An ethical person - like a politician, banker or lawyer - may know right from wrong, but unlike many of them, a moral person lives it. An Americanist first already knows that.
Bankers and their government agents will always act in their own best interests. Any residual benefit flowing down to the citizens by happenstance will just be litter.
On Nov.
30, Swiss voters will cast ballots on a number of issues including the
“Save our Swiss Gold” initiative launched by the right-leaning Swiss
People’s Party. The ballot measure would instantly ban the Swiss
National Bank from selling gold. It also would require that the national
bank keep 20% of its assets in gold within five years. (It currently
has about 8% in gold.) Oh, and it would demand that all the gold be
stored in Switzerland itself. (About 30% is parked abroad right now.)
“It’s
really an attempt to return to some kind of gold standard, for those
who don’t trust paper money and who want gold backing it up,” UBS
strategist Beat Siegenthaler told Reuters.
While
it’s not strictly the same thing as a gold standard—for instance a
classical gold standard stipulated that national banknotes be freely
converted to gold at a fixed price—the Swiss gold initiative is a step
in that direction.
What’s the motivation, exactly?
It
would be one thing if we were dealing with a basket-case currency and
rampant Swiss inflation. But Switzerland’s currency problem, ever since
it cut ties with gold, is that the franc has been far too strong, not
too weak. That’s acted as a drag on the Swiss economy’s high-value
export sector. In fact, it’s been such a problem that the Swiss National
Bank has taken big—some might say risky—steps to smack down the currency, the effects of which would likely be reversed if the bank were forced to buy more gold.
As
for the repatriation stipulation, if Switzerland’s vast holdings of
gold were parked with the Central Bank of Argentina, well, ok then.
But
the Swiss National Bank says 70% of its gold already is in Switzerland,
while the rest is slumbering quietly at the Bank of England (which holds
20%) and the Bank of Canada (with 10%), not exactly the most heterodox
institutions in the world.
And the worst part of the proposed law, according to a Swiss National Bank official by the name of Jean-Pierre Danthine, is the provision that Switzerland must never, ever sell gold again. He explained in a recent speech:
In
combination with the obligation to hold at least 20% of total assets in
gold, this could gradually lead the SNB into a situation where its
assets would mainly consist of gold: each extension of the balance sheet
for monetary policy reasons would necessitate gold purchases, but
whenever the balance sheet needed to be reduced again for the same
reasons, we would not be able to resell our gold holdings. This would
severely restrict our room for manoeuvre.
From
a purely tactical point of view, it would be deeply silly to double
down right now on gold, which gained in value during the financial
crisis but has since slid from its peak in 2011 at nearly $1,900 an
ounce. Committing to buy now would essentially be a giant bailout for
speculators in the gold markets. Bloomberg reports that, given the Swiss
National Bank has some $544 billion in assets on its balance sheet, the
gold initiative would force it to buy more than $56 billion worth of physical gold over the next five years. And if current price trends continue, the value of that gold would be falling.
In
short, the Save Our Swiss Gold initiative doesn’t make sense
economically. (Luckily its chances of becoming law are slim—it would
need to win outright in a popular vote, and also in the majority of
cantons that make up the Swiss Federation.) But referenda like this and
the one Swiss voters recently passed to clamp down on immigration really aren’t about economics. They’re about the increasingly influential rightward drift of European politics, which threatens to result—especially in the case of the Save our Swiss Gold initiative—in some really terrible policies. via qz.com
