Wednesday, June 15, 2005


Swiss Central Bank Sells Billions In Gold

Bloomberg reports a disturbing developement for holders of Swiss Francs. "The Zurich-based central bank is engaged in some other highly unusual activities that have made it a sort of profit center for the national and cantonal Swiss governments."

"First, earlier this year it completed the sale of 1,300 tons of gold worth about $16.5 billion at current exchange rates. The proceeds, equal to about 4.7 percent of GDP, are being distributed to the various governments."

"The Swiss economic outlook clouded by weak growth in Germany to the north and recession in Italy to the south."

"After laws were changed to lift restrictions on what assets the bank could hold, the bank 'took the opportunity to enhance its risk/return profile,' it said in its 2004 annual report. 'Its portfolio continued to focus on the most liquid currencies and markets and on borrowers with the highest credit ratings. The investment universe was expanded to include foreign corporate bonds.'"

"This year that universe was expanded again to include foreign equities as well as bonds, to raise the bank's profits further and boost the distributions to governments within the country."

Oh... my... lord!!!

Can now tell my wife that we do not need to look for a bank there.
I was just looking into buying gold and swiss francs as an alternative currency (as suggested in "Conquer the Crash". ) NOW WHAT???
The greatest geo-political coup in the past 25 years was NOT the surrender of the Soviet Union and it's tacit acceptance of dismemberment. Instead it was the ending of account secrecy in Switzerland combined with the failure of a referendum there that would have limited immigration.

The 'New World Order' crowd thus crushed the only independant Capital in the world.

Recall the joke told of an economic conference before the fall of the Soviet Union --- a Marxist economist says "We wish Communism to triumph over all the world - except for New Zealand".

"Why New Zealand?" a Western economist asks?

"Because prices have to be set SOMEWHERE!" The Marxist replies.

Just so here - with Switzerland gone as the sole remaining 'market setter' for currencies the only currencies left in the world are fiat! And the means of establishing the relationships between them are subject to the political forces that can be brought to bear by the favored nations and elites.

Recall also that under WTO rules signatory members have to pledge NOT to back their currencies with Gold!

We are truly going into uncharted waters!
I haven't given up on the SF, but I am watching it much more closely.
so, what exactly is the best way to invest in gold, though Kitco or someone else?
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