In a surprise move the Swiss National Bank (SNB) has fixed the exchange rate to the Euro. They won’t suffer it to fall below CHF 1.20 anymore. There is no limit to currency purchases to make this happen, the SNB says.
Right wing billionaire and godfather of the Swiss People’s Party (SVP) Blocher declared the currency situation a “war” that needs to be won now by the SNB. Well, his buddies won’t be any worse off…
I am not so sure if it can be won. Swiss real GDP is some126 bn. The Eurozone’s combined GDP is about 12 trillion. There are 77 bn Swiss Francs out there, but 4.7 trillion Euros. (M1)
You might as well try and empty the Zurich Lake with a teaspoon.
TheZoo 
I’m glad you understand this stuff, EV. 🙂
I wish I could pretend to understand the implications of this. Truth is, I don’t. I don’t understand the workings of our Fed and I don’t understand the reasoning behind devaluing the dollar against other currencies to pay our massive debt. Well, in a way I do. But then again, I remember when the US was the world’s creditor instead of the world’s biggest borrower.
For us little guys, the ones that travel overseas on occasion, it just means that it takes more US dollars to buy goods and services while overseas now, as opposed to, say, 20 years ago when the dollar was strong and would go a very long way to purchasing things from overseas.
I wish I understood fully, then I’d be RICH! As it is, inflation will eat my pension plan 😦
Here’s a good starting point: Currency Debasement – Kings have used debasement to screw the population for millenia – in these days of paper money – it’s nothing different.
The term ‘quantitative easing’ – same thing – injecting more 0s into the computers which store the funds of one currency in order to drive down the value of that currency.
But WHY would a country want to drive down the value of it’s own currency? I can’t remember it happening before the debt that Reagan ran up in the 80’s.
Devaluing a currency makes paying down debt easier. Also, it boosts exports as the products become cheaper, but imported raw materials become more expensive.
We can pay down the US debt in two ways. The wealthy can give back the billions they reaped during the low tax years, or we devalue the currency. Which do you think we’re going to do?
Or, there actually is a third way. We could go back to manufacturing things in the US, and earn our way out of debt.
That has a very nice ring to it!
Well its coming down to burgers, pizzas and truth are about all we’re good at these days.
I would like the third way very much please.
For us little guys, the ones that travel overseas on occasion, it just means that it takes more US dollars
Welcome to the Zoo Emmanuel!