The Swiss Gold Initiative

152
Sat, Aug 23, 2014 - 12:23pm

When we first wrote about this, we actually caused a bit of a stir but the primary vote on The Swiss Gold Initiative was still over six months away. Now, with the date of the vote rapidly approaching, it is time to begin reviving this issue.

Interest is beginning to build, awareness is growing and the date of the national referendum has been set. Later this year, on November 30, the good people of Switzerland will finally get an opportunity to make their voices heard. The Swiss Gold Initiative can be roughly stated in three parts:

  1. The halting of all Swiss gold sales
  2. The repatriation of all Swiss gold that is held in foreign vaults
  3. Resume backing the Swiss Franc with gold, at a minimum level of 20%

Of course, the politicians and bankers of Switzerland are squarely against this initiative as it greatly diminishes their hold on power and restricts their ability to continue to debase the Franc. Fortunately, as one of the world's few remaining democracies, the Swiss people have an opportunity on November 30 to directly affect a change. For their sake and for the sake of their posterity, I pray that they choose wisely.

As this issue comes to the forefront this autumn, you will need to be aware of the circumstances surrounding the vote. So, below you will find a few background links and, ultimately, a re-print of the seminal article that we first posted here back on May 12. Please take the time to review this information. We must do everything we can to help warn and educate the good people of Switzerland before the vote is taken.

First, here are two bits of background from earlier this year. From former US Budget Director David Stockman we have this: https://davidstockmanscontracorner.com/switzerlands-keynesian-bureaucrat...

And from the FinancialSense website, we have this interview of Luzi Stamm, who is one of the Swiss parliamentarians behind the initiative: https://www.financialsense.com/contributors/luzi-stamm/swiss-gold-initia...

Last week, Swiss money manager Egon von Greyerz brought the issue back to our attention and I urge you to take a moment to read this brief commentary: https://goldswitzerland.com/swiss-to-vote-on-gold-repatriation-in-novemb...

Finally, here's the link to the article we first posted back in May. If you are Swiss or personally know any Swiss citizens, please consider forwarding this link. It is imperative that we do everything possible to see that this initiative passes, not just for the good people of Switzerland but for freedom, liberty and sound money advocates everywhere. https://www.tfmetalsreport.com/blog/5731/turdville-love-open-letter-good...

TF

"From Turdville With Love; An open letter to the good people of Switzerland"

I hate to be the bearer of bad news, Switzerland, but what you suspected all along is actually true. Your gold is gone. All of it. Leased and sold away by your central bankers and politicians.

As recently as 1996, the Swiss Franc was considered "good as gold". Why was this the case? Since the early 20th century, the Swiss Franc had offered a reserve backing of gold. This uniquely sound currency had given the country of Switzerland considerable financial power and independence, yet, at the urging of their politicians and central bankers, the Swiss willingly forfeited this enviable position.

The demise of the Franc and Swiss sovereignty began in 1992 when the Swiss made the fateful decision to join the International Monetary Fund (IMF). The IMF's Articles of Agreement (Article IV, Sec 2b) clearly state that no member country can have a currency linked to gold and, as such, Switzerland immediately set out on a course to de-link the Franc from gold. Just four short years later, the Swiss National Bank (SNB) and the Swiss government had formed a plan to eliminate the Franc's gold backing and, in March of 1997, a revision of the Nationalbank Act was passed and all links of gold to the Franc were removed. Further, since the Swiss constitution mandated sound money, it had to be amended, too. Thus, in a hastily organized vote, a new Swiss constitution was approved in May of 2000. (https://www.efd.admin.ch/dokumentation/medieninformationen/archiv/00382/...) This served to finally and permanently sever the Franc's gold backing and initiated the Swiss into the world of global fiat currency.

The SNB has spent the 14 years since leasing and re-leasing the country's gold reserves. In 1999, the SNB reported gold reserves of 2,590 metric tonnes. The most current "audit" of SNB reserves showed just 1,040 metric tonnes of gold remaining on the balance sheet and I believe that none of this is actual, physical gold. Instead, what the SNB holds are paper claims and promissory notes. The remaining 1,040 tonnes has been sold and re-sold into the marketplace by greedy bullion banks, intent upon suppressing price through the leverage of paper metal futures contracts and rehypothecation. In other words, the "gold" that the SNB claims to hold/own on behalf of the Swiss people is gone. This makes the Swiss people just another bagholder, certain to be left in line wanting with all of the other holders of unallocated accounts when the fractional reserve bullion banking system inevitably collapses.

Furthermore, I've come to the conclusion that it was this last bit of Swiss gold that was utilized to suppress and manipulate price away from the alltime highs of September 2011. What makes me think this? Let's start with a history lesson...

Again, the Swiss officially forfeited their birthright of national independence and sovereignty when they joined the IMF in 1992. Then, by formally de-linking the Franc from gold in 2000, they accepted full membership into the clique of fiat currencies. Regardless, and perhaps just by tradition, the Swiss Franc was still considered a "safe haven" currency as late as 2011. But that's when things got out of hand.

You recall 2011, don't you? Under the weight of $600B worth of QE2, the U.S. Dollar Index was collapsing. From a high near 90 in mid-2010, it had fallen to near 73 by the spring of 2011. Shortly thereafter, the U.S. fiscal situation began to wobble as "Debt Ceiling" negotiations took place in Washington and the U.S. credit rating was downgraded by Standard & Poor's. The ensuing political rancor drove gold from $1500 to $1900 in eight weeks. Also catching a bid in this "safe haven" trade was the Swiss Franc and, in the summer of 2011, it also rallied over 20%.

"We can't have this!", screamed the Swiss Keynesians. "Something must be done or our export-driven economy will suffer", they warned. So what happened next? The SNB went ALL IN.

In the wee hours of Tuesday, September 6, 2011, the SNB announced a permanent and horrific change to the Swiss currency. Henceforth, the Franc would be linked/pegged to the Euro. No more safe haven bid. No more national sovereignty. Going forward, the Swiss were all in. Their fortunes had been officially tied to the fortunes of the European Union, for better or for worse. At this point, there was no further reason to hold any gold in reserve. Why would the Swiss need it? Their currency was now officially fiat and it's value was permanently pegged to another fiat, the Euro. What purpose would gold serve going forward? As the Keynesians say, it had become "a barbarous relic".

Left as the sole remaining "safe haven", one would have expected a huge rally in gold on 9/6/11, likely moving price up and through $2000/ounce from the weekend close near $1920. Instead, with the same counter-intuitive move to which we've all grown accustomed in the time since, gold was raided and price was smashed. Here are some flashback c&ps for you. First two charts from 9/6/11 and 9/7/11 showing the unusual price action:

And, as you might imagine, I was actively chronicling these events on this site. Here's a sample from Wednesday, Sept 7:

"I think it's quite clear now why gold responded yesterday in the opposite direction from what you would have expected. With central banks actively managing a debasement of their currencies, we are now seeing them also attempt to actively manage a debasement of gold, too. Be careful. Be very careful.

We all wondered yesterday why gold would plunge on the SNB news. Now we know. In an attempt to mitigate the "negative" effect on francs priced in gold, the SNB sold a massive amount of gold futures at the same time. How do we know this, because it appears that the same thing earlier today.

Yes, that's 7,000 contracts (700,000 ounces) (nearly 22 metric tons!) dumped on the Globex while London and NY are closed! This should also raise your deja vu spidey senses regarding silver in May. The $ drop in silver was greater because the silver market is considerably smaller. However, it's the same strategy. Maximize the downward impact and collateral damage by executing the attack at a time of minimal liquidity. This all wreaks of malicious manipulation. If you are trading, be prepared for anything."

And there you have it. Speculated upon at the time and again here in this post: The SNB is the culprit. It was the remaining SNB gold that was leased and dumped onto the market in late 2011, shoving price back from the record highs and smashing gold for nearly 0 in a little over three weeks. What was left of the Swiss gold was then leased to bullion banks throughout 2012 and the first half of 2013. Physical demand only increased, however, and that remaining Swiss gold has now been delivered to China and points East. Yes, the SNB still shows this leased gold on their balances sheet as an asset. Most every other western Central Bank utilizes the same accounting gimmick. Instead, it should be listed as a liability as the actual, physical underlying is no longer there. It is...gone for good.

Sensing this, a movement has begun in Switzerland to reclaim their sovereignty and birthright. The Swiss People's Party (SVP), which was the only major party voting against the new Constitution back in 2000, began an initiative last year to re-enforce a gold backing to the Franc. After collecting more than the requisite 100,000 signatures, a national referendum on the issue is planned. First, however, a vote was held last week in Swiss parliament. This procedural vote is basically a "recommendation" from Parliament, designed to impact the eventual, national vote. Here's how Bloomberg described it in an article dated May 5:

SWITZERLAND (BLOOMBERG) - >

Swiss parliamentarians urged rejection of a popular initiative that would curtail the Swiss National Bank’s independence by requiring it to hold a fixed portion of its assets in gold.

Members of the Swiss parliament’s lower house voted 129 to 20 with 25 abstentions today against the plan, which demands that at least 20 percent of the central bank’s assets be in gold. It would also disallow the sale of any such holdings and require all SNB gold be held in Switzerland.

No date for a national vote has yet been set. The government in November also recommended the initiative be opposed, saying it would impinge upon the SNB’s ability to conduct monetary policy. Parliament and the multi-party government issue recommendations on all national referendums as a matter of procedure.

Of course! How could anyone, in their right mind, be in favor of this:

  1. Demanding that at least 20% of your central bank assets be in gold
  2. Disallowing any sale of said gold
  3. Require repatriation of all foreign-held gold

Don't you silly peasants know what's good for you? By making these demands, you "impinge on your central bank's ability to conduct monetary policy" and "curtail the SNB's independence"!

Then, check this out, also from the same Bloomberg story. Last year, even Thomas Jordan, the head of the SNB, got in on the act:

"SNB President Thomas Jordan took the extraordinary step of commenting on politics last year when he urged rejection of the initiative, saying it would crimp the Zurich-based institution’s independence and force it into “large-scale” purchases to meet the required 20 percent threshold."

Hmmm. "Large-scale purchases", just to get back to the 20% threshold? Well, that's interesting, now isn't it? And what about this repatriation requirement? Why should that be a big deal? The SNB currently provides this list of its gold storage:

  • 70% (728 mts) of the gold is already held in Switzerland
  • 20% (208 mts) is held at The Bank of England
  • and 10% (104 mts) is held at The Bank of Canada

I can't speak for the 104 metric tonnes held in Canada but the Swiss people should be very nervous about the gold the SNB allegedly stores in London (https://www.tfmetalsreport.com/podcast/5678/empty-vaults-london). Also, the SNB has been reticent to discuss where in Switzerland their gold is stored. Could this be because the "gold" is stored with the Bank of International Settlements for easy distribution and leasing? And where is the BIS? It's in Basel, of course. And where is Basel? It's in Switzerland!! How about that??

Look, I'll cut the chase here to save some time. Here's the "open letter":

To the good people of Switzerland:

You have been scammed and sold down the river. Your politicians and bankers, in a pathetic attempt to consolidate power and curry favor with the EU, have given away your independence and your historic sovereignty. You should be angry.

The initiative you have taken and the referendum you have planned are all well and good. I applaud you for taking these steps within the context of Swiss law and tradition. However, you must understand what is truly at stake and if you don't take more powerful and forceful acts soon, the likelihood of you ever regaining your birthright as an independent, sovereign nation is slim.

The next steps you undertake must include these:

  • Demand an immediate and full, independent audit of the SNB gold reserves. This is your gold, not the SNB's, and you should be allowed a full accounting.
  • All Swiss gold that is held domestically must be held in Swiss-owned bank vaults, not at the BIS.
  • Demand an immediate repatriation of all foreign-held gold. Do not accept excuses regarding "logistics". Give the BoE and the BoC no more than 90 days to return your gold.
  • Immediately de-peg the Franc from the Euro and divest yourself of all accumulated Euro holdings. Ignore the Keynesian shills who would have you believe that a strong currency is bad for economic growth.
  • Use the process of divesting yourself of the Euro to accumulate and rebuild your gold reserves. Then, use these reserves to once again partially back your currency.

The world is rapidly changing and tomorrow will not be like yesterday. The current global financial system, based upon promises, debt and unlimited fiat currency will one day soon by replaced by a system that returns the world to a sound money platform. The monetary powers of the 21st Century will come to the forefront by virtue of their accumulated reserves of sound money, not by their addiction to easy money.

You, Switzerland, still have time to act and prepare but you must move quickly. The possibility exists for you to reverse course and demand change but time is short. The end of the great Keynesian experiment is upon us. Reclaim your gold and your sovereignty now or be forever consigned to the trash heap of fiat currency history.

Faithfully submitted with all sincerity,

TF

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  152 Comments

  Refresh
Dr. P. Metals
Aug 24, 2014 - 3:06pm
alan2102
Aug 24, 2014 - 3:05pm

Don Harrold

Don Harrold is buying silver again, FYI.

Some may recall that Don was about the only silverbug who was in early (early 2000s), started selling in increments in the 20s as the price was rising, and got the crash of 2011 right -- or as right as anyone could get it, being that everything is uncertain and no one has perfect predictive power. See this from those heady days when silver was in the mid-40s and rising: https://www.youtube.com/watch?v=sJ5I9m4Yhns

Dr. P. Metals
Aug 24, 2014 - 2:57pm

OT but relevant in a weird way

https://dailyreckoning.com/beware-the-return-of-the-modern-debtors-prison/

see stats on Ferguson, Missouri. Interesting, I didn't see any of that covered in the news. Related in a weird way: daft, theft and lies are EVERYWHERE bar NONE!

if the swissies or others praising the swissies think that their banksters/elites wouldn't steal their very last cent if possible, they are very much mistaken.

Bongo Jim
Aug 24, 2014 - 1:54pm

Nevermind the Bollocks...

Where are the Sex Pistols???

InsAndArts
Aug 24, 2014 - 1:43pm

A Swiss Annuity Story For Twenty Somethings

Many years ago, before the internet. Before cell phones. We lived in darkness.

Maybe 1985, I was interested in Swiss Annuity contracts.

They only returned 3% but because the Franc was then backed by gold ( and always seemed it would be) The return was like 8% when measured against the US dollar.

I didn't know what The Fed was. I didn't understand the black magic of fractionalized reserve 'banking', gold suppression...it was truly the dark ages. I believed that inflation was being 'fought' as a boogyman by something called "The Fed"

But I knew one thing at the time: the value of the green paper I was working for was always diminishing. Somehow it always leaked away. So did everyone else's for that matter.

(I had bought gold on instinct, but my resolve to hold it was not strong because I lacked an intellectual framework to give my decisions context and conviction. The bottom in 2000 just seemed to bolster the anti gold bias in the mainstream media)

So a Swiss Franc Ann contract seemed like an effective savings vehicle. I was probably making about 25K in the mid 1980's. Very hard earned money. I wanted to preserve it's value.

Prolog: I never bought the contract. Talk about frustration! Can you imagine the emotional roller coaster:

1. )Buy-in ( Gold backed Franc " I'm safe at last ")

2.)Cash Out ( "F. you mther fkrs...selling the gold! Dammit ! Penalities! Fk you!")

***

So.

3. )Buy another annuity contract backed in Swiss Francs in 2015?

I'm sure one can, but why?

Why would one do that? Because the Swiss decide to create a fiat note backed in gold again? Sheesh! Life isn't long enough for all this nonsense!

I'm sure some annuity company will be doing just that.

I will state something that should be obvious to us all:

There is no security in gold backed fiat currency.

"The situation speaks for itself." ( I forget the latin )

Any gold that is present is not used to 'back' the fiat per se.

Not hardly my friends.

The gold portion is inserted into the currency presented so that they can 'sell' the paper fiat notes. To promote acceptance. It's a gold veneer of sorts. There is a material difference between a fiat note partially 'backed' in PM and a 'Silver/Gold Certificate' which allowed the bearer to exchange the note for metal at a tellers window.

If you want security just buy and hold physical.

I have to laugh ( A sardonic smile now that I have so little money these days)

I suppose we've come full circle. But we should all be smart enough to get off the merry go round.

I just wanted to send this out as a kind of cautionary story to the younger people here ( I have no kids ) Things change in life, sometimes very quickly, and almost always as a means to extract value from you. Learn from history.

BagOfGold
Aug 24, 2014 - 12:57pm

Bollocks is around

I just corresponded with him last week when he bought himself some time in The Vault. I'm sure you'll be seeing him soon.

-SilverIsMoney-
Aug 24, 2014 - 12:36pm

What a vote does...

Is put pressure on these people to do the right thing. If they do nothing/delay the inevitable that in itself speaks volumes.

Sometimes the goal is not to have one event become the snowflake but instead just keep putting pressure on these people until they accidently create the snowflake.

Unintended consequences are the downfall of every tyrannical plan throughout all of history. Tyrants simply do not have the imagination to envision all of the future problems that will come with their solutions. The Swiss people rising up and demanding their gold back would be a clear cut case of this.

Just like the Scottish Independence vote may not be the THEE snowflake but it's all about building blocks and pushing these issues further and further until something does break.

If people just give in now because they don't see any point in winning over one smaller issue then we'll never win anything bigger than that...

“If you will not fight for right when you can easily win without blood shed;
if you will not fight when your victory is sure and not too costly; you may
come to the moment when you will have to fight with all the odds against you and only a precarious chance of survival. There may even be a worse case. You may have to fight when there is no hope of victory, because it is better to perish than to live as slaves.” - Winston Churchill

BagOfGoldbenque
Aug 24, 2014 - 12:21pm

Bollocks...please come back!!!...

Player - Baby Come Back

Bag Of Gold

Dr. P. Metals
Aug 24, 2014 - 12:20pm

RE: "Your gold is gone. All of it."

and....what is a simple "vote" going to do to this situation?

Don't get me wrong, i'm all for returning to fair money. I just think this is all smoke and mirrors. One day however, ONE of these "events" will be "the" snowflake. Just not this one. In saying that, I hope i'm wrong also LOL

SS121
Aug 24, 2014 - 11:58am

Swiss Bankers back in the day...

It is sad but not surprising to hear that the Swiss banks had been infested throughout the 18/1900's, as they still are today.

From TF's excellent letter to the folks: I hate to be the bearer of bad news, Switzerland, but what you suspected all along is actually true. Your gold is gone. All of it. Leased and sold away by your central bankers and politicians.

'central bankers'... 'money-changers'... those sneaky little vagabonds have been weaseling their way into banks and treasuries long before the 1800's.

Will an official vote and Swiss gold solution be implemented? Likely no, but TF's excellent letter frames the situation in the perfect light, "hey Swiss people, you're just as screwed by those Central Bankers who own the "system", as the rest of us"

...just seeing the hopelessness of their national situation should help many make the transition from Swiss victim to Swiss Stacker. And it really does help to hear the same thing from different people, perspectives, or even continents.

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