The Swiss have been known for many things. They are renowned chocolate and watch makers as well as financiers. They are well known as a very low crime society where nearly everyone has a gun (maybe this is why crime is low?) but their greatest claim to fame has been their “neutrality. They did not participate in either World War I or WWII. They did however do business with both sides during World War II and profited handsomely. If you recall, many accounts they had held went unclaimed for years because many of the “depositors” were killed during the holocaust.
Swiss bank money repaid to Holocaust victims
When the settlements were made some 15+ years ago, the survivors and heirs received “paper” settlement for their gold deposits. It is also highly likely Switzerland still has untold tons of gold in their vaults from the Nazi Germany regime which was stolen from overrun people and even nations. I bring this up because it is important you are fully aware that Switzerland “knows” gold. Not only do they know gold, they know which is better, paper or gold …which is why they reimbursed claims with paper rather than gold.
With the above in mind, the Swiss National Bank as you know were very big “supporters” if you will of the European paper currency unit, amassing nearly 600 billion euros on their balance sheet. They shook the financial world last week when they announced a drop to the peg floor of 1.20 after publicly confirming it just three days earlier. In fact, the ripples (unintended consequences) have yet to fully play out or be disclosed as derivatives of all sorts were affected.
We asked the question “why”, last week. Why did they drop the peg, especially after confirming it just 72 hours earlier? The common sense reason was because they had to. Euros were piling up on the SNB’s balance sheet with the current 60 billion per month more staring them right in the face. Why accumulate more of something the issuer publicly and purposely wants to dilute?
Fast forward less than one full week and another, maybe the BIGGEST piece to the puzzle has emerged! It appears the Swiss may have been given an offer they couldn’t (shouldn’t) refuse? It was announced yesterday that the Chinese and Swiss have agreed to opening a “renminbi hub” based out of none other than Zurich.
Do you think this deal just came out of the blue? Did the Chinese request, or offer, a renminbi hub AFTER the Swiss announced the end of their euro peg? Or, do you believe the louder Mr. Draghi became and the closer the date of QE announcement came, the Chinese and the Swiss were meeting behind closed doors? As an earth shattering side note, the Chinese publicly and formally also announced yesterday of their intentions for the yuan to be an internationally traded currency!
The obvious takeaway from these announcements is twofold. One we could have certainly speculated on, the other a surprise. First, it is and has been common sense that the yuan (renminbi) was going to eventually become an internationally tradable currency with the speculation of eventually becoming “a” if not “the” reserve currency. This, we could have expected, the timing though was unknown. The not so obvious take and maybe just my own opinion, the Swiss just took and changed sides! I know this is a big statement so I will try to explain my thinking here.
The Swiss surely had to know when they dropped their peg, speculators, financial institutions and even some central banks would be offside and take losses, BIG losses. They could have dropped the peg differently. They could have even moved the peg slightly and not forecast further moves. In other words, they could have made the move slower. They chose not to and according to Christine LaGarde, they gave no prior notice to the IMF. I was not sure last week but now, after the Swiss/Chinese alliance I believe her. I believe this was a bolt of lightning out of the blue to the Western banking system and probably a shot across the bow by the Chinese.
Going just a bit further, the Swiss have actually injured the Western financial system with their overnight and sudden move. Derivatives have taken hits and very well could have set off a chain reaction behind the scenes …which have not yet surfaced? They did this AND moved Eastward at the same time. In my opinion, the Swiss “know” the direction where the power structure is moving. You see, Switzerland has “re” refined several thousand tons of gold over the last few years. They know where the gold came from, they know they received London good delivery gold, they know they recast this gold into “kilo” bars which is good delivery in the East …and they know where they shipped all of this gold. You would not have to be as bright and precise as the Swiss to understand what is happening. They have seen the flow, done the math and watched as “power” (gold) has been moved from West to East.
Before finishing I would like to comment on their “neutrality”. The Swiss have always been connected to the Anglo banking and financial systems. Over the last 3-5 years they (the Swiss financial institutions) have been attacked time and again by Washington DC. with new rules and regulations, FATCA being the obvious. Their institutions have been blackmailed and strong armed into breaking secrecy laws which stood for well over a century. Do you think they liked or enjoyed this? Would they have changed their practice unless they were forced to? Of course not.
So, “what’s in it for them” you ask? This is easy! Switzerland by allying with China is simply following “the power”. They will also be doing business in a “respectful” manner with the Chinese rather than with the disrespect they have worked under with the West. They also will now have another way to transact business, they will be entitled to and even enticed to use the new clearing system that Russia has formed… and not under the watchful eyes of SWIFT! As a speculation on my part, I believe the Swiss fully understand “what” it is that is coming. They can see as well as we can, the collapse is coming. A banking collapse, a derivatives collapse, a trade “war” and collapse, and a currency/credit collapse. If it is obvious to people like us who are not plugged in, it is more than obvious to them being at the heart of global finance. I believe they are simply positioning themselves ahead of collapse and “gittin’ out while the gittin’ is good”! I might add, they are doing this on their own terms and timing, not terms, conditions and timing which are forced on them!
In my opinion, when we look back at what the Swiss are doing and have done, we will simply look at it as “the Swiss did what they had to do and what was best for the Swiss”. They have changed sides so to speak and done so in a front running and hands on manner. This is simply Switzerland doing what it does best …business!
Regards, Bill Holter
Bill,
Isn’t this the big, muscular Black Boss Swan that everyone has been waiting for that just drove his huge webbed foot up the Banksters butt? Or am I wrong?
B.
it is pretty big, no doubt!
“Isn’t this the big, muscular Black Boss Swan that everyone has been waiting”
No. It is just one small piece of the puzzle.
The Swiss are not “small” as you say, the Swiss get it, you should try to understand what exactly it is they are saying right now.
Once again it is not the big, muscular Black Boss Swan that everyone has been waiting. It is pretty big but not THAT BIG.
if you say so?
Hi Bill.
Great article and great way to end the week.
-Rodger-
thanks Rodger, this is my Monday piece but thought it important enough to get out early.
Great article Bill. There is NO doubt as you state that the Swiss have switched sides. The Swiss know Money better than Anything. Also, with the BIS located there – They knew before Drahgi did that the Euro would do its own form of QE. Indeed. They are 1st of the central banksters to position themselves in the coming NEW Russian “swift” system (this year). The Derivatives are exploding and the $ is dying (this year). Americans really NEED to prepare NOW. Have a good one Bill.
thanks Richard.
BIS is the central bank. The reason they are neutral is because they control everything, both sides of wars, politics, corps, people and what better way than to have a beautiful spot in the center of the earth to do it from. The control room.
There is no such person, group or thing that is “neutral or untouchable” on this earth…especially entities of crooked, rotten, evil bastards that continually pass judgment and control on the rest.
Mother nature will handle the Swiss, there will be no neutrality for them when she calls. Everyone will be on the playing field. No is exempt…no one.
“That is how the planet/earth works”
Mother Nature is a beautiful thing!
Amen brother.
As I have said, this move by the Swiss is no mistake. It has been a calculated and well thought out financial business decision, which suits their change of direction and is mutually beneficial to the new upcoming power.
Let’s face the truth, the Swiss haven’t got to where they are by being dumb! To survive and thrive in the middle of Europe for centuries, surrounded by empires that have all come and gone, takes a national instinct for choosing the correct course of action.
The western Anglo/American global financial control, that has held sway for the past 400 years, is now quickly singing it’s “Swan Song”! The Swiss have fully come to the realization that to “cut” losses now, is to prevent any further losses and to heal their economy. Smart.
Yes, “calculated”.
Bill, let me say tks for your thoughts for they reinforce my thoughts and actions.
For now, soon as the snow melts, I’m going to spade my garden, and just choose to not participate in the coming reset.
Oh yes, next summer when your on your way north (everyone from south TX goes through my hometown on their way to CO, it’s one of the “C’s”) if you need anything in the Panhandle, feel free to contact me.
10-4 gig.
“Switzerland has “re” refined several thousand tons of gold over the last few years. They know where the gold came from, they know they received London good delivery gold, they know they recast this gold into “kilo” bars which is good delivery in the East …and they know where they shipped all of this gold.”
Also note that a gold major refiner who has been in business for many years has closed, saying they are unable to verify the source of gold they were receiving.
maybe they have seen some hallmarks they weren’t supposed to? Please see my piece “Is the gold really there”? for Tues..
Nice insights Bill. Let’s not get carried away with the Swiss. Who sold a hell of a lot real gold for a handful of paper? Who just lost $80 billion bucks betting on paper. The first one to jump off a ship built to sink, was still willingly on the ship for 50 years. There are people like yourself that understood all this ten years ago— and you aren’t using a thousand high paid consultants like the SNB.
only using God given common sense.
Bill:
Another fine article. I only wish you could publish two per day! By the way, how long does it typically take you to conceive of a new article and then pen it!
thanks GB. Some come to me out of nowhere and are really easy to write, other times I have to think hard about finding a topic and it may take 3-4 hours to put together. I can tell you this, I think the most clearly and come up with more stuff than any other time while riding my horse in calm togetherness. Plus I am thinking in Spanish while riding because Pricipe’ “es puro Espanol” and doesn’t understand any English! I may try to get him a green card and some of that Obamacare stuff this year!!! He deserves it after crossing the Rio Grande.
I need a little pad of paper with me since it’s hard to remember stuff I think about while being inspired doing something equivalent to your riding horses.
you’ll get to see “mi amigo” Principe’ in a couple of months as my wife Kathy is starting a portrait of him raring up. She’ll title it “Rarin’ to go”.
Bill as always a piece that causes one to think.
The greatest asset that one needs in these times may be COMMON SENSE. Some of the people around me are not only in denial but afraid to take the time to research for themselves and thus reach their own conclusions.
It would appear that many are simply believing that THE GOVERNMENT will not let this reset happen.
The people here that follow your writing for the most part seem to agree the all of these small puzzle pieces may add up to an end result of a totally changed monetary system.
This week could bring more pieces of the puzzle into view but regardless the powers to be are beginning to loose control of their PONZI.imho
Cannot wait to see where we are a week from this morning.
I suspect you will have much to write about as this week passes.
Here is a title for you.. Greece…what do they do now….
yes, lot’s coming down right in front of us.
Mike, sadly I think most of my friends deep down know I’m right but don’t want to admit it because of the ramifications (work on their part?) to their personal, professional and financial lives, not to mention their belief systems. I was always receptive to learning the truth about finance since I’ve always been a bit of a non-conformist and trying to figure out how things work. Other people are content in placing their faith in the friendly bank manager who, with a smile, sells them some retirement plans with a 2% return.
deep down, people do know “somethng just isn’t right”.
Clears up a lot of smoke. Thx 4 posting bill.
“Follow the Money”
you’re very welcome.
Swiss has lost any interest for gold for at least 2 decades with maybe some exception regarding people over 80 !
They are caught in one of the greatest real estate bubble because they are never entitled to pay back mortgage, they can keep 65% debt forever.
They are completely slaved of their financial/banking sector who have dismissed gold, sold it, leased it, and quite surely stole it (allocated gold accounts).
Speaking of gold is switzerland is just heretical concept for any people living in the financial sphere and gold refiners and just for them an industry like precision mechanics.
they had their chance and voted no.
Yes and I am very grateful of the 20%+ people renegade who voted for gold and against monetray folly !
I am quite sure that nearly none of these 20% are working for the “financial industry”.
The swiss franc is one of the biggest bubble of our times with western real estate and some new technology stocks !
In the meantime we have got our 4th attack today on silver, it seems that 1300/18 will not be authorized to be broken up…
maybe not “authorized but these levels will fail.
What is it for a What The Hell headline for this morning?
“Euro rises due to Syriza victory in Greece, and therefore gold price falls.”
???
In this upside down world, up is down & down is up, dumb is smart & smart is dumb?!?!
it’s the new normal, Kitco has 180 degree reverse headlines all the time in back to back stories.