Christian Da Silva November 16, 2014 at 10:15pm
In less than three weeks, the most important election of the year will take place in Switzerland, and you haven’t heard of it.
While the U.S. focuses on the recent Republican victory, the financial markets are facing an earth-shaking event on November 30th.
This Swiss election seeks to challenge the paper currency (Fiat/Debt) system of the last forty years and possibly undermine the existing po
U.S. elections sway back and forth between Republicans and Democrats, but the monetary system never changes nor is ever up for any real debate.
The monetary system of the whole world has been firmly in the hands of Keynesians’ ever since Nixon removed the convertibility of dollars and abandoned the Bretton Woods Agreement back in 1971.
A positive Swiss vote would threaten this by once again providing the world with a choice between a hard (gold-backed) currency and fiat.
Up until recently, it was the Swiss who were the last holdouts against the Keynesian school of thought. Traditionally viewed as the last bastion of sensible monetary restraint, the Swiss succumbed to the siren call of “actively managed central banking” in September 2011, fixing their currency to the Euro under mounting European pressure.
Somehow, having what the world views as the strongest currency is a bad thing when everyone else is printing like crazy. It wasn’t so much the success of the Swiss currency during this Depression 2.0 but the failure of the rest of the world to restrain itself that lead to its appreciation.
Central bankers hate gold, or any hard currency restraint, because it limits their ability to tinker with the system (see FDR executive order 6102). On November 30th, Swiss voters will go to the polls to reassert their historical position of backing their country’s currency with gold, and possibly setting off a new revolution across the financial world by giving people a real choice.
Backed once again by physical gold, the Swiss public may be the first to finally say “enough” to the ongoing manipulation of the currency markets.
No longer would governments be able to create limitless amounts of debt-backed currency without recourse. In response to the constant worldwide manipulations, Russia and China have been aggressively increasing their gold reserves over the last decade. Just recently, even ISIS decided that this is a smart choice as well.
This is a pinnacle moment in monetary history, not only for the Swiss who are reasserting their financial independence, but also for the whole world. What started as a referendum to return a tiny country of 8 million, with a GDP equal to New Jersey, to some semblance of financial sanity, may actually become the wake up call to the world to end the Keynesian delusion that the cure for everything is more debt. Cue the fat lady and the flying pigs.
The likes of Paul Krugman will probably kick and scream that the Swiss are making a poor decision by choosing to return to their fiscally conservative roots. He will be correct in asserting as much. It is a bad decision, but only for the rest of the world that wants to continue following along with a Ponzi economy.
If approved, the “Save Our Swiss Gold” initiative will force three very uncomfortable mandates on the Swiss National Bank and the rest of the Fiat world.
The Swiss National Bank will NOT have the right to sell its gold reserves.
The Swiss National Bank must hold at LEAST 20% of its total assets in gold.
The gold of the Swiss National Bank must be stored PHYSICALLY in Switzerland.
Take a moment to read through these three mandates again. Should they pass, what you just read will upend the existing systems of business as usual. This is probably one of the greatest threats to the monetary establishment in years.
Specifically though, it is a direct threat to the paper world of derivative trading that, by-and-large, trades at magnitudes greater than annual supply. This demand for physical delivery over cash (fiat) settlement could lead to exchange failures as the Swiss National Bank will have to purchase approximately 1,500 tons, or about 50% of the world’s current mining production, over the next five years.
Meanwhile, for some strange reason, Germany has to wait until 2020 to get delivery of its own supply of minted gold, supposedly sitting under New York City.
It is important to note that before the Swiss Central Bank gave in to the Keynesians in the fall of 2011, gold was trading above $1,900 an ounce; since the “fix,” it has steadily plummeted to below $1,200--all while global debt levels have skyrocketed. A positive vote may reverse this trend.
Financial markets are a lot like poker tables, where big stacks can push even the best players around. For a while now paper has trumped physical, but this referendum is the wildcard in the game.
A Black Swan (or in this case, Gold Swan) event of this type may lay bare much of the shenanigans that have been going on in financial circles for some time now.
It was only a short time ago that even suggesting that LIBOR/energy markets were being manipulated would have gotten you labeled as some kind of radical; that is, until the truth came out, and the subsequent lawsuits.
Many have been wondering for years now about gold and precious metal manipulation, and this election may bring that truth to light. Global players may finally be forced to show their hands, rather than settle with cash.
The Swiss currently hold about 8% of their reserves in physical form. This is down from 43% back in 1999 when they began selling it off at decade-low prices along with the British. And as recently as 2009, it was 18%. Where is all of this gold going to come from, and will the markets around the world be able to make good on delivery when such a large buyer is made public?
This standing order may provide a floor on the recently falling gold market, but more importantly, it may just undermine worldwide currencies.
For those unfamiliar with Swiss elections, the law prohibits TV and radio advertising by individuals or special interest groups to ensure that these people-driven issues are spread and debated about by word-of-mouth, not by multimillion-dollar ad buys, like they are here in America.
Issues like abortion, minimum wage, and infrastructure projects are routinely decided upon directly by the people of Switzerland, not in backroom deals by politicians. This election will be free from what many describe as outside influence.
Swiss voters are hoping to soon decide the fate of their own currency. If they are successful, and recent polling data suggests they will be, they will remove control of their currency from the hands of the experts who sold off the bulk of their gold reserves at prices between $300-$500 an ounce over the last decade and a half.
The once bitten, twice shy Swiss hold the fate of future monetary policy in their hands with their upcoming vote--the repercussions of which will be felt all across the globe if they vote YES..
For the outsiders, the real fun will come in the next few weeks while we watch these same Swiss government officials try to explain why restoring a sound currency, that served them very well for hundreds of years, is now a very bad idea.
Their answers will likely provide fodder for Swiss laugh tracks for years. Stay tuned.
This article in no way should be considered an endorsement or solicitation to buy or sell any security.
Mac November 16, 2014 I hope Recaps pick this up! To the PTB. I know some of you think we are toothless crack heads and will lose our money in two years or less.
However I want to tell you a story. I just left the wake of my cousins mother. His mother had 5 foster children in whom they have grown to love like family.
With the mother now gone either the children go to the state or my cousin must take them in along with his own two children. Him and his wife make meager salaries. Imagine taking 5 more people into your house. Imagine feeding, clothing, even the cars must change, housing as well.
So as his cousin how nice would it be for me to help lift this heavy load? So for some of us its not about the car we want to buy, house, jewelry and clothes.
Some of us really have some people we want and need to help. We are not some toothless crack head looking for the next high! We get high when we help those in need!!
Let this go so we can get to work! People are suffering, some of you have not a clue about suffering so you have no compassion. Let this GO!
Underdog > Mac, this is a tough and sad situation. I am afraid the PTB are heartless with NO compassion. They have no clue what it is like to be struggling paycheck to paycheck.
These PTB actually look forward to us "toothless crackheads" to be broke in 2 years because they will be the one to be on the receiving end of ending up with these millions.
Example the new legislation from the G20 this past week making laws to protect the bankers.
Good luck with your families situation.
Happiness > Mac So sorry for your loss. That is the problem - the PTB have no compassion. They would prefer we are poor and in need and they can control us. How sad.
RA November 16, 2014 Just saw this and wonder what it may mean from ZAP:
Unexpected conference meetings regarding Global matters has delayed the release of “The Office of Poofness” newsletter until tomorrow, Monday, Nov 17th, late afternoon eastern time.
D.K.C. > RA November 16, 2014 I'm hoping it means really good news for us all!!!
bullet » November 16th, 2014, 11:15 pm
G20 Report See Bank note def. below.
Bank deposits will soon no longer be considered money but paper investments.
This weekend the G20 nations will convene in Brisbane, Australia to conclude a week of Asian festivities that began in Beijing for the developed countries and major economies. And on Sunday, the biggest deal of the week will be made as the G20 will formally announce new banking rules that are expected to send shock waves to anyone holding a checking, savings, or money market account in a financial institution.
On Nov. 16, the G20 will implement a new policy that makes bank deposits on par with paper investments, subjecting account holders to declines that one might experience from holding a stock or other security when the next financial banking crisis occurs.
Additionally, all member nations of the G20 will immediately submit and pass legislation that will fulfill this program, creating a new paradigm where banks no longer recognize your deposits as money, but as liabilities and securitized capital owned and controlled by the bank or institution.
In essence, the Cyprus template of 2011 will be fully implemented in every major economy, and place bank depositors as the primary instrument of the next bailouts when the next crisis occurs.
On Sunday in Brisbane the G20 will announce that bank deposits are just part of commercial banks’ capital structure, and also that they are far from the most senior portion of that structure. With deposits then subjected to a decline in nominal value following a bank failure, it is self-evident that a bank deposit is no longer money in the way a banknote is.
If a banknote cannot be subjected to a decline in nominal value, we need to ask whether banknotes can act as a superior store of value than bank deposits? If that is the case, will some investors prefer banknotes to bank deposits as a form of savings? Such a change in preference is known as a "bank run."
Each country will introduce its own legislation to effect the ‘ bail-in’ agreed by the G20 this coming weekend.
Large deposits at banks are no longer money, as this legislation will formally push them down through the capital structure to a position of material capital risk in any "failing" institution. In our last financial crisis, deposits were de facto guaranteed by the state, but from November 16th holders of large-scale deposits will be, both de facto and de jure, just another creditor squabbling over their share of the assets of a failed bank. - Zerohedge
For most Americans with savings or checking accounts in federally insured banks, normal FDIC rules on deposit insurance are still in play, but anyone with over $250,000 in any one account, or held offshore, will have their money automatically subject to bankruptcy dispursements from the courts based on a much lower rank of priority, and a much lower percentage of return.
This also includes business accounts, money market accounts, and any depository investments such as a certificate of deposit (CD).
What makes this sudden push to securitize cash held as bank deposits is the pending question of whether the central banks or sovereign governments know that a crisis is forthcoming, especially in light of Europe's rapid decline into recession, and Japan's need to monetize their entire budget through central bank easing?
Just as people thought the ownership of gold and silver was inviolate prior to 1933 when the government ordered it confiscated to bailout the banks and Federal Reserve during the Great Depression, we are all now faced with the realization that the money we thought was our own, and protected in our checking and savings accounts no longer is. And after Sunday at the G20 meeting, the risks of holding any cash in a bank or financial institution will have to be weighed as heavily and with as much determination of risk as if you were holding a stock or municipal bond, which could decline in an instant should the financial environment bring a crisis even remotely similar to that of 2008.
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Banknote - Wikipedia, the free encyclopedia en.wikipedia.org/wiki/Bank_notes
A banknote (often known as a bill, paper money, or simply a note) is a type of negotiable instrument known as a promissory note, made by a bank, payable to the bearer ...
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