Swiss gold supporters suffers setback in referendum

Swiss gold supporters suffers setback in referendum

December 2, 2014 0 By WFTV

Gold versus currencies...the currencies won in Switzerland vote, keeping gold prices at bay!

Gold versus currencies…the currencies won in Switzerland vote, keeping gold prices at bay!

A referendum for an increase in gold as reserves in Switzerland, which could have pushed gold prices up, saw some 78% voted against expanding central bank gold reserves to 20% of central bank assets from the current 7%.
The vote is a blow to the movement to “Save Our Swiss Gold” that had the hopes of moving Switzerland back toward a gold standard which the country left in 1999.
But it was welcomed by the authorities, as they state a yes would have hindered Switzerland’s monetary policies.
The ‘Save our Swiss gold’ initiative is a public initiative in Switzerland, which was put forward through a motion for the Swiss government to give back to gold its forlorn role as the ‘stored currency’ in the country’s reserves.
The proponents of the motion wanted to increase gold holdings to 20% of reserves. Up until a few years ago, 16% of Switzerland’s reserves were held in gold. Now, nearly half is made up of dodgy Euros – or fiat money!
Ahead of the gold vote, Swiss National Bank (SNB) president Thomas Jordan commented that the popular vote on requiring the central bank to keep 20% of its assets in gold would hinder the central bank’s ability to conduct monetary policy. In a statement obtained by the Wall Street Journal, Jordan said that “The initiative is both unnecessary and dangerous”, saying further that “It is unnecessary because, under the current monetary order, there is no link between price stability and the share of gold in the SNB balance sheet.” Jordan also pointed out that Switzerland’s stock of gold is high compared with other central banks and that the SNB has no further plans to sell or purchase gold in the future.
The organizers of the initiative, members of the Swiss People’s Party, say the gold reserve measures were needed because the SNB’s policy of capping the value of the franc has left its balance sheet with a surplus of euros which have been devalued in the wake of the financial crisis. They also have been vocal against the devaluation of the Swiss franc, which is intended to help Swiss exporters and the Swiss economy.
Other nations, particularly the European ones, use gold as part of their own reserves.
President Vladimir Putin in Russia, where a recent IMF report shows that Russia has increased gold holdings for the seventh month in a row this year, is pushing for gold reserves rather than bank notes, in the wake of the anti-Moscow sanctions and the collapse of the Rouble.
Central banks are increasingly getting back in touch with gold.
For Russia, it’s a matter of trust, that is, they don’t trust the USA and its dollar reserve system, said an analyst.
In the same way, Swiss citizens are losing faith in the Eurozone and its currency.
In recent times, the markets have been dominated by the establishment, the banks, central banks and the whole gold-ambivalent political regimes, said the analyst.
“But it’s extremely difficult to destroy faith in something as indomitable as gold. The people ultimately have their say… and as leaders trash paper currencies left, right and centre, the popular voice finds a way of expressing itself,” he said.