On 30 November 2014 the Swiss people will vote on ‘The Swiss Gold Initiative’ in a national referendum giving them the opportunity to determine not just the fate of their own financial system but also to be the catalyst for the return to sound money in the Western World.
The above introductory comments are edited excerpts from a post* by Egon von Greyerz (goldswitzerland.com) entitled Will this save the Swiss financial system?.
von Greyerz goes on to say in further edited excerpts:
On November 30th the Swiss will vote on:
- Returning their national gold which is held abroad back to Switzerland
- Requiring the Swiss National Bank to hold 20% of their assets in physical gold
- Prohibiting further gold sales
Switzerland has, for hundreds of years, been a bastion of sound monetary policy and low inflation but this has gradually changed in the last 100 years since the creation of the Fed in the U.S. and especially during the past 15 years when the Swiss government quietly removed the 40% gold backing from the revised Federal Constitution which was adopted by popular vote in 1999.
No paper currency has ever survived throughout history in its original form and the Swiss Franc has gone from having been a strong currency to now being in the process of being slowly destroyed by the recent policies of the Swiss National Bank (SNB)….[which] printed around 400 Billion Swiss Francs in the last 6 years in order to hold its currency down against the Euro and other currencies. CHF 400 Billion is around 2/3 of GDP which means that Switzerland has printed more money, relatively, than any major country in the world in the last 6 years.
Why is this referendum so important?
Because Switzerland now has the opportunity to be the first country in the world with official partial gold backing of its currency. A currency backed by gold means the government and the central bank cannot manipulate the currency at will and print worthless pieces of paper that they call money. This would stabilise the real value or purchasing power of the Swiss Franc. A currency with stable purchasing power leads to stable prices and promotes savings and investment rather than spending and credit…
(Even though the official Swiss inflation is low, there is massive inflation in some sectors like housing and financial assets. The money printing in Switzerland combined with artificially low interest rates have led to a major housing bubble. Swiss housing prices are now unaffordable for most Swiss and in relation to income prices are now in an unsustainable bubble. An increase of Swiss mortgage rates from current 1-2% per annum to a more normal 4% could lead to major mortgage defaults and a housing collapse.)
A “YES” vote in the referendum to partially back the Swiss Franc with gold would:
- be extremely beneficial for the long term prosperity of the Swiss economy and the Swiss Franc;
- make Switzerland respected, once again, by people worldwide for introducing sound money;
- likely set a trend for other countries to follow Switzerland’s example;
- likely have an immediate effect on the depressed and manipulated gold price and
- likely see a major surge in the price of gold as the holders of paper gold will be concerned and demand delivery of the physical gold against their paper claim and there is nowhere near enough physical gold to cover all the paper claims.
“If the referendum passes:
- the Swiss National Bank (SNB) would have to buy about 1,500 tons of gold over the next three years. This equates to half of the world’s annual production and they would have to compete with China to secure supplies. COMEX manipulators can keep the paper prices low for so long, but eventually the overwhelming demand for physical is going to blow up that fraudulent exchange.
- Repatriation would likely mean that the SNB can no longer lease gold into the market via the NY FED, the BOE in London and their private sector partners JPM and HSBC. Leasing (or even selling) is the only reason to “store” gold abroad in the post cold war age.
- It would fully restore confidence in the Swiss Franc and in Switzerland as one of the safest nations in the world.
It is therefore critical that the Swiss people and the rest of the world is made aware of this initiative. If successful, it could be the first step for Switzerland towards a new monetary system based on sound money.]
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://goldswitzerland.com/will-this-save-the-swiss-financial-system/ **http://www.goldstockbull.com/articles/switzerland-repartriate-gold/ (Copyright © 2014 Gold Stock Bull – All Rights Reserved)
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