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I wasn’t sure what to write this morning, until I
just saw another “rumor” about what the Swiss National Bank might
do next to manipulate its currency. And then it became obvious.
Two weeks ago, to be specific 4:00 AM EST on September
6th, the Swiss National Bank decided to PEG the almighty Swiss
Franc to the dying Euro, a move that devalued the Franc by a whopping 8% in a
matter of minutes. This action, more akin to those of Banana Republics, not
only was a blow to holders of Francs, but the end of the LAST REMAINING
COMPETITOR to GOLD and SILVER for the role of SAFE HAVEN CURRENCY.
But before I go into the specifics, I wanted you to see
how COORDINATED the Central Bank GOLD MANIPULATION IS!
As noted above, the announcement occurred at 4 AM EST
on September 6th, with gold literally sitting a few dollars from
its ALL-TIME HIGH. This INCREDIBLY GOLD-BULLISH news would have easily
catapulted it above $2,000/oz in a freely-traded market, but the Swiss made
sure the banks ATTACKED gold with a DEATH STAR assault just minutes BEFORE
the announcement, to the tune of roughly $50/oz!
Then, when it naturally recovered, at EXACTLY 12:00 PM
EST a second DEATH STAR assault, this time of roughly $40, to make sure the
“excitement” over gold losing a primary safe haven competitor
would be quashed (but just TEMPORARILY, gold warriors!).
Back to the devaluation news…
The Franc is just as much a FIAT CURRENCY as the
others, and ultimately in line for the same fate. However, it has been
historically viewed as a safe place to store wealth due to the nation’s
military and monetary neutrality, favorable tax laws, and relative fiscal
conservatism. In fact, up until 2000 it was national law that outstanding
Francs must be backed at least 40% by Central Bank gold reserves, so
(assuming TRUTHFUL gold and Franc reserve accounting), the Franc was in fact
the last remaining currency to have some semblance of a gold standard.
But Swiss monetary reversed dramatically after 2000, yet
investors as a whole, as is typical, still live in the past, as if they still
think Switzerland is a “safe haven” (not much different than the
2002 mentality that internet stocks would revive, or today’s HOPE that
real estate will “bottom” any day now). Back to the Franc, nearly
all semblance to “Old Switzerland” is
gone, aside from its avoidance of joining the Euro and its complex, in many
cases legally questionable, tax haven practices. The Franc essentially joined
the Euro on September 6th as a de facto member, abandoning
its conservative monetary history by committing to PRINT UNLIMITED FRANCS to
ensure it trades at parity with the Euro, no different than what the Chinese
do to peg the Yuan to the dollar or the Fed to peg the Fed Funds rate to ZERO
(sorry, 0.00% – 0.25%).
Moreover, the reason Switzerland repealed the 40% gold
backing referendum in 2000 was due to its decision to dishoard the majority
of its gold under the Washington Agreement (1999-2004) and Central Bank Gold
Agreement (2004-2009) accords, discussed at length in yesterday’s RANT,
“CENTRAL BANK GOLD – THE LAST BASTION OF LIES”. In fact, of
the roughly 4,000 tonnes of gold sold under that
agreement, nearly 40% of it, or 1,550 tonnes, was
by the supposedly conservative SWISS!
To wit, for all the heat the UK (rightfully) has taken
for selling more than half its gold at the politically-motivated “Brown
Bottom” in 1999, it ONLY sold 400 tonnes of
its 715 tonne reserve, while Switzerland from
2000-2008 sold 1,550 TONNES of its 2,590 tonnes
reserve!
Perhaps the tabloids aren’t as vicious in
Switzerland as Britain, or (as noted above) the world continues to lionize
the Swiss conservatism of the PAST, but irrespective I find it REMARKABLE
that the SNB (Swiss National Bank) is not EQUALLY VILLIFIED for the sale of
60% of its reserves at an average price well below $1,000/oz, just as the
gold bull (and fiat bear) started to gain strength. And not only that, but
taking the remaining fiat shell and pegging it to the EURO, a currency which
literally might collapse ANY DAY, in my view completes one of the most
spectacularly ruinous decades of financial policy of ANY NATION IN HISTORY.
I mean, Switzerland didn’t NEED to sell its gold,
and didn’t NEED to peg the Franc to the Euro, but did so anyway because
its bankers are as equally EVIL and SELF-MOTIVATED as the SOCIOPATHIC
monsters in charge of the Fed, the BOE, the ECB, and BOJ!
OK, forward again to TODAY, when this shocking news
just hit the tape!
http://www.zerohedge.com/news/switzerland-lau...save-swiss-gold
Apparently, the Swiss people are fighting back against
the lunacy, submitting a referendum to prevent the SNB from selling ANY of
its remaining 1,040 tonnes of gold, and demanding
that gold back at least 20% of the outstanding currency, compared to just 16%
currently (assuming the SNB is not lying about the amount of outstanding
currency or unencumbered gold, of course). This represents a DRAMATIC
reversal of the current course of currency destruction, and if passed would
require the SNB to either BUY gold in the open market or once again delink
the Swiss Franc from the Euro!
No matter what the SNB does, fear not gold and silver
army, the tides are washing over the fiat currency evil, soon to be
permanently. The financial tsunami is now in full view, and the Western world
is helpless against it. Their politicians must
“inflate or die”, although what that really means is
“inflate and die more horribly later”, and that
“later” is getting awful close now. To use the tsunami analog,
printing more money is just enabling the peasants to walk a few yards further
from the beach.
In the coming weeks, you will be besieged by propaganda
trying to convince you the Euro is sound and the U.S. economy recovering (or,
more likely, it WILL thanks to QE3 and Obama’s jobs bill). But we all
know it won’t, and I’m hard pressed to believe ALL won’t be
out on the table by the middle of 2012, if not sooner.
Use ANY AND ALL opportunities, such as the one afforded
this week before the Fed and G20/IMF meetings, to LOAD UP THE BOAT on GOLD,
SILVER, FOOD, and OTHER ITEMS OF REAL VALUE.
PROTECT YOURSELF, and do it NOW!
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