Currency Balloon Madness

Today’s headline from GoldCore:

     Market Chaos as Swiss Franc Surges 30% In 13 Minutes, Gold Rises Sharply

Historians will not look kindly on the financial titans and politicians of this period. They’ll have little trouble understanding the deceptions, but one wonders how they will account for the derangement. As some blame lead in the water for the demise of the Roman Empire, they’ll probably blame it on pharmaceuticals in our water supply, or electromagnetic pollution, or maybe, using the same data set cited here in Your daily dose of poison, they’ll blame it on a pesticide:

     MIT Researcher’s New Warning: At Today’s Rate, Half Of All U.S. Children Will Be Autistic By 2025

But let’s get back to a major world currency, the Swiss Franc, rising 30% in 13 minutes. As pointed out in Currency Balloons, it is best for one’s financial health if they don’t say, “The Franc rose 30% in value in 13 minutes,” but instead say, “The Franc rose 30% in price in 13 minutes.” The concept of value has–for anyone who is not thinking clearly and carefully about it–been distorted beyond all recognition in this world where currency units are tethered to nothing real and Trillions of them can be conjured up (or lost!) with a few keystrokes.

So what happened with the Swiss Franc? Lots of Europeans, foreseeing the inevitable bankruptcy of Eurozone governments, were trading their Euros for Swiss Francs, driving up the price of the Swiss Franc relative to Euros. The Swiss central bank didn’t like this because, whenever a currency rises in price these days, the corporations in the country don’t like it because their products appear more expensive when they export them. So the Swiss central bank printed and spent hundreds of billions of Swiss Francs and sold them to buy Euros to artificially peg the price of the Franc to the price of the Euro.

But they ran into a problem. The price of the Euro has been, let’s put it nicely, diminishing, losing 16% versus the US Dollar in the last several months. So all of their Euro positions keep losing money. So despite saying just last week that they would keep pegging the Franc to the Euro, that they would print unlimited amounts of Swiss Francs to keep going, today they announced that they wouldn’t, that they were throwing in the towel. (By the way, with all currency resets, this has always been the case–they lie about their intentions right up to the last minute. You will never get an advance warning from the authorities about anything like this. You must make decisions about such things in advance on your own; or live with their decisions, which benefit them, not you.)

Such is the world of paper/electronic debt currencies these days, intimations of their inevitable demise. Very few people think through what is happening here. Why do people value money? Because they believe that they, or their descendants, can use it to acquire something real. But what does it mean when those in power (governments and banks) can conjure as much of this “money” as they see fit, Trillions at a time? All who end up with that currency believe that they can use it to acquire what is real.

But emergencies show the reality. When an earthquake or a storm hits, within hours or even minutes, store shelves are empty; what is real is gone, there’s none to be had. Then people realize that what is real is what has value: real actions, real goods, real knowledge; and that the concepts of price and currency-denominated wealth are increasingly unreliable in our money-mad world.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s