Swiss De-Pegging Reveals Worthless Western Currencies

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January 21, 2015 4:13pm NYSE:FXF

switzerlandJeff Nielson: A major economic event has occurred. The government of Switzerland ended its “peg” to the euro with its own currency, the Swiss franc. This resulted in the franc catapulting higher in its exchange rate versus the euro (as well as other currencies).


We know this is a major economic event, because the Corporate media has expended a considerable amount of time/energy “covering” and “explaining” this event.

However, as all regular readers know; the Corporate media doesn’t engage in its coverage and explanations to provide information to the general public. It does so to provide misinformation, i.e. propaganda. We see this dishonesty evidenced by the efforts of the Corporate media to portray this move as a surprise.

The Swiss National Bank stunned markets on Thursday, when it scrapped its three-year-old peg of 1.20 Swiss francs per euro.

The obvious question which arises in the minds of those viewing this lie is this: since the Swiss government had no choice but to end the peg; how can doing something it had to do be considered a surprise? This question becomes “obvious” as soon as readers are given an explanation of how a government “pegs” a currency, and why a government pegs a currency – something which the propaganda machine refuses to do.

“Pegging” a currency is a simple, brute-force act of market manipulation. Indeed, the manipulation is directly implied in the term itself. In a world of (supposedly) “floating markets”; one government endeavors to literally “fix” its currency to another, at a constant rate of exchange. As regular readers have been told on many previous occasions; no form of market manipulation can be maintained permanently, since any ongoing manipulation creates greater and greater economic imbalances – and thus ever-increasing “pressure” in markets to correct this imbalance.

Therefore the day that Switzerland’s government began this act of currency manipulation, it already knew that this could only be a temporary band-aid. Thus we immediately see that the efforts of the Corporate media to depict this as a surprise are obvious lies. But it brings us to the second question (which the Corporate media also refuses to answer/explain); why did Switzerland’s government originally feel compelled to engage in this unsustainable policy of market-manipulation?

Typically, when one government seeks to “peg” (fix) its currency versus another currency, it is a stronger currency being pegged to a weaker currency, as we saw with China’s peg to the U.S. dollar. The motive for stronger currencies being pegged to weaker ones is relatively simple.

When a currency rises in value; this is almost always good for the people of that jurisdiction, but usually bad for the government. Why is this? Simple. As holders of that currency; the people naturally benefit, because as the currency rises in value, so does their purchasing-power – they get more “bang” for every “buck”.

Conversely, as (inevitably) the biggest Debtor of that currency; governments don’t like to see their currency rise in value because it increases the “size” of their debts (in real dollars). The second reason why governments like to debase their currencies (rather than allow them to rise in value), is the silly “import/export game” in which nearly all governments now engage.

International trade, as a simple function of logic/arithmetic, must always be a zero-sum game. For every seller (i.e. exporter) there must be a buyer (importer). Total global exports must always equal total global imports. Yet to try to gain an (illegitimate) “advantage” in this game; we see governments deliberately destroying the value of their own currencies.

By destroying the value of their currencies (our “money”); exports of that nation become cheaper (in real dollars), thus our simplistic/idiotic governments believe they can all “increase exports” by destroying the values of their currencies simultaneously. This is called “competitive devaluation”, and it is the official economic policy of all Western governments – including the government of Switzerland.

There are two extremely obvious problems with respect to this idiotic policy, and numerous other problems which are merely obvious. To begin with (as already noted); everyone cannot increase their exports in a zero-sum game. And (as also explained) no individual nation can gain a permanent advantage by cheating in this manner, since the market-manipulation involved in this cheating is unsustainable over the long-term. Thus all our idiot-governments are accomplishing with this insanity is to (pointlessly) destroy their own currencies – i.e. economic suicide.

To understand how destroying the value of a currency destroys an economy, we need merely look toward Russia, and the current economic terrorism being directed against it. How is the U.S. (i.e. its puppet-masters, the One Bank) endeavoring to destroy the Russian economy? By destroying the ruble. Meanwhile, our Kamikaze governments have been doing the same thing to themselves (and us) for decades.

The second, extremely obvious reason why “competitive devaluation” is a terrible idea is that while it may (temporarily) increase the quantity of exports for that nation, it reduces what they are paid for their exports – in real dollars – because their own currencies are worth less (worthless). We are effectively giving-away the production which the workers of that nation toil to produce, day after day, year after year.

It is in this context of manipulation and suicidal insanity that we can now view the non-surprise of Switzerland’s government ending its peg to the euro. With the Swiss franc being the “stronger” currency (in a world of weak-and-weaker paper currencies); in order to maintain the peg, it was forced to buy-up enormous quantities of euros.

These sham-transactions create artificial demand for the euro, thus pushing up its exchange rate (temporarily). The problem is that this is the ultimate short-term band-aid, and every few weeks the Swiss government would be forced to “buy” more euros, to create new/artificial demand.

The result of all this silliness is that (surprise! surprise!) Switzerland’s government (or rather its central bank) had ended up with a huge hoard of euros, prompting this headlineeight days before Switzerland supposedly “stunned” the world:

Swiss forex reserves hit record high after December intervention

Of course the word “intervention” is just the liar-talk of media drones, politicians, and (most-particularly) the bankers pulling their strings. What they mean is the latest manipulation by Switzerland’s central bank, after three years of such serial acts of market-manipulation.

How large was the mountain of euros being hoarded by Switzerland’s central bank? With official reserves approaching $500 billion (US); the Swiss central bank was hoarding a mountain of money nearly equal to the national GDP of that nation.

Here it must be understood that as with any hoarding of wealth; every euro/franc/dollar being hoarded by Switzerland’s central bank weakens the Swiss economy, and (indirectly) reduces the standard of living of Swiss citizens. This is one of the main reasons why our own economies are withering-and-dying, and our standard of living has already plummeted by more than 50%.

As the ultra-wealthy hoard more and more and more $trillions (the largest hoards of wealth in the history of our species), and because money is literally the “life-blood” of any economy; all our nations are becoming increasingly economically anemic. These (wealthy) Vampires have sucked-out all our “blood”. Even the IMF (bastion of banker wealth) was forced to concede that the more “unequal” our economies become – i.e. those on top having more, and everyone else having less – the weaker they get.

Thus a currency-peg is not merely a temporary measure, it is an act of desperation (as are all acts of suicide). The day the Swiss government announced its “currency peg” to the euro; any/all intelligent minds new that ending the peg was inevitable.

So why did the Corporate media (and the bankers) really consider this to be a surprise? Presumably it was because Switzerland’s government made this move without first informing (and asking permission of) the One Bank. How do we know the banking crime syndicate did not give Switzerland’s government prior permission to end its currency-peg? Because of the “reaction” in our totally corrupt/manipulated “markets”.

What did the 30% rise in value of the Swiss franc shout out (to any who understood that reaction)? “The euro is worthless.” As the One Bank engages in its paper-currency Ponzi-scheme with Western currencies;all of the West’s currencies are already effectively worthless (thanks to two decades of “competitive devaluation”).

This is why we now pay as much for a pound of vegetables as we used to pay for a pound of steak, and why many people now have to take out a second mortgage if they want to provide a “steak dinner” for their family. The pound of steak (or vegetables) hasn’t gotten “more valuable”, it’s simply that our governments (and the bankers pulling their strings) have destroyed the value of our currencies. In fact; if the One Bank was not constantly manipulating Western currencies higher (with its serial currency manipulation) the Western world would have already been plunged into hyperinflation.

Had the One Bank known of what Switzerland’s government was planning; it would have used its primary tool for market-manipulation (its Master Trading Algorithm) to greatly reduce the size of the franc’s jump in value, and thus the “shout” that the euro is worthless (along with the West’s other paper) would have been turned into a whisper.

Giving away all our wealth to the ultra-wealthyGiving away all of our jobs to Asia (with their “free trade”).Giving away the goods we still produce at pennies on the dollarBurying our nations under astronomical mountains of debt. Totally destroying the value of our currencies with their “competitive devaluation”.

There is literally nothing which our Traitor Governments could do to destroy our economies which they are not doing already. Unfortunately, as with all acts of suicide; it is inevitable that eventually the Traitors will “accomplish” their goal.

This article is brought to you courtesy of Jeff Nielson From Bullion Bulls Canada.


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