Desperate Swiss eye euro peg to repel safe-haven flood

 And when the Swiss franc is closed as a safe haven amid the worldwide storm of currency devaluation, what's left as a safe haven but gold?

* * *

By Ambrose Evans-Pritchard
The Telegraph, London
Thursday, August 11, 2011

The Swiss franc retreated against the euro in a wild one-day move on Thursday after top officials at the Swiss National Bank (SNB) floated ideas for a temporary euro peg, a once-unthinkable move.

"Nothing is excluded," said Jean-Pierre Danthine, a SNB board member. "The situation is extremely complex and difficult. There is no magic wand."

The Swiss franc has moved with gold over recent weeks, acting as a magnet for capital flight from the discredited debt currencies of the West. The SNB said the franc is "massively overvalued" and has moved into dangerous territory over the past month.

The hotel and restaurant lobby GastroSuisse said the 240,000-strong tourist sector was in an "extremely precarious" state, while the machine tool industry risks major layoffs and loss of investment to foreign sites.

The SNB has already flooded the banking system with SwFr 80 bn (L65 billion), a vast sum for a country of less than 8 million people. This was overpowered by a wall of money on Wednesday after contagion hit French banks and the US Federal Reserve pledged to hold rates near zero until mid-2013.

You can read the rest of the article here

http://www.telegraph.co.uk/finance/financialcrisis/8696289/Desperate-Swi...