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For many economies that's a possibility, but the Swiss Franc has a much larger circulation than proportional to economic fundamentals (like the pound and dollar

by kurthr 4y ago

For many economies that's a possibility, but the Swiss Franc has a much larger circulation than proportional to economic fundamentals (like the pound and dollar). That has to do with the perceived stability of the currency. Normally, a run on a currency doesn't work because it's locally used, but as seen in the collapse of the pound in 92 that made Soros a household name, it could. That would force much higher interest rates in Switzerland (or politically unacceptable inflation).

madaxe_again 4y ago
Yeah, but they’ll just blame immigrants, which will make it politically acceptable. Worked in the U.K. last time around, and Switzerland is increasingly xenophobic, particularly the older generation, who hold the power and the votes.
- saiya-jin 4y ago
  You mean the country that has by far the highest immigrants : citizens ratio in whole Europe? Nationalism is rising on whole continent for quite some time, Swiss expect others to respect their rules and way of life. If that's a mountain too tall to climb for some then they struggle. Swiss are type of general population that when given choice if to have 4 weeks of fully paid vacation or 6, they vote for 4 due to negative impact on employers. Given similar voting freedom to british population gave us brexit. I wouldn't compare them if I were you
  - madaxe_again 4y ago
    The more one believes oneself or one’s countrymen to be immune to such forces, the more likely said forces are to prevail.
pjc50 4y ago
> much higher interest rates Last time I looked Swiss rates were -0.75%, so I don't think having to go back to positive rates would be an unspeakable horror.
- exoque 4y ago
  Are you aware what happened in the last months? You should check the rates again.
  - kurthr 4y ago
    Yep, Inflation at 3%, short rates at 1%, rising 50bp a meeting, expected to hit 2% by June.
everybodyknows 4y ago
No sign of stress on the franc yet, actually up against the euro: https://www.cnbc.com/quotes/EURCHF= https://www.cnbc.com/quotes/EURCHF=
- kurthr 4y ago
  But wow, an intra-day move of 2%!?! I guess it's been banging around a lot lately.

by kurthr 4y ago

madaxe_again 4y ago

Yeah, but they’ll just blame immigrants, which will make it politically acceptable. Worked in the U.K. last time around, and Switzerland is increasingly xenophobic, particularly the older generation, who hold the power and the votes.

saiya-jin 4y ago
You mean the country that has by far the highest immigrants : citizens ratio in whole Europe? Nationalism is rising on whole continent for quite some time, Swiss expect others to respect their rules and way of life. If that's a mountain too tall to climb for some then they struggle. Swiss are type of general population that when given choice if to have 4 weeks of fully paid vacation or 6, they vote for 4 due to negative impact on employers. Given similar voting freedom to british population gave us brexit. I wouldn't compare them if I were you
- madaxe_again 4y ago
  The more one believes oneself or one’s countrymen to be immune to such forces, the more likely said forces are to prevail.

pjc50 4y ago

> much higher interest rates Last time I looked Swiss rates were -0.75%, so I don't think having to go back to positive rates would be an unspeakable horror.

exoque 4y ago
Are you aware what happened in the last months? You should check the rates again.
- kurthr 4y ago
  Yep, Inflation at 3%, short rates at 1%, rising 50bp a meeting, expected to hit 2% by June.

everybodyknows 4y ago

No sign of stress on the franc yet, actually up against the euro: https://www.cnbc.com/quotes/EURCHF= https://www.cnbc.com/quotes/EURCHF=

kurthr 4y ago
But wow, an intra-day move of 2%!?! I guess it's been banging around a lot lately.