The Big Reset: The US And Switzerland?
The fact that the Swiss Central Bank recently decided to decouple from the euro, was a surprise to say the least. In a time where everyone is trying to weaken their currency, Switzerland and the US are seemingly aiming for the opposite. Are both countries up to something? Is there going to be some sort of a Big Reset?
The currency wars have been going on for years, but in these past few months things really started heating up. Central banks across the world are trying to devalue their currency to stimulate export into their respective countries.
Switzerland and the US do not fit that description. The dollar has been on the rise since the summer and it does not look like it is going to stop. The Swiss Franc surged this week against all other currencies and even by about 30% versus the euro at a given point.
There May Be A Strategy Behind The Big Reset
We all know that the current monetary system is broken (which is why we invest in gold). We have changed monetary systems 3 times already in the last 100 years across the globe so it is not that big of an exception. In a new system they will probably start comparing so you can’t really do much with a weak currency.
The International Monetary Fund is asking for more explanation from the Swiss. In general the IMF is considered to be a US stronghold, but there is a lot of political and monetary pressure from China to take up the yuan in the so-called Special Drawing Rights. This would make the US dollar a lot less influential.
It is possible that the US wants to underline its position with a strong currency and it could be that the Swiss understood the message. The race for the weakest currency might be a race for the weakest link, because a strong economy does not need a weak currency and a strong currency gives you a great position when new monetary systems are negotiated – the Big Reset is what they call it.
Disclosure: None
Very good article and may be straight to the heart of what is going on. Clearly commodity hoarding is not the way to go to insulate yourself from economic grief. Sadly the US and China have both done this with the US hoarding oil and China hoarding steel, copper, etc. This has led not to an oversupply but to massive over production that will have an even worse effect than low prices.
Likewise, the Swiss are loathe to get themselves caught in a currency aching to dive into the QE trap Japan and increasingly the US are caught up in. It zombifies your economy and so far, there is no way out. Even though people say there is an ugly way out, cutting it off completely which would be political and economic suicide, it is just speculation. No one has yet done it even when the effects of QE become as unsustainable and looks as ugly as it does in Japan.
Clearly, things must change now that the US in engaging in socialist planned economy ploys like QE and asset price manipulation. It is a sad day in capitalism.