Skybird
01-16-15, 08:08 AM
Yesterday, the Swiss Central bank stopped the linking of the Swiss Franken to the Euro. The consequences you could read in the news. Within minutes, the Euro fell by 30%, and then for the rest of the day went up and down like crazy, by the end of the day having lost over 15%.
The shockwave still swaps around the globe. Hedgefonds, banks, traders had to adapt to enormous losses, in parts were unable to fulfill legal obligations to maintain certain minimum amounts of own capital, and customers of "financial products" sometimes found themselves unable to refinance their holdings, like they also would be legally obliged in several states. Many institutions and fonds around the globe today are bancrupt, banks are ruined and have seized to exist within just 8 hours.
Many described the events as either a tsunami, or a massacre. The Swiss Franken valued up tremednously. Swiss exporters do not like that, nor do Swiss tourism companies.
Why did the Swiss do that, and prepared the step secretly, without warning?
The background is that the SNB was no longer willing to swallow the sh!t done to the Euro by the ECB. The Swiss had to print money like crazy, as the Americans do and did and like Draghi now prepares to do, in order to maintain the minimum exchange rate of 1.20 that they had set as a fixture for trading Franken and Euros. The result is that they bought German bonds in insane amounts, and that they now sit on a heap of German paperstuff that is three times as high as it was three years ago. Everybody knowing a bit about Austrian economics can easily imagine what this means for the Franken, and in the long term for the whole economy. Shake your head in disbelief, and mourn.
The EU is paving the way to have the ECB buying debt bonds by states, by that doing what originally has been prohibited in the Euro-treaties: that the ECB shall never directly or indirectly finance the debt-ridden budgets of sovereign states, and that their should not be a collective responsibility for individual state's debts. The European Court however, obedient servant that it is, has just started to set course for eroding the laws and bypass the treaties under premisses and claims that I cannot describe any different than as extremely dubious. And with Lithuania having joined the Euro in January, a new rule for rotating the national representative in the ECB head gremium has come into effect, having the bankers of the five biggest netto payers loosing their seat for two months in sequence. Every eight months, one of them will loose his seat for two months, giving the net receivers at the head of the ECB a majority in voting seats over the net payers. And currently, Germany is the lucky winner: you read that right, Germany currently has no say at all in ECB decisions, despite being the biggest paymaster of all this corrupted mess. And as the media have indicated and as I have predicted as well: Draghi uses the chance to prepare the announcement of the ECB buying toxic papers and debt bonds, namely of Greece, but others as well, labelling this helicopters-let-money-rain-from-heavens-mission as "stimulus program" in best Keynesian madness tradition.
The Swiss obviously were not willing to shoulder the desastrous consequences of this madness any longer. They have mounted immense losses already for the Euro over the past three years, losses that will become apparent in the longer run, and now they said: better an end with terror than to have this Euro terror without end.
The SNB says the Swiss industries had three years of time to prepare and to set themselves up better, and it argues that many did use this chance indeed, still Switzerland will get hit by the blowback. However I think this blowback will be smaller than the desastrous consequences of having stayed with bthe Euro forever, until its bitter end.
Many now complain about not having been given a word of early warning. But of course you give no word on such decision: to prevent insider deals, and to prevent - in case of to be expected bank runs - an early storm on the counters. Thjat Lagarde from the ICF now also complains only illustrates that she seems to think that switzerland owes to the ICF and is no soverieng nation, and that the SNB is subordinate to her. Anyway, much of her and other people'S criticism, is hypocrisy.
And the moral of the story that I am after? Switzerland is a small country, and is a relatively small actor on the international global stage. Nevertheless they could make a deicison against the Euro, and nevertheless their decision has caused the killing of financial institutions, big fonds and banks in countries across the globe, within 12 hours. And yes, although imo it only is all about a necessary correction of hopelessly overblown stock markets and crazy, insane financial policies, it still is a massacre.
Now imagine if a major heavyweight like China would cancel its currency policies reflecting so heavily the dollar, and would ban trading of US bonds as well (like the Swedish Rjiksbank has already done years ago...). That would make kindlings of American finances - in matches' length, and it would send a shockwave around the globe and also to Europe that would not leave one brick in the walls unmoved.
In a way it is a doomsday machine China is building up there. And its ticking.
Congrats to the Swiss. I often think that when they take criticism for their referendums that are against what the EU wants and the politically correct insane Europeans want, they in fact showed just plain reason and a desire to protect their identity and sovereignty. The past three years have been a mistake that has led them to collect plenty of useless paper and devaluing their currency, so there already are losses, and high losses. It remains to be seen if they can digest them. Nevertheless I agree with the obvious basis of the SNB's decision: that an end with terror is better than terror without end.
Regarding the Euro, a deep mistrust with something and someone, cannot be expressed any more clearly than like the SNB did. For Draghi and the ECB it is not so much a slap in the face, but a kick in the butt. With inrun.
In the end, in some distant future historians maybe will realise that all this criminal acting and insane paper play and conspiracy never has been about saving states or a currency, but about saving banks and the fat cats amongst their clients - at the cost of robbing the ordinary working population.
BTW, take the numbers on how the American economy magically grew in health last year, with a grain of salt, and that means a very big grain of salt. Early last year, creative thinkers in the US had implemented new definitions and calculation rules for calculating the economic key indices, and what now counts forward for the GDP, is sometimes so hilarious that the intention to gloss over things and to pump hot air into empty claims, is all too obvious. The mere announcing of a planned scientific research program now counts as a material gain for the national GDP. Clicking a video on Youtube - now counts towards the American GDP. Streaming a mp3 from some music provider, counts as a gain of the GDP. Consuming a movie at the cinema, now counts as a material gain for the GDP. And so on, the list of added rules is said to be 56 pages long, I read. Also consider that the calculation for the key indices of American economy last year have not been cleaned of the massive tax-aiding and Fed-aiding, all the money that was pumped into the banking sector especially by simply printing notes. All these dozens if not hundreds of billions - are included in the calculation of the GDP as material net benefits, as material gains produced by the economy. However, the losses in the GDP due to the devaluing of the dollar by inflating the amount of notes in circulation, is not reflected, has not been subtracted. So tell me - since when is devaluing money by inflating it, and subsidizing uncompetitive business branches, a net gain that has any material substance so that it boosts the GDP by material, real means?
As a result, you can also see, that the claimed job miracle only was achieved at the cost of adding plenty a of jobs that are not sustaining, and will not last, nor will be of the kind that opens a lasting longterm perspective for the employed.
It's all just tricky and charmful cheating. I have heard of other calculations done by people who are not part of the system and who are not paid by it: calculations that are cleaned of all these effects - and these show a net decline of the Us economy and jobs aftert that cleaning.
The shockwave still swaps around the globe. Hedgefonds, banks, traders had to adapt to enormous losses, in parts were unable to fulfill legal obligations to maintain certain minimum amounts of own capital, and customers of "financial products" sometimes found themselves unable to refinance their holdings, like they also would be legally obliged in several states. Many institutions and fonds around the globe today are bancrupt, banks are ruined and have seized to exist within just 8 hours.
Many described the events as either a tsunami, or a massacre. The Swiss Franken valued up tremednously. Swiss exporters do not like that, nor do Swiss tourism companies.
Why did the Swiss do that, and prepared the step secretly, without warning?
The background is that the SNB was no longer willing to swallow the sh!t done to the Euro by the ECB. The Swiss had to print money like crazy, as the Americans do and did and like Draghi now prepares to do, in order to maintain the minimum exchange rate of 1.20 that they had set as a fixture for trading Franken and Euros. The result is that they bought German bonds in insane amounts, and that they now sit on a heap of German paperstuff that is three times as high as it was three years ago. Everybody knowing a bit about Austrian economics can easily imagine what this means for the Franken, and in the long term for the whole economy. Shake your head in disbelief, and mourn.
The EU is paving the way to have the ECB buying debt bonds by states, by that doing what originally has been prohibited in the Euro-treaties: that the ECB shall never directly or indirectly finance the debt-ridden budgets of sovereign states, and that their should not be a collective responsibility for individual state's debts. The European Court however, obedient servant that it is, has just started to set course for eroding the laws and bypass the treaties under premisses and claims that I cannot describe any different than as extremely dubious. And with Lithuania having joined the Euro in January, a new rule for rotating the national representative in the ECB head gremium has come into effect, having the bankers of the five biggest netto payers loosing their seat for two months in sequence. Every eight months, one of them will loose his seat for two months, giving the net receivers at the head of the ECB a majority in voting seats over the net payers. And currently, Germany is the lucky winner: you read that right, Germany currently has no say at all in ECB decisions, despite being the biggest paymaster of all this corrupted mess. And as the media have indicated and as I have predicted as well: Draghi uses the chance to prepare the announcement of the ECB buying toxic papers and debt bonds, namely of Greece, but others as well, labelling this helicopters-let-money-rain-from-heavens-mission as "stimulus program" in best Keynesian madness tradition.
The Swiss obviously were not willing to shoulder the desastrous consequences of this madness any longer. They have mounted immense losses already for the Euro over the past three years, losses that will become apparent in the longer run, and now they said: better an end with terror than to have this Euro terror without end.
The SNB says the Swiss industries had three years of time to prepare and to set themselves up better, and it argues that many did use this chance indeed, still Switzerland will get hit by the blowback. However I think this blowback will be smaller than the desastrous consequences of having stayed with bthe Euro forever, until its bitter end.
Many now complain about not having been given a word of early warning. But of course you give no word on such decision: to prevent insider deals, and to prevent - in case of to be expected bank runs - an early storm on the counters. Thjat Lagarde from the ICF now also complains only illustrates that she seems to think that switzerland owes to the ICF and is no soverieng nation, and that the SNB is subordinate to her. Anyway, much of her and other people'S criticism, is hypocrisy.
And the moral of the story that I am after? Switzerland is a small country, and is a relatively small actor on the international global stage. Nevertheless they could make a deicison against the Euro, and nevertheless their decision has caused the killing of financial institutions, big fonds and banks in countries across the globe, within 12 hours. And yes, although imo it only is all about a necessary correction of hopelessly overblown stock markets and crazy, insane financial policies, it still is a massacre.
Now imagine if a major heavyweight like China would cancel its currency policies reflecting so heavily the dollar, and would ban trading of US bonds as well (like the Swedish Rjiksbank has already done years ago...). That would make kindlings of American finances - in matches' length, and it would send a shockwave around the globe and also to Europe that would not leave one brick in the walls unmoved.
In a way it is a doomsday machine China is building up there. And its ticking.
Congrats to the Swiss. I often think that when they take criticism for their referendums that are against what the EU wants and the politically correct insane Europeans want, they in fact showed just plain reason and a desire to protect their identity and sovereignty. The past three years have been a mistake that has led them to collect plenty of useless paper and devaluing their currency, so there already are losses, and high losses. It remains to be seen if they can digest them. Nevertheless I agree with the obvious basis of the SNB's decision: that an end with terror is better than terror without end.
Regarding the Euro, a deep mistrust with something and someone, cannot be expressed any more clearly than like the SNB did. For Draghi and the ECB it is not so much a slap in the face, but a kick in the butt. With inrun.
In the end, in some distant future historians maybe will realise that all this criminal acting and insane paper play and conspiracy never has been about saving states or a currency, but about saving banks and the fat cats amongst their clients - at the cost of robbing the ordinary working population.
BTW, take the numbers on how the American economy magically grew in health last year, with a grain of salt, and that means a very big grain of salt. Early last year, creative thinkers in the US had implemented new definitions and calculation rules for calculating the economic key indices, and what now counts forward for the GDP, is sometimes so hilarious that the intention to gloss over things and to pump hot air into empty claims, is all too obvious. The mere announcing of a planned scientific research program now counts as a material gain for the national GDP. Clicking a video on Youtube - now counts towards the American GDP. Streaming a mp3 from some music provider, counts as a gain of the GDP. Consuming a movie at the cinema, now counts as a material gain for the GDP. And so on, the list of added rules is said to be 56 pages long, I read. Also consider that the calculation for the key indices of American economy last year have not been cleaned of the massive tax-aiding and Fed-aiding, all the money that was pumped into the banking sector especially by simply printing notes. All these dozens if not hundreds of billions - are included in the calculation of the GDP as material net benefits, as material gains produced by the economy. However, the losses in the GDP due to the devaluing of the dollar by inflating the amount of notes in circulation, is not reflected, has not been subtracted. So tell me - since when is devaluing money by inflating it, and subsidizing uncompetitive business branches, a net gain that has any material substance so that it boosts the GDP by material, real means?
As a result, you can also see, that the claimed job miracle only was achieved at the cost of adding plenty a of jobs that are not sustaining, and will not last, nor will be of the kind that opens a lasting longterm perspective for the employed.
It's all just tricky and charmful cheating. I have heard of other calculations done by people who are not part of the system and who are not paid by it: calculations that are cleaned of all these effects - and these show a net decline of the Us economy and jobs aftert that cleaning.