” and his fellow board member Fritz Zurbruegg said accepting the measure meant the room for maneuver “on currency reserves would be dramatically restricted, with negative consequences for the Swiss economy.”
The central bank, based in Bern and Zurich, would have faced a three-year deadline for repatriating its bullion from abroad and five to meet the 20 percent benchmark. With the European Central Bank poised to enact more stimulus to boost feeble growth and inflation, economists surveyed by Bloomberg News in a poll published on Nov. 19 had expected the SNB to maintain its ceiling on the franc into 2017.
The question now is what will happen to the Swiss France, which recently rose to a 26-month high against the euro. For many the concern that a successful gold referendum served as a catalyst to avoid going all in the CHF, as gold purchases would have weakened the currency. “If the euro crisis doesn’t get worse, then the minimum exchange rate will be defendable, said David Marmet, an economist at Zuercher Kantonalbank. Had the initiative been accepted, ‘‘instruments such as negative rates that don’t widen the balance sheet” would have been an option, he said.
With the referendum out of the way, the CHF may paradoxically find itself with a situation in which the inflows in the CHF force it to double down on defending the cap: economists have questioned whether the SNB will now find itself having to reinforce its cap with a negative interest rate on the cash-like deposits commercial banks keep with the central bank, making good on its threat to take further steps “immediately” if necessary.
And then there is the question of what happens to the tension in the gold swap market: as noted last week, the 1 Month GOFO rate had tumbled to the most negative in over a decade. It was not clear if this collateral gold squeeze was the result of Swiss referendum overhang or due to other reasons. The market's reaction on Monday should answer those questions.
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SILVER 1440 LOL
Yawn, Ju.
SIH15 hit 14.155
Last week I said AG's recent collapse pointed to a sub-$15 climactic bottom, maybe $13-14, and wherever you go, there you are, now tonight in the $14 handle area. The subsequent oil collapse however tells me markets are headed for a major washout with $12 AG a possible 'next' bottom':
http://www.investing.com/commodities/silver-advanced-chart
Oh Snap! ZH backs the wrong side AGAIN!
How on earth does this keep happening?
There goes the impression I had of the Swiss being a sober and industrious nation that was active in their politics and understood the value of gold in a crisis situation.
They're just a better heeled Walmart shopper.
Fools! Anyone who does not hold their GOLD, does not own any GOLD! PERIOD!
Have you guys considered that there is no conspiracy, and that gold just isn't valued very highly as money these days? Seriously - ZH has been predicting the end of the world for a very long time now. If you believed that, you proabably missed out on one of the best bull markets of the century. As we speak gold and silver are getting crushed and all you guys ever say is "Wow now I can get more", "Back up the truck", "These sheeple are going to get slaughtered", "Great opportunity to buy more!". If all of you are telling the truth, you must have tons of gold buried in your back yards! In another 5 years, will it be the same?
Exter's Pyramid. Calculate notional value of derivatives. Calculate government debt and liabilities. Think about counterparty risk. Draw conclusions.
yeah, you look at the historical charts for Au and Ag, and it don't look pretty. Wouldn't touch either with long dong silver's dong.
http://www.macrotrends.net/1333/gold-and-silver-prices-100-year-historic...
No, not a conspiracy. But groups of people who are laboring mightily to keep a worn out fiat running for their masters. By contrast, a dead Fiat car is still worth $240 per ton. A dead promise, not as much.
Attention Children! Play hour is over and its time to get back to your desks! Now, may i talk with your adult person please? We are all disappointed the SGI failed....like me i'm sure you all had visions in your head of suddenly being the only person in your family / circle /commune who was smart enough to see gold before it reached 5000/oz ...well, we aren't there yet.
This is a war, let us make no mistake. The PTB are in a losing position, but they aren't going without a fight.
Remember your mantras:
There are no markets, on interventions.
A debt that cannot be paid , will not be paid.
There is no example of a fiat that has survived .
See to your family's welfare. Stock food and water.
Get out of the ciyies.
....and keep on stackin!
I Am Jack's Complete Lack of Surprise
First the commodities crater, in deflationary death spiral, then equities follow, Central Banks Panick, then extreme printing happens, hyperinflation. This is Napier's call. No matter what the cataylst, or how markets are manipulated, it is all part of nature and it is fate. Something as harmless as oil dropping 50% in 6 months could be something more insidious. We shall soon find out.
There is the need to consider that the same commodity repugnance that has met oil, will hit Gold with the failure of this referendum.
It could well be the one last failure that smashes any illusion of hope and crater the price.
Not at all wishing for it because it has ramifications across the board, but I think it is a possibility.
"Post Swiss Gold Referendum And Bear Raid, Here Comes The Business Press Manufacturing Reality – Eric Dubin"
http://thenewsdoctors.com/?p=250412
Ach, the Swiss, dum kopf, or merde...which ever side you are on.
Serious question. Why do countries like Switzerland hold large amounts of their gold in other countries?
the reason the euros held their gold in the usa was a cold war thing post ww2 that the usa was a safe place to ensure the security of their gold. they apparently think their gold is safer at home since it wouldn't matter where they keep it as long as it is safe.
Why would the common Swiss person vote to upset the applecart? Whether you think it will actually play out or not - for the average person from Switzerland their life is infinitely greater than it was 25, 50 or 100 years ago. Yes, it may end badly, but why do you expect them to understand that?
TOLD JA! There's no way in hell those motherfu**ers are gonna let the gold repatriation to pass. It would be different though, if they make the referendum in 2016 when obozo is out.
Dim sum time coming up. Silver failed to retake $15 and gold cannot climb above $1155.
Diebold much? No problemo! Just flip all the counts.
Peter Schiff says with the Swiss gold fail, Swiss citizens will have less faith in their country's dependence on bloated Swiss Franks and Euros, so gold will be seen as an even better, more secure investment =bullish on gold.
Does this mean the German gold repatriation is back on?*
(*sans the Ukrainian script on the bars)
very wise decision
Switzerland cares about its exports and refused to sink its economy
Conventional wisdom and the 78% agree with you but both SUI and German economies have had great exports in the past with high valued currencies pre-EU.
SUI-land only has 6 million people and 78% of them are bankers. The rest make watches and chocolate.
Keith Weiner reports (access requires free sign-up) that gold futures all the way to the June 2015 contract went into backwardation.
Chart of cobases for different contracts.
This should be interesting.
So many comments here predicting a gold race to the bottom - and what happens in reality? The gold course is raising again - Upsss! Seems that reality punishes some wannabe's GOLD-experts.
And by the way, availability of certain metal like silver is already limited at the biggest store in Germany - proarum.de.
Great to see that the banksters start loosing control of their system!
bull shit, theres a shop here open every business day, you can buy without notice 10kgs of pure gold bars, numbered.
no shortage of physical gold for sale, only a shortage of buyers to push the priceup
Where is here? I was talking about silver and when I check proaurum.de there is only limited availabilty compared to what is usually available!
Deleted comment - sorry
Baaaaaaa. Baaaaaa. Baaaaaaaaaa. <cud chewing>
Swissies have been lured on another topic this week-end :
Another referendum was about the limitation of imigration, which was also massively rejected.
But funny enough, it's only *after* the vote that the Swiss media mentionned a stat by OECD showing that Switzerland was the country with the largest immigration in % of the population - by far. Who knows what the result would have been if the same stat had been published before the vote ?
See the graph at the bottom of the page : http://www.oecd.org/newsroom/shifts-in-migration-underline-need-for-poli....
Right, the Swiss voted not to protect their currency and their wealth. No rigging here.