Boom-bust cycle and flexible currency have been responsible?
All eyes on gold once again in 2014 and beyond…
In Switzerland there is increased demand for the backing of the Swiss Franc, as the Swiss Franc was the currency that held out the longest with an almost 100% gold backing in history.
Now: Swiss parliamentarians urged rejection of a popular initiative that would curtail the Swiss National Bank’s independence by requiring it to hold a fixed portion of its assets in what? GOLD.
The Swiss buckled under pressure and began to sell most of their gold – at ridiculously low prices. At least this is what the informed Switzerland’s central bankers did at that time. Currently the Swiss are again thinking of a long term GOLD backing.
Are we witnessing moves of destroying ‘credibility’ with Gold currency backing?
Members of the Swiss parliament’s lower house voted 129 to 20 with 25 abstentions today against the plan, which demands that at least 20 percent of the central bank’s assets be in gold. It would also disallow the sale of any such holdings and require all SNB gold be held in Switzerland.
Switzerland has some of the highest prices in the world. It could sure use a bit of genuine deflation.
New thinkers conclude:
There should be no ‘flexible currency’ and no central planning of money. They are at the root of the boom-bust cycle. As always in monetary matters, the bill will be presented at an unknown future date, but it could be a very big bill in this case. Real estate boom would require higher wages as usual, this is no coincidence in the boom-bust cycle.
Collected analysis by Nader Ayad, GIA,GG,ISA
