Choosing a long-term view, and why Switzerland is shooting itself in the chocolate
Typically, an emergency financial news from the West delivers Greece, but this time they have come up with a completely unexpected direction, from Switzerland.
Just a few weeks ago, the central bank of the country gave a soothing statements about the continuation of the current year: the artificial retention of the Swiss franc at around 20% cheaper than the euro. On Thursday, the franc against the euro has been sudden untied. Within hours after the start of trading the national currency has soared by 30%.
While investors were happy the Swiss banks, stock markets have fallen into the abyss. All of the country's export-oriented and tourism, have ceased to be competitive, and their stocks have collapsed in unison, creating seismic waves in all quotes. UBS AG -8.7%, Swatch -14.5%, Zurich -9%, Nestle -7.5%, then everywhere. Glory banking powers number one does not interfere with Switzerland a lot to produce and export. Watches, jewelry and medicines, complex mechanisms and the famous chocolate. 40% of it consumed the European Union, which is itself always loved anything to produce and export, and just place it on the domestic market will never reach them. Swiss manufacturers are suddenly deprived of these places, giving the chocolate in Belgium, France, pharmaceuticals and mechanics - Germany.
Bind itself to the euro gave rise to a similar crisis in 2011. Frank had to be protected from the crisis scared investors from the euro zone. The course took off so that the Swiss export companies began to go bankrupt, and the Central Bank of Switzerland announced buying euros "in unlimited volumes" to lower the rate of return. Continue in the same vein, is about to become impossible: the ECB is planning to launch a program of quantitative easing, and even more to weaken the euro against the Swiss franc.
Given the suddenness of reversal in Swiss carefully planned operation in front of us. It affects not only a ruthless and cold-blooded surgical precision with which suffered a blow, but the fact that the blow inflicted on ourselves. Moreover, with the determination that says - now or ever. There remains only one reason, resolving the Swiss Central Bank to make a move with such losses.
Hence, by Zurich opinion, the alternative is even worse. Much.
The Swiss do not like to lose money, and probably even more do not like to lose 40% of exports, and who knows how many tourists. In the field of finance decided to pay attention not only to act, but even on the Swiss regulator words, and if he suddenly makes such a move, but still at a loss, then tomorrow will be too late.
What the Scylla and Charybdis between which Zurich wants to slip in alone?
Scylla is still possible to feed and survive Swiss chocolate and Charybdis will take everything. Close the threat of a Greek exit from the eurozone is obvious. Not least because that the program of quantitative easing Greek bonds are not included in any way. Naturally, this will lead to the collapse of banks, several times resell its debts. And this is not only the voltage. No matter how addresses specific problems of the eurozone, on the Swiss Central Bank point of view, we still do not get full picture is not seen. And whether it is necessary?
It is enough that the losses from knock off ties with Europe have them weighed and found to be small compared to the abyss into which you can get away with. What specifically Swiss professionals see the future of the eurozone, it is easy to understand if to escape from it, they are ready to shoot yourself in the chocolate.
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