Fog Of War

I think this man must be worried. He has a huge weight on his shoulders. This is Thomas Jordan, the head of the Swiss National Bank.

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Mr. Jordan has excellent academic credentials.  He’s a scholar, and a ‘lifer’ at the SNB:

University of Berne, PHD Economics

Department of Economics at Harvard University,three-year post-doctoral research.

1997 SNB Economic Advisor in Department 1.

On 18 April 2012, appointed Chairman of the Governing Board of the SNB.

 Unfortunately, Mr. Jordan’s academic prowess is not going to be of much help with the mess now on his desk. He needs to learn how to play – and win – heads up guts poker. In my experience that’s a skill one is born with, or never acquires.

Jordan is a General who has a war on his hands. It’s a currency war; only financial blood will flow. But the stakes are high. Mr Jordon understands that more than the Swiss economy is at risk. The idea of the “All Powerful Central Bank” is being called into question. General Jordon is on the front lines of a conflict that could spread throughout Europe, and then to Japan.

Thomas Jordon has enormous power. He can print a biblical amount of money with a keystroke. He’s pledged to do exactly that. But, Jordan also has some significant strategic weaknesses:

- Jordan has no allies in this war.

* The US Treasury has put the SNB on its watch list of ‘currency manipulators’. Don’t look to the US Fed to get involved in this fight.

* The Japanese could care less about the Swiss war – they’re trying to wage their own war.

* The SNB has no friends at the ECB either. If anything, Mario Draghi is working against the SNB.

- Jordon inherited the Swiss Franc peg policy. He came in when Hildebrand was thrown out. For the first time in his tenure he’s being called to fire his guns in anger. He’s an academic, not a warrior.

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