Previous post Next post

Is the SNB prepared for the black swan ?

Will the SNB printing policy lead to inflation and a housing bust when Germany leaves the Euro ?

Recently the voices for a German euro exit have become louder and louder. The most recent voice comes from Biderman , the FT says that the rise of German Bunds holds the secret how the eurozone crisis will be solved. Michael Auerback shows the anatomies of a bank run from PIIGS to Germany, an anticipation of the break up. CNN asks if Germany could save the euro zone by leaving it. Prices of German Bunds are rising and rising. Hedge funds were betting on a German euro exit. Even some politicians that showed bad practices seem to have a lightening insight. Last but not least there are even central bankers  and money managers for which a German euro exit is a solution. The Swiss National Bank (SNB) has answered in the press conference after its June meeting that the part of euro-denominated government bonds consists essentially of core euro bonds of "very high quality". Already in September the FAZ assumed that the SNB investment risk profile allows only AAA euro government bonds. With the downgrade of France the choice is getting very limited. Except some recent moves into Dutch, Austrian and French short-term notes this means that the SNB essentially holds German Bunds. We will try to show in the following if and how the SNB is preparing for the worst, namely a German euro exit, which could cause a Swiss inflation spike due to a sudden rise of imported German products and the bust of the Swiss real estate market due to inflation and a global turmoil. The calculation will be coming soon. Full story here Are you the author?
George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.
Previous post See more for 1) SNB and CHF Next post
Tags: ,,,,,,,

Permanent link to this article:

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This site uses Akismet to reduce spam. Learn how your comment data is processed.