Gyroscopic Investing

Okay, PP'ers, what do you think about this insane idea of the Swiss government being required to hold 20% of its assets in gold?

http://bigstory.ap.org/article/59282b3b ... uying-plan

25% would be better.Hope they get it done...

From the polls it appears unlikely to pass - largely because it would break the "Euro peg" as the Swiss Franc has been pegged to the Euro the last few years.  If the Swiss bank can't freely print currency they won't be able to maintain the peg and the Franc will rise quickly, hurting exports.  The central bank has been aggressively attacking the plan.

Not surprisingly there has been more demand for Franc's than Euro's ever since the 2008 crash.  A yes vote on the referendum would make the Franc a gold backed currency (especially compared to the Euro, where many banks are now offering negative interest rates!).  This would cause even more Europeans to move into Francs.

Personally I like the idea, and I think it makes real sense for Switzerland - a country that traditionally has been a safe haven for money, but currently it looks like it is unlikely to pass.

I certainly hope it passes. BTW, I know one person who is voting for it, although of course that doesn't mean much.

invst65 wrote: Okay, PP'ers, what do you think about this insane idea of the Swiss government being required to hold 20% of its assets in gold?

http://bigstory.ap.org/article/59282b3b ... uying-plan

There's already been a thread started on this by Benko:

http://gyroscopicinvesting.com/forum/ot ... #msg106993

As most predicted, it failed .....

https://ca.news.yahoo.com/swiss-voters- ... iness.html

It failed, thank God. Everyone was fixating on the requirement to hold 20% of the central banks reserves in gold. But they ignored the killer clause. The referendum prohibited the central bank from ever selling any of its gold. That's insane. When you start with 20% in gold, but can never sell any, that means that overtime you are going to wind up with gold constituting more and more of your reserves with no ability to do anything with it.

It was an idiotic proposal, as anyone except the most fanatical gold bugs could see. I would have voted against it first thing in the morning and twice after lunch.

Gold is trading 3.3% lower on the news. Another beating on the way...

buddtholomew wrote: Gold is trading 3.3% lower on the news. Another beating on the way...

...or not!

Ad Orientem wrote: It failed, thank God. Everyone was fixating on the requirement to hold 20% of the central banks reserves in gold. But they ignored the killer clause. The referendum prohibited the central bank from ever selling any of its gold. That's insane. When you start with 20% in gold, but can never sell any, that means that overtime you are going to wind up with gold constituting more and more of your reserves with no ability to do anything with it.

It was an idiotic proposal, as anyone except the most fanatical gold bugs could see. I would have voted against it first thing in the morning and twice after lunch.

I guess I must be a fanatical gold bug then, since I think it was an excellent proposal that would catapult the Swiss franc back to the forefront of currency reform.

Pointedstick wrote:

buddtholomew wrote: Gold is trading 3.3% lower on the news. Another beating on the way...

...or not!

I looked at Kitco last night and the live trade was 1150, down 3.3%. It seems this included the 2.65% loss we incurred on Friday. I was pleasantly surprised to see the turnaround in the precious metal when I woke up this morning.

buddtholomew wrote:

Pointedstick wrote:

buddtholomew wrote: Gold is trading 3.3% lower on the news. Another beating on the way...

...or not!

I looked at Kitco last night and the live trade was 1150, down 3.3%. It seems this included the 2.65% loss we incurred on Friday. I was pleasantly surprised to see the turnaround in the precious metal when I woke up this morning.

Yeah, their quotes usually don't make much sense on holidays; they can't seem to decide what the change is supposed to be relative to.

Libertarian666 wrote: I guess I must be a fanatical gold bug then, since I think it was an excellent proposal that would catapult the Swiss franc back to the forefront of currency reform.

The referendum would have done no such thing.  You're reading way too much in it as a gold bugger.  The fact is, any forefront of currency reform will be happening in the direction of techno crypto-currency, not gold.  Gold has NEVER worked because politicians always debase it.  Getting money out of the hands of politicians is the answer.

Budd, you seem so much more rational on up days!

Reub wrote: Budd, you seem so much more rational on up days!

Is it rational on up days or completely irrational on down days?

MachineGhost wrote:

Libertarian666 wrote: I guess I must be a fanatical gold bug then, since I think it was an excellent proposal that would catapult the Swiss franc back to the forefront of currency reform.

The referendum would have done no such thing.  You're reading way too much in it as a gold bugger.  The fact is, any forefront of currency reform will be happening in the direction of techno crypto-currency, not gold.  Gold has NEVER worked because politicians always debase it.  Getting money out of the hands of politicians is the answer.

I agree that getting money out of the hands of politicians is the answer.
Gold is the only currency that has no central bank, and therefore cannot be debased.
Hope that helps.

Libertarian666 wrote: I agree that getting money out of the hands of politicians is the answer.
Gold is the only currency that has no central bank, and therefore cannot be debased.
Hope that helps.

Rubbish.  History disagrees with you.

MachineGhost wrote:

Libertarian666 wrote: I agree that getting money out of the hands of politicians is the answer.
Gold is the only currency that has no central bank, and therefore cannot be debased.
Hope that helps.

Rubbish.  History disagrees with you.

Then it should be easy for you to provide an example or two of times when gold was debased.

Libertarian666 wrote: Then it should be easy for you to provide an example or two of times when gold was debased.

Here's a good starting point: https://en.wikipedia.org/wiki/Aureus

Obviously it is not possible to debase gold itself, but it is eminently possible to debase gold-based currencies: by introducing cheaper metal into gold coins or decreasing their size while keeping the face value the same; by reducing the gold reserve for gold-backed paper notes; by declaring by fiat that gold-backed paper notes are suddenly worth fewer ounces of gold; by abandoning the whole thing entirely! All of these thing have happened numerous times before.

MachineGhost wrote:

Libertarian666 wrote: Then it should be easy for you to provide an example or two of times when gold was debased.

Here's a good starting point: https://en.wikipedia.org/wiki/Aureus

That is not an example of gold being debased, but of a government changing the amount of gold in a coin without changing the denomination or "legal value" of the coin.

Of course it is impossible to debase gold, so your attempt to back up your claim that it can be debased is in vain.

Why not just admit you were wrong? I've been wrong on several occasions myself.

Libertarian666 wrote: Gold is the only currency that has no central bank, and therefore cannot be debased.

I vote for Bitcoin :-)
Just like gold it's worth whatever people make it worth. Bitcoin is easier to move around though.

Libertarian666 wrote: Of course it is impossible to debase gold, so your attempt to back up your claim that it can be debased is in vain.

Why not just admit you were wrong? I've been wrong on several occasions myself.

Excuse me, I meant gold "currency" which is the exact term that you used.  Now you're changing the semantics to "gold" itself which is a non-sequitor.  So I'm wrong?  Whatever.

MachineGhost wrote:

Libertarian666 wrote: Of course it is impossible to debase gold, so your attempt to back up your claim that it can be debased is in vain.

Why not just admit you were wrong? I've been wrong on several occasions myself.

Excuse me, I meant gold "currency" which is the exact term that you used.  Now you're changing the semantics to "gold" itself which is a non-sequitor.  So I'm wrong?  Whatever.

What I said is this:

"Gold is the only currency that has no central bank, and therefore cannot be debased."
I still don't see anything wrong with that.

However, if you want me to change it to this, it's okay with me:
"Gold is the only money that has no central bank, and therefore cannot be debased."