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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (56779)	1/18/2015 3:20:53 AM
From: sense	Read Replies (1) \| Respond to of 71400

"Someone must have tipped the Swiss the Euro is going to Hell and the Swiss decided to cut the cord not to be tied up to the sinking Euro ship... Only that can explain the risks the Swiss are taking" I agree that what I've seen in others analysis seems... incomplete. There are only three things that might explain it. One is the standard answer that the Swiss Central Bank is run by a neophyte in over his head... and he got caught posturing without the firepower to back up his policy, long term... and was forced to realize both that the plan wasn't capable of working... and that it was costing way too much. The other is the routine in considering it yet another among many in the skirmishes in the currency wars... Your answer... considers that we should look less at policy as a driver, and more at the element of this probably constituting "a trade" based on the development of some new awareness... other than "can't get there from here" in the policy they'd been claiming they'd defend, come hell or high water. Since they did quit defending that policy... it makes a lot of sense to ask which it was that came (or, is coming)... Was it hell... or high water ? Perhaps the change didn't result from a "tip"... rather than analysis determining "we can't get there from here" ? But, then, why implement the sudden and radical shift, in the way they did, from a policy decision that they'd reinforced just last week ? Why didn't they tell the other central bankers what they were doing... at least coincident with the act ? I agree with yours... that it looks like "something" tipped the scales... and it probably wasn't about business as usual in currencies, or banking... but, neither would Greek politics be a driver requiring anything like that sort of precipitate action ? So, perhaps, it's not all and only about the Euro, exactly... rather than some other thing ? I agree again that the nature and scale of the risks taken, to be rational, would have to be expected to work in addressing concerns opposed to some other comparable or larger risk... So, what ELSE might be lurking out there ? Or, what other impact of the policy change made would tend to explain it... if you knew what it was that was driving them to act ? If we were again backing into realizing a replay of financial system risks like those of 2008... what would be the impact on your (Swiss) banks of having been spending piles of money on defending a fixed peg to the Euro ? If the risk being addressed... weren't about the economics of trade and currency exchange... but were more about fundamental issues like bank solvency... what difference would it make to have your national currency, either more, or less... tied to some other currency, with its own, separate risks ? Otherwise, you're left asking... if the nature of the action was intended to exacerbate already well known pre-existing weaknesses... perhaps forcing others into realizing some currency derivative risks ? Why might the Swiss... want to try to "trip" someone... even at the risk of destabilizing the financial system ? If you think of it as "a deliberate trade"... it opens up all kinds of conspiracy theory potential ? FWIW, I bet it wasn't the Swiss banks who were short the Swiss currency...

To: elmatador who wrote (56779)	1/18/2015 9:58:59 AM
From: philv	Read Replies (4) \| Respond to of 71400

What are the chances of the Swiss Franc backing down in the next short while? Obviously they wanted to limit the upside by going massively into negative interest rates on deposits. This brings up some questions. Are negative interest rates more desirable than an expanding (debt) balance sheet? What is the best value for the Swiss Franc visa vie the Euro? If the Euro falls, will they increase again the negative int. rate to say -1% or more? Who would deposit money at such negative int. rates? What if the ECB decides against more money printing?