Yesterday January 15th the Swiss National Bank finally threw in the towel and conceded to reality, allowing the Swiss franc to rise against other currencies by up to 30%. Apparently they decided that the equivalent of 495 billion Swiss francs in rapidly devaluing reserves was enough. It was a big day on the financial markets, with both gold and oil jumping on the news. Why is it such a big deal? Because it is the first major break in the dam thus far holding back reality - which is of course that all this paper floating around is worth a LOT less than current asset prices would have us believe. Notable also that the Hungarian government protected its citizens against this disaster by implementing a program to convert Swiss franc loans to local currency. No such luck for the Poles, a fact which they may keep in mind the next time they go to the polls. Mishs take: globaleconomicanalysis.blogspot/2015/01/rabbit-hole-intervention-fails-wild.html
Posted on: Fri, 16 Jan 2015 04:58:49 +0000
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