Topic: Does SNB see something that we don't know? - page 2. (Read 2497 times)
It's a clear fact that they can't continue to peg francs on euro or else this will have negative on their economy. Euro is dropping for sure and there might be indications that ecb will move towards QE just like what the fed has done in the past. In order to maintain at the 1.20 level, snb need to intervene. It's either need to buy euro which logically you don't buy a currency that will drop in value or print more francs to devalue their own currency, which is also equally bad.
Oh, I am diversified. It's just that a collapse of the euro will hurt badly significant part of my wealth. It won't destroy it all, but it will be very painful. My home currency is pegged to the euro, thus my direct income and a large part of my assets are essentially euro-denominated. Plus, it is really unknowable how an euro collapse would affect my other assets. Presumably, some will go up (gold, USD), at least relative to the euro-denominated assets, but a major financial dislocation of the markets usually has bizarre unforeseeable consequences.
How could you pay back 8x more debt without your income increase by 8x?
This isn't debt, it is inflation. They didn't print CHF in order to buy government bonds (like the Fed does); they printed CHF in order to buy EUR and maintain the peg.
Since this week the ECB is expected to start some major printing, the SNB was worried that the value of their EUR holdings would plummet (which it did anyway - by about 25%), so they decided to stop digging themselves even deeper in the hole.
What it probably means is the beginning of the collapse of the euro and maybe of the EU. Sucks, really, since much of my wealth is tied up in euro-denominated assets. Not all, of course, but it will still hurt me badly.
How could you pay back 8x more debt without your income increase by 8x?
This isn't debt, it is inflation. They didn't print CHF in order to buy government bonds (like the Fed does); they printed CHF in order to buy EUR and maintain the peg.
Since this week the ECB is expected to start some major printing, the SNB was worried that the value of their EUR holdings would plummet (which it did anyway - by about 25%), so they decided to stop digging themselves even deeper in the hole.
What it probably means is the beginning of the collapse of the euro and maybe of the EU. Sucks, really, since much of my wealth is tied up in euro-denominated assets. Not all, of course, but it will still hurt me badly.
What does this mean for Bitcoin?
SNB surprisingly removed the currency peg with Euro without any formal information or indication. This is a very strange move that never happened in major developed countries. It seems that they have totally lost control of their pace and don't care about causing shocks in financial markets. It might be a decision made in panic, since it is nothing comparing with something very gigantic that is approaching
This chart shows that the current fiat money system works totally different since 2008
Base money supply increased by 8 fold without any significant increase in GDP. This scale of money supply used to be in M1 (which is only checkbook numbers in banks database. e.g. virtual wealth by just count the same money multiple times), but now it is in M0, with a large amount of debt backing. How could you pay back 8x more debt without your income increase by 8x?
Maybe they are already seeing the total collapse of the debt bubble and want to quit the money printing game first
This chart shows that the current fiat money system works totally different since 2008
Base money supply increased by 8 fold without any significant increase in GDP. This scale of money supply used to be in M1 (which is only checkbook numbers in banks database. e.g. virtual wealth by just count the same money multiple times), but now it is in M0, with a large amount of debt backing. How could you pay back 8x more debt without your income increase by 8x?
Maybe they are already seeing the total collapse of the debt bubble and want to quit the money printing game first
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