03/29/2017 - Yra Harris: The Swiss Central Bank Is Performing Financial Alchemy, Printing Money To Buy Real Assets
“SNB President Thomas Jordan regularly opines that is Swiss currency is overvalued. The SWISS bank reserves are not increasing because of robust Swiss exports. However, the SNB regularly turns on the printing presses to produce Swiss francs to sell and purchase other currencies in an effort to meet the insatiable demand for the Swiss foreign currency. Currently, SNB foreign reserve holdings are equivalent to the entire GDP of the Swiss economy. The SWISS FRANC represents the fragility of the global financial and political system as investors are willing buy Swiss assets with negative yields out to over TEN years. The Swiss are doing nothing more than printing more SWISS FRANCS to meet the demand. When they use the fiat francs to purchase other currencies the SNB converts those currencies into EQUITY AND BOND assets in a symphony of some of the most high-quality worldwide corporations. THIS IS FINANCIAL ALCHEMY OF THE HIGHEST ORDER. The SNB owns almost $2 billion of APPLE Corporation .. No wonder the Swiss are so happy. They are laughing as the world keeps willing to swap its banknotes for real assets, helping Swiss citizens become the world’s largest hedge fund .. The SNB has discovered the PHILOSOPHER’S STONE and lo and behold it is a printing press. The VIX may represent investor complacency but the SNB’s attempts at financial alchemy represent something else. Not sure as of yet but if I were a Swiss national I would be voting for the SNB to be increasing its GOLD RESERVES.”
“The SNB reinforces my point and what reader Asherz wrote last night in the blog post: The Swiss are running the largest hedge fund in world and they can’t hedge because it would only put upward pressure on the Swiss franc. So the SNB needs to begin purchasing a basket of commodities, especially large amounts of GOLD as the ultimate hedge against global financial uncertainty. Just imagine the political uproar in Switzerland if global equity markets depreciated over the next five years. It’s alchemy at its finest.”
