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Swiss Parliament Examines ‘Gold Franc’ Currency Today

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From GoldCore

Swiss Parliament Examines ‘Gold Franc’ Currency Today

Gold’s London AM fix this morning was USD 1,575.75, EUR 1,233.95, and GBP 998.76 per ounce. Yesterday's AM fix this morning was USD 1,590.25, EUR 1,245.20, and GBP 1,005.34 per ounce.

Silver is trading at $28.18/oz, €22.18/oz and £17.94/oz. Platinum is trading at $1,462.00/oz, palladium at $607.10/oz and rhodium at $1,275/oz.


Cross Currency Table – (Bloomberg)

Gold edged up $1.60 or 0.16% in New York yesterday and closed at $1,593.00/oz. Gold edged slightly higher in Asia but has now fallen and continued this pattern in European trading where gold is now near $1,576/oz level off about 1% from yesterday’s close in New York.  Gold is about 1% lower in most currencies but only 0.4% lower in Japanese yen after the Japanese downgrade.

Gold succumbed to profit taking after the nearly 5% surge of recent days which saw gold rise from $1,527/oz to $1,599/oz yesterday. 

Market watchers await the European Union summit with regard to the possibility of yet another new plan to solve the area’s debt crisis. Today, during an informal EU gathering, French President Francois Hollande is expected to push for mutualised European debt, an idea that Merkel has opposed.

Resistance is now at the $1,600/oz and support at $1,527/oz – the low from last Wednesday.

Today’s data, 1400 Eurozone consumer confidence for May, 1400 US existing home sales and 1500 Bank of Japan’s interest rate decision.

Swiss Parliament Examines ‘Gold Franc’ Currency Today

A panel of the Swiss parliament is discussing the introduction of the parallel ‘Gold franc’ currency.

Bloomberg has picked up on the news which was reported by Neue Luzerner Zeitung.

The Swiss parliament panel will discuss a proposal aimed at introducing a new currency, or a so-called gold franc.

Under the proposal, which will be debated in the lower house’s economic panel in Bern today, one coin in gold would be worth about 5 Swiss francs ($5.30), the Swiss newspaper reported. The Swiss franc would remain the official currency, the paper said.

The proposal may lead to a wider debate about the Swiss franc and the role gold might again play to protect the Swiss franc from currency debasement.

The initiative is part of the “Healthy Currency” campaign which is being promoted by the country’s biggest party – the conservative Swiss People’s Party (SVP).


Gold Daily Chart  USD – (Bloomberg)

The party is reflecting Swiss people’s concerns about the Eurozone and global financial turmoil and the growing risk of inflation and seeking to reverse the government’s current policy on gold – which is that the Swiss franc is a fiat currency, like all modern currencies and is not backed by gold but by the promises of politicians and bankers.

Buying gold bullion coins and bars and gold certificates requires professional advice in Switzerland and some other countries and banks are the largest providers.  Even the smallest gold coins can cost a few hundred francs.

One of the new gold francs, on the other hand, with a gold content of 0.1 grams, could be purchased for just 5 francs (at current prices) and would mean that gold became more widely owned by ordinary people in Switzerland and could even become a medium of exchange as is happening in Utah, Montana, Missouri, Colorado, Idaho and Indiana in the U.S where gold has become legal tender again or is set to become legal tender again.

OTHER NEWS
(Bloomberg) -- Silver Imports by China Were 236.9 Tons in April, Customs Says
Silver imports by China were 236.9 metric tons in April, according to data released by the customs agency today. That compares with 255.5 tons in March. Platinum imports were 6.9 tons in April, compared with 7.4 tons a month earlier, data showed. Palladium imports were 2.2 tons, data showed.

(Bloomberg) -- Platinum may rise above $2,000 an ounce - Merrill
Platinum may rise above $2,000 an ounce by 2014 once the global economy stabilizes, Bank of America Merrill Lynch said.

Miners in South Africa, which accounts for 79 percent of world supply, are not profitable, Michael Widmer, an analyst at the bank, said in an e-mailed report today.

(Bloomberg) -- Japan; Fitch downgrades Japan to A+; Outlook Negative

(Bloomberg) -- U.S. Mint Silver Coin Sales in May Exceed April Total
The U.S. Mint’s sales of American Eagle silver coins have reached 1.54 million ounces so far in May, according to figures from the Mint’s website. That tops April’s sales of 1.52 million.

(Bloomberg) -- Economist Dennis Gartman Says He’s Buying More Gold in Euros 
Economist Dennis Gartman is adding to his gold holdings priced in euros, he wrote today in his daily Gartman Letter.

(Bloomberg) -- Russia April Gold Holdings Unchanged at 28.8 Million Troy Ounces
Russia’s central bank kept its gold holdings unchanged at 28.8 million troy ounces last month, according to a statement published on its website today.

The stockpile was valued at $47.9 billion as of May 1, compared with $47.8 billion a month earlier, Bank Rossii said.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS
Gold stalls below $1,600/oz; EU summit eyed - Reuters

China trumps India to lead oriental gold rush – The Irish Times

Facebook Tumbles Below IPO Price On Second Day Of Trading - Bloomberg

U.S. lets China bypass Wall Street for Treasury orders - Reuters

JP Morgan traders’ losses double to £4.4 billion –London Evening Standard

COMMENTARY
Commentary: Is a central bank buying? - MarketWatch

Customer Shocked “Allocated” Gold Not in Swiss Bank – King World News

Arensberg: Trading data indicates bottom for monetary metals – Got Gold Report

How JPMorgan Is Like Enron - Bloomberg

 

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Tue, 05/22/2012 - 07:50 | 2450259 Colombian Gringo
Colombian Gringo's picture

Brilliant move by the Swiss, if they have the guts to do it. It would do wonders to restore confidence in their banking system and reputation, especially after UBS threw their US customers under the bus.

Tue, 05/22/2012 - 07:52 | 2450263 GeneMarchbanks
GeneMarchbanks's picture

They want to be insulated from the currency wars ragin' presently. Can't hide behind the Euro for ever. Could just be demagoguery though.

Tue, 05/22/2012 - 09:32 | 2450607 flacon
flacon's picture

Under the proposal one coin in gold would be worth about 5 Swiss francs ($5.30)

 

So that's 1/10th of a gram of gold in the coin? Can you say "gold plated"? Call me when they start making real gold coins.

 

When will governments learn that you can't stamp the value on a gold coin,  you can only stamp the weight. 

 


Tue, 05/22/2012 - 10:31 | 2450873 hoos bin pharteen
hoos bin pharteen's picture

Yeah.  That one opens the door to massive counterfeiting.  They need to go at least with the purity of the Krugerrand and simply start with larger denominations.  .1 ounce seems like a good starting point. 

 

Tue, 05/22/2012 - 10:54 | 2450960 Seb
Seb's picture

0.1 grams of pure gold would be a cube with a side (edge) of 1.73 mm (0.068 inch - a little more than 1/16 inches).

Tue, 05/22/2012 - 10:57 | 2451006 Sojourner.
Sojourner.'s picture

Thats why you need silver coins also.

Tue, 05/22/2012 - 07:52 | 2450265 NewThor
NewThor's picture

A currency made of Gold and Chocolate cannot fail!

Tue, 05/22/2012 - 08:03 | 2450278 Cupid Stunt
Cupid Stunt's picture

Clocks Watches Cheese ?

Tue, 05/22/2012 - 09:31 | 2450616 Captain Benny
Captain Benny's picture

The gold being a record of account and the chocolate helping to keep the peace with hormonal women everywhere... Damn those Swiss are smart.

Tue, 05/22/2012 - 07:58 | 2450275 zilverreiger
zilverreiger's picture

Dont forget it's the US throwing it's citizens under the bus.

Tue, 05/22/2012 - 12:50 | 2451458 engineertheeconomy
engineertheeconomy's picture

There is no such thing as United States, there are only UNITED BANKERS

Tue, 05/22/2012 - 08:14 | 2450299 omniversling
omniversling's picture

May need some guts...last one that tried that was Ghaddaffi with the gold dinar...how did that finish for him..though the Swissies don't have oil I spose..

Tue, 05/22/2012 - 08:22 | 2450310 GetZeeGold
GetZeeGold's picture

 

 

Word is Hillary Clinton killed him with her bare hands.

 

Tue, 05/22/2012 - 08:27 | 2450322 Colombian Gringo
Colombian Gringo's picture

and then Skull Fucked him, since Hillary is really Kissinger  in Drag.

Tue, 05/22/2012 - 09:11 | 2450481 Vince Clortho
Vince Clortho's picture

Hilary / Kissinger.  Neither one of them sports any swingin sausage.

Tue, 05/22/2012 - 08:19 | 2450304 JustObserving
JustObserving's picture

China should introduce such a coin containing 0.1 grams of gold.  That would only be 33.6 yuan at current exchange rates.

And a Rs. 295 gold coin will be a big hit in India.

As fiat currencies crash and burn, it makes sense to introduce gold and silver coins.

 

 

Tue, 05/22/2012 - 10:01 | 2450742 boogerbently
boogerbently's picture

It's starting!

A return to some sort of "Gold Standard". Then they'll run the price of gold UP   :)

Tue, 05/22/2012 - 10:07 | 2450783 ISEEIT
ISEEIT's picture

Trouble is though that in Hell, good=bad.

The Swiss ought to instigate a lottery where 'citizinism' is the prize.

Natural selection meets central planning and central planning loses..

SUPRISE!

Tue, 05/22/2012 - 07:52 | 2450264 It is a bargin ...
It is a bargin my friend's picture

Sensbile policy suggestion alert...close borders invasion imminent

Tue, 05/22/2012 - 07:53 | 2450266 NewThor
NewThor's picture

Suggestions don't solve problems, bro.

Tue, 05/22/2012 - 07:55 | 2450267 AUD
AUD's picture

One gold coin worth 5 francs!?

That's one seriously small coin or they are deliberately overvaluing the franc v gold.

This proposal is DOA, probably why they are proposing it.

Tue, 05/22/2012 - 08:05 | 2450281 CPL
CPL's picture

Funny how math and value always pop up in economics.  At least humans are consistent.  

 

The Swiss are as stupid as every other slob walking the planet and just as involved in the governance of their own lives.

Tue, 05/22/2012 - 08:07 | 2450282 ThirdWorldDude
ThirdWorldDude's picture

Or they simply know which way the gold is going and want to protect Switzerland.

 

If you've read the article, the proposition says that the coins will have 0.1g of gold, which at today's price is 4 euros or 4.8 francs. Toss in the value of the other metal and the minting costs etc. and you'll see that it's a reasonable price. 

Tue, 05/22/2012 - 08:22 | 2450311 AUD
AUD's picture

No, I don't usually read this GoldCore stuff, nothing particularly revealing.

0.1g is a very diluted coin, so I'd still say DOA. Silver would be a much better medium for such small amounts.

Tue, 05/22/2012 - 09:05 | 2450433 ThirdWorldDude
ThirdWorldDude's picture

You don't need to read 'this GoldCore stuff' to see the trends, it's only required that your common sense hasn't been surgically removed...

0.1>0.0 (that's the amount of PM your minted AUD's have) and if I understand the Swiss corectly, I'd say they intend to use this coins as legal tender, i.e. being able to pay for the milk & bread at the convenient store with them, thus the small weight and value of the coins. 

As for the silver, don't worry, it's coming as well once the gold standard has been reintroduced in the economy. 

Tue, 05/22/2012 - 07:56 | 2450269 francis_sawyer
francis_sawyer's picture

They burned down the gamblin' house

It died with an awful sound...

~~~

Smoke on the water... Fire in the sky...

Tue, 05/22/2012 - 07:56 | 2450274 PaperBear
PaperBear's picture

Oh yes, spend the crappy paper Swiss franc and save with the gold Swiss franc.

Tue, 05/22/2012 - 08:07 | 2450286 Quintus
Quintus's picture

I think the Indians, Chinese and others adopted this strategy first, many many years ago.  It's potential expansion into Western Europe is an interesting development though.  

It might even catch on.

Tue, 05/22/2012 - 08:08 | 2450287 Floodmaster
Floodmaster's picture

They're buying Euros by the truckload, buying gold and/or a parallel currency make more sense.

Tue, 05/22/2012 - 08:10 | 2450291 youngman
youngman's picture

They have very Pretty bank notes.......

OK...what am I missing....Japan is downgraded.....should be bullish for gold....as fiats fall...gold should go up....BUT...gold is down today...nothing has changed in the EU..nor in the USA..the world is contracting 10%-20%.....so economies are slowing down..so shall revenues...but spending keeps going up

Tue, 05/22/2012 - 08:25 | 2450317 AUD
AUD's picture

An irrational credit bubble?

Tue, 05/22/2012 - 10:15 | 2450812 boogerbently
boogerbently's picture

Two problems.

Gold has been trading like a "commodity", instead of a "safe haven".

DESPITE all our PRINTING, morons believe that a temporary drop in other global currencies means our USDollar is stronger.

In this recession, gold has (roughly) doubled

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

They'd rather get those MONSTER returns from the govt. dropping every year since 2008

http://www.treasurydirect.gov/govt/rates/pd/avg/2011/2011_12.htm

 

Tue, 05/22/2012 - 08:17 | 2450300 sudzee
sudzee's picture

If this gets the OK, it would re-value gold to roughly 4400.00 francs per ounce if compared to the "old" 20 franc gold piece.

Currently 20 franc gold gold coin contains .1867 pure.

Tue, 05/22/2012 - 08:19 | 2450305 chubbar
chubbar's picture

I think they would be in violation of their IMF agreement if they go forward with this coin. The banksters don't like competition or someone with the ability to store wealth without having to pay the vig to the financial community.

Tue, 05/22/2012 - 08:20 | 2450307 dbomb12
dbomb12's picture

Sounds like they are following the example of the Reichsmark before things really get out of hand

Tue, 05/22/2012 - 08:24 | 2450312 Börjesson
Börjesson's picture

The all important question: Will this coin be permanently fixed at about 5 francs, or will they just launch it with that value, and then allow it to float freely based on the value of the gold content? In the first case, it would be meaningless as a currency. People would just hoard the coins and never spend them, in the reasonable expectation that the franc will devalue against gold over time and the coins' metal value will exceed the nominal value. Or maybe that's the whole point, a way of "tricking" the Swiss into saving more?

Tue, 05/22/2012 - 08:40 | 2450349 Overflow-admin
Overflow-admin's picture

That's an interesting point; I'm sure that the intention is to fix them to 5CHF, not to allow a floating exchange rate (yes, swiss politician rely on dumb people too!).

Another interesting one is the economic value of a .1g gold plated coin (see my comment below).

Tue, 05/22/2012 - 09:45 | 2450636 _underscore
_underscore's picture

That's entirely the point of gold specie though isn't it? They'll value it at the the prevailing gold price in $ (or whatever) & fix the price of their internal prices against gold, et voila > very little or no inflation.

The crucial fact is the small amount of gold, i.e. 0.1 g, so it's not a mint 'special' bullion or suchlike, but a proper money coin. Very shrewd of them, even to consider it, since that concept is now 'on the table' & will underpin a free floating Swiss France as & when the EUR or USD goes pop.

 I have a couple of the old 20 CHF coins (containing 0.1867 Troy Oz gold) & very attractive they are too - or worth the same as  ~58 new 'gold francs' at current $/gold rates.

Clever old Swiss.

Tue, 05/22/2012 - 08:36 | 2450336 Overflow-admin
Overflow-admin's picture

Gold plated Francs? Fuck you les parlementaires, I stick to my .999 pure gold ans silver coins. Not a chance anybody accepts gold-plated Francs, IMHO this is an an intellectual insult... how much would it cost to produce and reprocess the .1g Gold per Franc? SWISS POLITICIANS ARE DOUCHEBAGS. DONT EVER LISTEN TO THEM, THEY ARE PART OF THE PROBLEM, NOT THE SOLUTION.

I thank them for their twist that says so much about their corrupt corporatist attitude.

Tue, 05/22/2012 - 08:53 | 2450399 AUD
AUD's picture

Like I said this proposal is fully meant to be DOA.

Tue, 05/22/2012 - 09:11 | 2450484 Overflow-admin
Overflow-admin's picture

Sorry, I didn't read other comments, I had to say that personnaly ^^

J'en ai gros!

Tue, 05/22/2012 - 08:54 | 2450403 chinaguy
chinaguy's picture

Excuse me, but after the Swiss:

 

a) sold off their gold & stopped backing the CHF with gold

b) let the IRS rape their foreign banking customers

c) pegged the CHF to the EUR

Fuck them - them have lost their cred....& besides watches & chocolate, that was all they had going for them. 

Tue, 05/22/2012 - 09:08 | 2450472 newstreet
newstreet's picture

10 years ago the SNB was a big seller of gold.  Now they are buyers with gold $1,200 higher in price.  I often wonder who bought all that gold back then.

Tue, 05/22/2012 - 09:13 | 2450494 Vince Clortho
Vince Clortho's picture

Imagine the domino effect if any country on the planet goes back to a gold standard.

 

Tue, 05/22/2012 - 09:22 | 2450541 TheTwoJohns
TheTwoJohns's picture

imo backing currency in gold is good. prevents printing press and the borders of normality prevail.

but 0.1g in one coin?? wtf is that?? 

Tue, 05/22/2012 - 09:30 | 2450604 dumbengineer
dumbengineer's picture

I wish some smart ZH kid could stand up and explain what the finance industry will become with gold-backed currency ?

Tue, 05/22/2012 - 09:23 | 2450554 Mr. Magniloquent
Mr. Magniloquent's picture

Breaking News: The U.S. Federal Government discovers Switzerland to be a major hotbed of terrorist training camps, sympathizers, and anti-democracy groups.

Tue, 05/22/2012 - 09:35 | 2450637 TheTwoJohns
TheTwoJohns's picture

a fast reply by FED for Swiss messing with gold and frank. leave it as it is and everybodys happy..

Tue, 05/22/2012 - 09:39 | 2450653 _underscore
_underscore's picture

Not even Mr Hitler fancied invading the Swiss - a trained 'sniper' in every house. They're the most prepped people in europe.

Tue, 05/22/2012 - 11:45 | 2451187 prole
prole's picture

I also noted that neither Comrade Rosenvelt nor Comrade Stalin chose to roll into Switzerland. Those Chocolat loving Swiss also rode the bench in Euro-Suicide 1, saving their population from the wanton (auto) annihilation.

Wed, 05/23/2012 - 03:54 | 2454150 fredquimby
fredquimby's picture

Funny you should say that, as I just added a sniper scope to my Swiss Sturmgewehr 90 semi-automatic rifle.

I wouldn't say I am trained sniper, but I can spray off a 30 round Stgwr magazine pretty well :)

 

Tue, 05/22/2012 - 12:16 | 2450640 Genève Barbegazi
Genève Barbegazi's picture

 

 

 

Tue, 05/22/2012 - 10:25 | 2450854 sudzee
sudzee's picture

The Swiss may be reaching for a solution to devalue the franc. Its a win/win situation. Swiss franc begins trading as pure fiat, and drops relative to other fiat, while the residents are allowed to purchase "inflation protection" for savings in the form of gold. Gov't ownes zip but the gold remains in the country.   

Tue, 05/22/2012 - 11:18 | 2451069 Overflow-admin
Overflow-admin's picture

But! There is nothing in the initiative (in my understanding) that makes it useful in an economic sense. For the currency to have "inflation protection" you have to enable citizens to pay all their taxes with it! There is nothing about it in the initiative, therefore I assume it to be fundemantally flawed.

I only smell Metalor lobbyism in the air... Give a penny to the people and the power to our immaginative entrepreneurs: they'll find a way to take back teh pennies!

Tue, 05/22/2012 - 12:03 | 2451257 the tower
the tower's picture

Very true... The SVP is a manipulative bunch with roots in the banking system and pharmaceuticals  in an ultra nationalist party disguise. They don't care about the Swiss people at all. They are funneling money to Le Pen, Wilders and other ultra nationalists in Europe. They are set on social upheaval so they can benefit financially from the resulting chaos. 

Tue, 05/22/2012 - 12:59 | 2451491 engineertheeconomy
engineertheeconomy's picture

Oops, we accidentally nuked their entire country... tragic...

Hey, did you hear about Charlie Sheen...

Tue, 05/22/2012 - 19:49 | 2453328 prole
prole's picture

Considering most of what Uncle Allah does is obliterate Christians, it wouldn't surprise me.

Kosovo part deux. Kill the Christians, Toby Keith gloats, and his retard horde cheers

(And I told you Swiss to keep your weapons)

Wed, 05/23/2012 - 03:50 | 2454148 fredquimby
fredquimby's picture

Don't worry we have ;)

Tue, 05/22/2012 - 14:46 | 2451941 Freegold
Freegold's picture

If the proposal is fixing the francs value against a specific weight of gold it will fail. Currencys can never value gold, it´s gold that values currencys. Golds valuing role have been managed for nearly a century and that will eventually also fail. It´s just that natural law that will prevail.

Got gold?

Wed, 05/23/2012 - 03:21 | 2454128 fredquimby
fredquimby's picture

"Buying gold bullion coins and bars and gold certificates requires professional advice in Switzerland and some other countries and banks are the largest providers.  Even the smallest gold coins can cost a few hundred francs."

What a load of bollocks!!!!!

You can just walk into UBS and pick up a gold KINEBAR of 1 gram 2 gram 5 gram or more without even pre-ordering it and 1 gram today costs 59 francs so hardly hundreds!!! The smallest current coin available is the 10 franc Swiss Vreneli, it costs 184 francs today.

And funny how Bloomberg picked up on Luzerner Zeitung piece after I posted a picture of the front page yesterday morning....

Cheers!

@spotgoldprice

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