Thursday, January 15, 2015


That's the symbol for the Swiss Franc.  That's all one saw today.  Out of the blue the central bank removed the peg set to the Euro which had bee set at !.20 to the Euro.  The latter traded down 33% in a moment.  Oddly I was up early and when I turned on the tube all I could think of was the day Nixon took us off the gold standard.  It was chaos then; I can't imagine what it was like this morning.  Usually the rumors start immediately as to up is on the wrong side of the trade (there will be a few) but today has been relatively silent which is good.

This action puts us into an entirely different world, adding currency markets (which are the largest by the by) to the list of great unknowns, catastrophes, and disasters facing the world today.  I caught one guy on the tube saying with a shocked expression; "The Swiss just acted in their own interest without a thought!"  Well, DUH!  What the hell do you expect them to do, keep buy junk as they had for 3 years? How much has that cost them?  The other thing is the Swiss don't really like anybody; oh, they will do business with whatever comes along but buddy, buddy like?  Nah.  The Russians are about the only ones who like the Swiss.  The Swiss treat them like crap, only slightly worse than anyone else, but waaaay better than anyone else treats them.  So they go there; great digs, wonderful food, beautiful scenery, gorgeous women from all over and not a word spoken as to where they got their money which of course is why they they keep it there.  And on a day like this when the Swiss do the Swiss thing their money, openly stolen and even more carefully hided grows like Topsy if their attitude was, "bugger the return I just want it safe and quiet."  And it was.  Happy New Year Oligarchs!  It was a great day.

Of course for the rest of us, especially the Euros, it wasn't so great.  The almost complete interpretation of the the future of the events of today is that this forces the hand of Mario Draghi and on January 22, "whatever it Takes" has to be put on the table and convincingly argued that it is enough.  It will not be of course as Quantative Easing in the fix in which Europe finds itself will not do a thing.  Didn't Over Here; didn't in Japan, didn't in the U.K.  Poor Mario is in such a box that he may actually run for the President of Italy now that Napolitano has quit...a job that was probably thought up on the second rung of hell some years back.  As for the Germans?  They always liked the Swiss.  A lot of them even claimed they were Swiss in '46, but of course that has passed.  They'll just keep exporting their little hearts out now with a way weaker currency...of course there are a lot few buyers out there, but they'll find a way.  Deutschland uber alles...and the allies just get madder and madder.

More tomorrow.

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