This wont stop – all fiat currencies will continue to devalue over time – I had a gentleman ask me a few days ago ‘Yes but why buy gold? It doesnt give you a return?”

On the contrary, when measured against USD gold has outperformed every other asset class there is for almost 10 years running.

“Competitive Devaluation” will ensure this is a trend that continues.

SNB moves to calm Swiss franc appreciation

By Peter Garnham

The Swiss franc settled back into its recent trading range on Monday after violent price action on Friday that saw it retreat sharply from an 11-month high against the euro on speculation that the Swiss National Bank had intervened in the currency market.

But the Swiss franc dropped sharply, pulling back below SFr1.47 against the euro, on talk that the Bank of International Settlements had intervened in the market on behalf of the SNB to sell the currency.

As has become usual practice, neither the BIS nor the SNB would confirm that any action had been taken. It is widely believed, however, that the central banks have been active in the market on at least three previous occasions since March to stem the franc’s rise.

Just last month, the SNB reiterated that it would counter any “excessive” appreciation of the franc against the euro.

Ulrich Leuchtmann at Commerzbank said it was clear the SNB would have thought that “enough is enough” as it saw the Swiss franc move sharply higher.

He said, however, that it was also clear that the central bank was not defending the SFr1.47 level against the euro, given that it stood by as prices moved to SFr1.4650 without reacting.

Indeed, only a renewed surge in the Swiss franc early on Friday evening provoked the SNB into action.

“That makes it clear that the SNB is interested in the speed of the franc’s appreciation and not in a particular level,” said Mr Leuchtmann.

“For as long as the Greece crisis puts pressure on the euro, the franc is likely to be under appreciation pressure.”

Hans Redeker at BNP Paribas said the appreciation pressure on the Swiss franc against the euro had come not just from worries over Greece, but also on increasing signs that the economic recovery in Switzerland was outpacing that in the rest of Europe.

“We continue to believe that from a structural point of view the Swiss economy is in a better position – with no debt overhang or asset market bubble to deal with – to sustain the current pace of recovery compared to its European partners and hence we expect the Swiss franc to remain supported.”

He said given improving conditions in Switzerland, it now appeared that the SNB was more willing to tolerate Swiss franc strength as long as the pace of appreciation was not too fast.

“We expect the euro to remain under pressure against the Swiss franc, especially since the problems at the periphery of Europe are expected to intensify,” said Mr Redeker.

The Swiss franc eased 0.2 per cent to SFr1.4719 against the euro on Monday.

Original Article

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