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Switzerland Unpegs itself from Euro

Started by Mind Flayer Monk, January 25, 2015, 07:07:43 PM

The Swiss Franc is on the rise.


QuoteNow, in Switzerland, we have a demonstration of just some of the risks that might emerge were a surplus country to leave the euro zone.
In September 2011, Switzerland pegged its currency to the euro to set a ceiling to the Swiss franc's rapid appreciation in the wake of the global financial crisis that erupted in 2008.
...

Though the initiative to require a fixed share of gold reserves failed, the prospect of large-scale quantitative easing by the European Central Bank, together with the euro's recent slide against the dollar, intensified the political pressure to abandon the peg.

http://www.straitstimes.com/news/opinion/more-opinion-stories/story/the-fat-tail-the-swiss-shock-20150120


QuoteSwitzerland will probably remain in deflation. But the SNB should not be lambasted for removing the cap. Rather, it should be criticised for adopting it in the first place. When central banks try to manipulate exchange rates, it almost always ends in tears.

http://www.economist.com/blogs/economist-explains/2015/01/economist-explains-13

Zoo

Well hopefully other follow.. I would love to see the Euro die!!1


Eddie Coyle

Quote from: Zoo on January 25, 2015, 07:42:45 PM
Well hopefully other follow.. I would love to see the Euro die!!1

   Bellgab's John Kenneth Galbraith with his usual perspicacity. We need his insights into the austerity programs of Greece.

Zoo

Quote from: Eddie Coyle on January 25, 2015, 08:27:18 PM
   Bellgab's John Kenneth Galbraith with his usual perspicacity. We need his insights into the austerity programs of Greece.


Well we can replace that currency with some other currency but in the end it is a Fiat based currency. Maybe instead of trying the same thing over and over maybe just maybe we evolve from this. No Fiat Currency has ever lasted in history. But shit what do I know lets just keep doing the same bullshit over and over and expect it to change. I will be on top of a hill waiting for it to all fall apart again. Until the world can evolve without worshiping make believe money/currency we are doomed to repeat history over and over!!1

WOTR

I saw this right before I left and was looking at it with some interest.  It did seem to come as a shock and watching the traders and even brokerages scramble and fail was kind of fun.  If you are going to play with currency trading you had best have the reserves in case something goes south.


It really does make sense from a Swiss perspective.  How long do you really want to keep your currency at an arbitrary and artificial rate in relation to other currencies? 


I suppose my favourite part of the story was how quickly they did this with no real warning.

Fiat or not, every currency, be it the Swiss franc, dollar, euro, groat, tulip, pancake  (happy or otherwise), and even gold is worth exactly what the market decides it's worth at any given moment. 

Zoo

Quote from: Robert Ghostwolf's Ghost on January 27, 2015, 03:07:46 AM
Fiat or not, every currency, be it the Swiss franc, dollar, euro, groat, tulip, pancake  (happy or otherwise), and even gold is worth exactly what the market decides it's worth at any given moment. 


I agree it is all make believe and we as citizens of the world keep putting faith in it. How dumb are we!!1

Kelt

Switzerland has never been serious about joining a European Currency anyway. They temporarily pegged the Swiss Franc to the Euro while it suited them, and now it doesn't they don't.


They've mountains of NAZI gold the size of which you rarely see outside of a Disney cartoon where Scrooge McDuck is swimming in his vault. Switzerland doesn't need to join the Euro Kitty, and if it did it would probably have a difficult time accounting for where they got all the bars of gold bearing the Swastika and Imperial Eagle, should the Eurozone members demand an audit.



Quote from: Kelt on January 28, 2015, 12:51:28 AM
Switzerland has never been serious about joining a European Currency anyway. They temporarily pegged the Swiss Franc to the Euro while it suited them, and now it doesn't they don't.


They've mountains of NAZI gold the size of which you rarely see outside of a Disney cartoon where Scrooge McDuck is swimming in his vault. Switzerland doesn't need to join the Euro Kitty, and if it did it would probably have a difficult time accounting for where they got all the bars of gold bearing the Swastika and Imperial Eagle, should the Eurozone members demand an audit.


You don't think they would resmelt it like we did with all the gold the Japanese looted from China and India?

albrecht

Quote from: Kelt on January 28, 2015, 12:51:28 AM
Switzerland has never been serious about joining a European Currency anyway. They temporarily pegged the Swiss Franc to the Euro while it suited them, and now it doesn't they don't.


They've mountains of NAZI gold the size of which you rarely see outside of a Disney cartoon where Scrooge McDuck is swimming in his vault. Switzerland doesn't need to join the Euro Kitty, and if it did it would probably have a difficult time accounting for where they got all the bars of gold bearing the Swastika and Imperial Eagle, should the Eurozone members demand an audit.



Why would Swiss want to peg their currency to the EURO, or especially even join the EU, with all the financial problems EU countries are having? Why would they want to give up their sovereignty, tradition of democracy and localization, high-standard of living, and clean country to foreign, often unelected, judges and bureaucrats in Brussels, Strasbourg, and Luxembourg? Cede their laws, monetary policy, and immigration policies to foreign entities and bureaucrats like other European countries have done?

Yorkshire pud

Quote from: albrecht on January 28, 2015, 11:07:46 AM
Why would Swiss want to peg their currency to the EURO,




The Swiss are not lovey dovey people. They aligned (as Kelt said) the SF to the Euro because at the time, it was expedient to do so. Now it isn't, they've unaligned. They have no desire to join the EU, in fact their neutrality is a mutual benefit to all.

Kelt

Quote from: albrecht on January 28, 2015, 11:07:46 AM
Why would Swiss want to peg their currency to the EURO, or especially even join the EU, with all the financial problems EU countries are having? Why would they want to give up their sovereignty, tradition of democracy and localization, high-standard of living, and clean country to foreign, often unelected, judges and bureaucrats in Brussels, Strasbourg, and Luxembourg? Cede their laws, monetary policy, and immigration policies to foreign entities and bureaucrats like other European countries have done?


They don't want to join the Euro or the EU.... that's the point I was making.


I think you also attach too much illusory power to Brussels. No country has ever given up its sovereignty to the EU, no country has ever given up Democracy to join the EU, I've no idea what you mean by 'localization'. As for standard of living, being part of the EU has entitled member states to bail-outs and economic benefits, there's no mandate that says an 'unelected judge' can pass a law on a member state, I'm not sure what laws have been ceded (perhaps you can list them), and immigration policies work universally, meaning any citizen of any member state has equal rights to travel and work within the Federation.


What you've detailed seems to be a bit of a fictionalised perception.




albrecht

Quote from: Kelt on January 28, 2015, 01:56:40 PM

They don't want to join the Euro or the EU.... that's the point I was making.


I think you also attach too much illusory power to Brussels. No country has ever given up its sovereignty to the EU, no country has ever given up Democracy to join the EU, I've no idea what you mean by 'localization'. As for standard of living, being part of the EU has entitled member states to bail-outs and economic benefits, there's no mandate that says an 'unelected judge' can pass a law on a member state, I'm not sure what laws have been ceded (perhaps you can list them), and immigration policies work universally, meaning any citizen of any member state has equal rights to travel and work within the Federation.


What you've detailed seems to be a bit of a fictionalised perception.
A number things have been ceded to the EU, European Central Bank, ECHR, ECJ, Council of Europe (depending on the country, their date of joining, if they adopted the Euro, etc.) Which is all fine and well IF the people agree to it and really understood what they were getting into. Banking policy and monetary policy, immigration policy (free movement, immigration, citizenship, refugees), down to things like proper "bend" for bananas (Regulation (EC) 2257/94 - finally scrapped when it made tabloids), stupid things like not allowed to sell pints in Britain (unless labelled in ml and with the CE (Conformité Européenne) instead of the Crown (this seems like it should be a rumor but, really, who knows with these guys- I think they abandoned the effort) etc....the fiscal policies are more of a concern these days, especially in some countries like Greece.

Switzerland a nice combination of direct democracy (referendums and initiatives), representational democracy (parliament,) and strong local protection in Council of States(federalism) and then down to their Cantons (states) and local system (town meeting). Also paper-ballots and hand-counting for the national elections (some local have tried to go internet voting even.)

Kelt

Well, if you join a centralised currency such as the Euro then you're going to be giving up your own currency, though not reserves, so I don't think that's really a point of interest. Member states have the choice to join the Euro or not.   


As for the 'banana' thing, this is of course an exaggeration, and a distortion, of the facts, as perpetuated in particular by anti-EU media sources. There are many 'Euromyths' in existence, though.



You mentioned countries surrendering sovereignty and Democracy, though... I'm going to press you on examples of countries giving control of their national government to Brussels, and which countries within the EU are no longer Democratic as a result of joining the EU.



albrecht

Quote from: Kelt on January 28, 2015, 03:20:24 PM
Well, if you join a centralised currency such as the Euro then you're going to be giving up your own currency, though not reserves, so I don't think that's really a point of interest. Member states have the choice to join the Euro or not.   


As for the 'banana' thing, this is of course an exaggeration, and a distortion, of the facts, as perpetuated in particular by anti-EU media sources. There are many 'Euromyths' in existence, though.



You mentioned countries surrendering sovereignty and Democracy, though... I'm going to press you on examples of countries giving control of their national government to Brussels, and which countries within the EU are no longer Democratic as a result of joining the EU.
If you, or your elected representatives, don't control your borders, your monetary policy, your currency, your citizenship requirements, your regulations, your courts, your immigration policy, etc than you don't have sovereignty- or democracy. Though, I guess, in theory you can vote to give them away to someone else. But, of course, when you do vote "non", like on the EU Constitution, you still get Lisbon. They will lobby, give away money and perks, and make the voters (when allowed) or countries to vote again until "they get it right." (cue Ireland here.) And, if you are a big enough country you get to "opt-out" (at least for a time) of some provisions- very, very "democratic!"

Kelt

Quote from: albrecht on January 28, 2015, 03:41:41 PM
If you, or your elected representatives, don't control your borders, your monetary policy, your currency, your citizenship requirements, your regulations, your courts, your immigration policy, etc than you don't have sovereignty- or democracy. Though, I guess, in theory you can vote to give them away to someone else. But, of course, when you do vote "non", like on the EU Constitution, you still get Lisbon. They will lobby, give away money and perks, and make the voters (when allowed) or countries to vote again until "they get it right." (cue Ireland here.) And, if you are a big enough country you get to "opt-out" (at least for a time) of some provisions- very, very "democratic!"


You seem to be labouring under the erroneous assumption that ultimate executive power lies with the European Federal government as it does in the United States.  You are incorrect. 


The EU itself is a [/font][/size]legal personality[/font][/size] and a set of governing institutions empowered by the treaties. However sovereignty is not invested in those institutions, it is [/font][/size]pooled[/font][/u][/size] with ultimate sovereignty resting with the national governments. Yet in those areas where the EU has been granted competencies, it does have the power to pass binding and direct laws upon its members.[/font][/size] [/color][/font][/size]

[/font][/size]
These 'competencies' relate to Union-wide trade, labour, and commercial agreements, and monetary decisions for those who have elected to join the EU currency,  agreed upon by member states. These labour policies are universal, meaning any citizen of any member state is free to travel and work within the Uinion as a member of that Union. You may as well bitch about someone from New York taking a job in Texas.  [/font][/size]


You still haven't cited an instance of any EU member giving up Democracy or Sovereignty, I still await this information.  That would be a pretty major piece of news, and I must have missed it, but if you can point me to those states which are no longer Democratic entities, where the elected government is no longer in charge of its own people, or no longer has the right to simply remove itself from the EU then I'd really have to see that information before taking your claim as anything but hyperbole.


Which member states have given up their Democratic and electoral rights? 


Which member state has given up the freedom to detach from the EU if it chooses?








albrecht

Quote from: Kelt on January 28, 2015, 04:36:09 PM

You seem to be labouring under the erroneous assumption that ultimate executive power lies with the European Federal government as it does in the United States.  You are incorrect. 


The EU itself is a [/font]legal personality[/font] and a set of governing institutions empowered by the treaties. However sovereignty is not invested in those institutions, it is [/font]pooled[/font] with ultimate sovereignty resting with the national governments. Yet in those areas where the EU has been granted competencies, it does have the power to pass binding and direct laws upon its members.[/font][/color][/font]
[/font]
These 'competencies' relate to Union-wide trade, labour, and commercial agreements, and monetary decisions for those who have elected to join the EU currency,  agreed upon by member states. These labour policies are universal, meaning any citizen of any member state is free to travel and work within the Uinion as a member of that Union. You may as well bitch about someone from New York taking a job in Texas.  [/font]


You still haven't cited an instance of any EU member giving up Democracy or Sovereignty, I still await this information.  That would be a pretty major piece of news, and I must have missed it, but if you can point me to those states which are no longer Democratic entities, where the elected government is no longer in charge of its own people, or no longer has the right to simply remove itself from the EU then I'd really have to see that information before taking your claim as anything but hyperbole.


Which member states have given up their Democratic and electoral rights? 


Which member state has given up the freedom to detach from the EU if it chooses?
Whoever said I said "executive power?" But anytime you cannot protect your own border, cannot set monetary policy, and have to abide by judicial, regulatory, (or legislative) decisions often made by foreigners, often unelected, you are losing more and more democratic control.  Even in a "democracy" the further away the source of authority the less your vote matters and less autonomy or control you have over your affairs. It is always a trade-off, of course. But the EU has been done in a not aboard-board process of give-aways, false promises, frequent re-votes (when people are actually allowed to vote), allowing big countries to get special "opt-outs," and agreements. Since when was a simply steel and coal agreement, then a tax-harmonization agreement, etc meant to grow to what the EU is now? And when voters reject....simply vote again Ireland(1)  or we will cram it down your throats another way via a treaty. We will see what, ultimately, comes of it with the Greek (and other) situations but smart countries, like Norway, Switzerland, Iceland were/are smart to avoid the quagmire in the first place. Smart idea to try to stabilize Europe, bad idea to integrate too much and free movement, bad idea to bring in countries too early, and one will see if a 5th Reich rises allowing Germany to assume command....(Kidding on the last part.)
ps: I stand by my statements also with regard to the so-called "free trade agreements", SPP, TTP, WTO, etc pushed especially by Republicans and Democrats. We shouldn't give up our laws, rights, or regulations to be judged by some international tribunal or bunch of mediators and judges. We have to be very careful when considering such decisions- no "fast track" certainly and much public and open debate. And realize that we might not be always "running the show" and such treaties can come back to bite us.

Kelt

Are you trying to suggest that sovereign power isn't ultimate executive power over one's nation or state?


Because... it is.


Any time you....


Incorrect.


Not "any time you"


Member states of the EU are free to leave the EU.  They can, and do, overrule direction and law from Brussels.


Take Greece as an example. Just voted in a left wing government. Concerns right now are that they might move closer to Russia, politically if not geographically. If the Democratically elected Greek government (because, remember, despite what you seem to believe, you don't have to give up democracy or sovereignty to join the EU) [size=78%]were to say, "We're leaving the EU, ditching the Euro, and forming a pact with Russia" then they can... because ultimate executive power remains with the member states. [/size]



To wit: (From the Economist)


AS MY last posting noted, the first edgy thing which the new Greek government did was to downgrade, albeit very politely, its relations with the church. The second thing was to upgrade a relationship whose historic roots are at least partly religious, with Russia. On his first day in office, prime minister Alexis Tsipras met the Russian ambassador, and then distanced Greece from an EU statement which protested over Russian actions in Ukraine and threatened further sanctions. He then named a foreign minister, Nikos Kotzias, who enjoys [/font][/size]cordial relations[/color][/font] with the religious-nationalist segment of the Russian elite.[/font][/size]

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