Recent Posts and Categories

Swiss Gold Referendum: What It Really Means

OWoN: The Swiss Government is owned by the Banks and run by them. If their Banks steal your gold, or defraud you, kiss goodbye any chance in their courts. It's a Cabal. Will it be a straight vote? How old are you?




Swiss Gold Referendum: What It Really Means


Institute for Political Economy
By Paul Craig Roberts
24 November 2014

In a few days the Swiss people will go to the polls to decide whether the Swiss central bank is to be required to hold 20% of its reserves in the form of gold. Polls show that the gold requirement is favored by the less well off and opposed by wealthy Swiss invested in stocks. http://snbchf.com/gold/swiss-gold-referendum-latest-news/ These poll results provide new insight into the real reason for Quantitative Easing by the Federal Reserve and European Central Bank.

First, let’s examine the reasons for these class-based poll results. The view in Switzerland is that a gold backed Swiss franc would be more valuable, and a more valuable franc would increase the purchasing power of wage earners, thus reducing their living costs. For the wealthy stock owners, a stronger franc would reduce Swiss exports, and less exports would reduce stock prices and the wealth of the wealthy.

The vote is clearly a vote about income shares between the rich and the poor. The Swiss establishment opposes the gold-backed franc, as does Washington.

A few years ago the Swiss government, after experiencing a strong rise in the exchange value of the Swiss franc as a result of dollar and euro inflows seeking safety in the Swiss franc, decided to expand the Swiss money supply in line with the foreign currency inflows in order to stop the rise of the franc. The liquidity supplied by the central bank creating new francs has stopped the rise of the franc and supports exports and stock prices. As a vote in favor of a gold backed franc is not in the interest of the elite, it is unclear that the vote will be honest.

What does this tell us about the Federal Reserve’s policy of Quantitative Easing, which is an euphemism for printing an enormous amount of new dollars?

The official reason for QE is the Keynesian Phillips Curve claim that economic growth requires mild inflation of 2-3%. This false theory was put to death by the supply-side policy of the Reagan administration, but the misrepresentation of the Reagan administration’s policy by the Establishment has kept the bogus Phillips curve theory alive. http://www.paulcraigroberts.org/2014/11/14/global-house-cards-paul-craig-roberts/

The claim based in disproven Phillips Curve theory that the Fed’s policy is directed at helping the overall economy is another example of the deception practiced by US authorities. The real purpose of QE is to drive up the wealth and income of the one percent by providing the liquidity that flows into financial asset prices such as stocks and bonds.

Since the 2008 US recession, skeptics of the Fed’s explanation of QE as support for the US economy have stressed instead that the purpose of US economic policy has been to support the federal deficit at low interest rate costs and to support the balance sheets of the troubled banks by pushing up the prices of debt-related derivatives on the banks balance sheets.

These have been important purposes, but it now appears that the main purpose has been to make the rich richer. This is why we have a stock market whose high values are not based in fundamentals but, instead, are based on the outpouring of liquidity by the Federal Reserve. As the economic policy of the US is entirely in the hands of the rich, it is not surprising that the rich use it to enrich themselves at the expense of everyone else. The Fed’s monetary policy that enriches the rich by driving up the prices of stocks and bonds also has robbed retirees of hundreds of billions of dollars, perhaps trillions, in lost interest income on their savings. http://www.lewrockwell.com/2014/11/bill-sardi/how-10000-in-a-bank-in-2008/

As Nomi Prins and Pam Martens have made clear, QE is not over. The Fed is rolling over its interest and principal payments on its $4.5 trillion bond inventory into new bond purchases, and the banks now infused with $2.6 trillion in cash from the Fed are purchasing the bonds in place of the Fed’s QE purchases.

According to the latest news reports, Mario Draghi, the head of the European Central Bank will print all the money necessary to support financial asset prices. http://www.marketwatch.com/story/draghi-says-ecb-will-do-what-it-must-on-asset-buying-to-lift-inflation-2014-11-21?dist=beforebell Draghi, like the Federal Reserve, masks his policy of enriching the rich in Phillips curve terms of driving up inflation in order to support economic growth. Of course, the real purpose is to drive up stock prices.

Like the Fed, the ECB pretends that the money it prints flows into the economy. But given the poor condition of the banks and potential borrowers, loan volume is low. Instead the money created by central banks flows into paper financial asset prices. Thus, the monetary policy of the Western world is directed toward supporting the wealth of the rich and worsening the inequality in the distribution of income and wealth.

The rich are far from finished with their pillage. In exchange for campaign donations, state governors are turning over state pension funds to the management of high-fee, high-risk private pension fund managers who do a better job of maximizing their fee income than protecting the nest eggs of retirees. http://www.informationclearinghouse.info/article40287.htm

Throughout the Western world economic policy is run for the sole benefit of the one percent and at the cost of everyone else. The greed and stupidity of the rich are creating ideal conditions for violent revolution. Karl Marx might yet triumph.

link

3 comments :

  1. Swiss Referendum Could Spark Gold Rush
    Today I was interviewed by the Guardian on the Swiss gold referendum. Again, I was fortunate to share my opinion with a wide audience.

    …The debate has underlined the emotional and arguably romantic pull of the precious metal in an age where less tangible assets dominate.

    “Gold continues to trigger impetuous and irrational reactions in many people,” Sergio Rossi, professor of macroeconomics and monetary economics at Fribourg University, told the Swiss news agency SDA.

    Others say it has rather emphasized the flaws in the monetary system. “It has shown just how unsustainable the debt-based monetary system we have is,” said Koos Jansen, an Amsterdam-based gold analyst for the Singaporean precious-metal dealer BullionStar.

    “The Swiss initiative is merely part of an increasing global scramble towards gold and away from the endless printing of money. Huge movements of gold are going on right now. Recently the Dutch repatriated 122 tons, Germany is bringing home its gold from the US, whilst the Bric countries are accumulating large quantities of it for their banks.

    “While those behind the Swiss initiative have often been portrayed as crazy, they’re merely acting out of fear that their central bank is losing control of its monetary policy, and of the Swiss franc being sucked into this currency war and losing its value,” he said.
    https://www.bullionstar.com/blog/koos-jansen/guardian-swiss-referendum-spark-gold-rush/

    ReplyDelete
  2. Gold is Kryptonite to the Dollar-Bill Holter
    http://usawatchdog.com/gold-is-kryptonite-to-the-dollar-bill-holter/

    With reported fines being levied on banks for gold price rigging, it is clear the gold market is manipulated. Why manipulate prices of the yellow metal downward? Holter says, “Gold is kryptonite to the dollar. The reason why gold and silver prices are manipulated down is to hold up the value of the dollar. And thus, the value to the Treasury market which keeps interest rates down. It allows us to keep interest rates lower than we normally could.”

    What would happen if Russia or China spent $2 billion to clean out COMEX? Holter says, “Russia could do that and China could do that. We would see the entire system implode. The question is do they want to do that. This whole scenario is about bleeding gold from the west. It’s about taking gold from the west and transporting it to the east. Do they want to blow up the game before they got their fill? Do they want to blow up the game before we run out of gold? No, they don’t. Is it this expiration that they are going to blow it up? I don’t know, but I do know the COMEX is killable. The question is have we run out of gold to deliver to China and also Russia?”

    Holter says one of the overarching issues in global finance comes down to trust. Holter explains, “The Russians, Chinese and Indians are all acquiring gold. We have a Swiss referendum coming on Sunday. They want to repatriate their gold. This is about central banks not trusting central banks. Interesting enough, the leading party in the polls in France is talking about repatriating French gold. Why are there all these repatriations all of a sudden? The reason being is central banks are not trusting other central banks. It’s all about trust, and gold is trust. . . . It’s going to be the last man standing.”

    ReplyDelete
  3. Video: This Should Get Interesting – Now The Swiss Want Their Gold Back
    http://www.nesaranetwork.com/2014/11/26/video-this-should-get-interesting-now-the-swiss-want-their-gold-back/

    https://www.youtube.com/watch?feature=player_embedded&v=kqznAyhuz9U

    ReplyDelete

If your comment violates OWON's Terms of Service or has in the past, then it will NOT be published.

Powered by Blogger.