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Strategies & Market Trends : ahhaha's ahs

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To: Elsewhere who wrote (19374)	9/6/2011 4:36:19 PM
From: ahhaha	Read Replies (1) of 24758

Major mistake : The Swiss central bank imposed a ceiling on the franc for the first time in more than three decades and pledged to defend the target with the “utmost determination,” prompting a record drop in the currency. The Swiss National Bank is “aiming for a substantial and sustained weakening of the franc,” the Zurich-based bank said in an e-mailed statement today. “With immediate effect, it will no longer tolerate a euro-franc exchange rate below the minimum rate of 1.20 francs” and “is prepared to buy foreign currency in unlimited quantities.” The Sweiz wants to throw good money down the sewer for nothing. Why? No one alive or dead can provide an answer. The franc plunged the most ever against the euro after the SNB announced the measure last introduced in 1978 to stem gains versus the Deutsche mark. While the central bank in August boosted liquidity to the money market and lowered borrowing costs to zero to protect the economy, investor concern that governments may struggle to contain Europe’s worsening debt crisis continued to push the currency higher. Apparently Europeans consider the franc safer than the euro. There's nothing that Sweiz CB can do about that. So they're going to Geithner it. They're going to throw money away. Better idea : have a barbecue and burn the francs. “The SNB has committed itself to creating unlimited amounts of francs and selling them versus the euro to defend the currency’s level,” said Fabian Heller, an economist at Credit Suisse Group AG in Zurich. ?? An incredibly stupid, ill-informed, comment to make. Maybe the guy is trying to apply reverse psychology. “They will follow through on their commitment as otherwise their credibility would be clearly damaged and speculation would start again, most likely leading to renewed franc gains.” An incredible series of irrational contradictions. Credibility is achieved by creating unlimited amounts of francs? And that credibility or lack of, will be damaged? Speculation would start again? It hasn't started at all. A move into a perceived stronger currency isn't necessarily speculative. Such moves happen in currencies world wide daily. How is a strong franc bad? Because it undermines exports? The guy has no clue about trade. Trade isn't meaningfully affected by paper shuffling but by efficiencies of output. When will these amateurs learn that efficiencies are only conveniently represented by currency conversion rate changes? Answer: no time soon(They need punishment)..

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