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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: Taikun who wrote (56932)12/5/2004 2:28:41 AM
From: Elroy Jetson  Read Replies (1) of 74559
 
Let me answer your question with an excerpt from my previous post.

In many ways it's easier to understand Switzerland as an exclusive private club rather than a typical nation.

Both wages and prices are high in Switzerland. The population is adamantly opposed to free-trade which would disrupt their internal economy. This is the primary reason they gave a resounding "NO" to membership in the European Common Market.

As a consequence food, books and many other items are produced locally at prices far above those of the world market. This system is stable and the Swiss see no reason to follow the rest of the world toward globalization internally, even though their corporations are a major participant in globalization, at least of ownership, outside Switzerland.

One example I found in the past few days was calendars - which typically sell for about $10. I want a Swiss calendar for 2005, but at $35 they're costly.

As a consequence of this dual-system, many people pontificate from afar about the supposedly non-competitive cost structure of Swiss business. This reflects a lack of understanding of the real nature of Swiss businesses. Their export earning corporations are headquartered and controlled from Switzerland but the majority of their "cost structure" is located in each customer nation.

If the Swiss Franc were to increase in value ten-fold, the earnings of these Swiss companies would decline when valued in Swiss Francs but the soundness of their business would remain unaffected.
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