Category Archive: 1) SNB and CHF

Will SNB FX Investments Yield Enough Until U.S. Inflation Starts?

Will the SNB be able to survive an upturn in inflation: We focus on income and yields for foreign exchange position and gold and find out if the SNB makes enough income to survive a franc appreciation.

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When FX wars become negative interest wars

Beat Siegenthaler, FX strategist at UBS, has been wondering about what the Swiss National Bank may do if the ECB’s measures to weaken the euro begin to test its 1.20 EURCHF floor. He notes, for example, that there has already been a marked divergence...

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Swiss Franc and Swiss Economy: The Overview Questions

Before the upcoming SNB monetary policy assessment meeting on June 19th, rumors started the SNB could follow the ECB and set negative rates on banks' excess reserves. We would like to deliver the whole background, starting with the question why Swiss inflation has been so low in the past and why CHF always appreciated.

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The Swiss Franc, Pseudo-Mathematics and Financial Charlatanism



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SNB Results Q2/2014: Draghi’s Weak Euro Policy, a Nice Gift for the SNB, for Now

The ECB commitment to a weak euro and the maintenance of ultra-low interest rates, was a nice (temporary) gift for the Swiss National Bank (SNB). The bank earned nearly 12 billion francs in Q2/2014.

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Swiss Franc History, 2000-2007: The sale of the Swiss gold reserves

A critical Swiss Franc History: Between 2000 and 2007, the SNB made the Swiss cantons happy and delivered some billions of francs to prop up their finances. The gains were unfortunately not caused by strong asset management capabilities, but mostly due to gold price improvements and gold sales at quite cheap prices.

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Swiss Franc History, from 2004 to 2009: The undervalued franc

A Critical History of the Swiss Franc: During the "global carry trade" period between 2004 and 2007, the euro strongly appreciated against the Swiss franc. Most astonishingly this happened, despite the fact that the Swiss GDP growth was on average 0.5% higher

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Swiss Franc History: Weak German and Swiss growth between 1996 and 2004

A critical Swiss Franc History: Between 1996 and 2004 Switzerland and its main trading partner and FX proxy Germany saw slower growth compared to other European countries. We explain the reasons

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Swiss Franc History 1986-1996: Swiss real estate Boom and Bust

A critical Swiss franc history: This chapter describes the most controversial episode in the Swiss monetary history: How the Swiss National Bank helped to wreck the Swiss real estate market in the 1990s.

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Swiss Franc History: Volcker Shock, Oil Glut and the Breakdown of Gold and Emerging Markets

After the Volcker moment or sometimes called "Volcker shock", commodity prices plunged, the gold price collapsed. Thanks to additional supply, e.g. from Northsea oil, a so-called oil glut appeared. After the increase of debt in the 1970s, some economies in Southern America collapsed. The major reason was Volcker's tight monetary policy with high interest rates and the dependency on US funds.

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Volckers Attack on Stagflation

In this chapter we describe how Volcker managed to defeat stagflation; he applied the monetarist models that had been applied successfully in Switzerland and Germany. Thanks to this effort, the dollar stopped its secular decline.

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Swiss Franc History, 1970s: Due to US Stagflation CHF Strengthens Massively

We shows the massive appreciation of Swiss franc and German mark in the 1970s, the reasons were: stagflation and the wage-price spiral.

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Swiss Franc History: Volcker’s defeat of inflation strengthens dollar, weakens Swiss franc



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Swiss Franc History: From Bretton Woods until the Swiss real estate crisis



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Swiss Franc History: The long-term view and the comparison with gold

We establish a long-term view and history of the Swiss franc. We compare the franc with gold.

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Research on SNB & CHF



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Private markets, public investors: The march of the sovereigns

SOVEREIGN wealth funds, typically set up by oil-exporting nations, have been around for decades, in the case of Kuwait since 1953. But their influence has increased in recent years, as China has adopted a similar strategy for investing some of its vast foreign-exchange reserves while existing funds have been fuelled by gains from high oil prices.

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Buttonwood: Land of the falling yield

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SNB Follows ECB? Pictet’s Negative SNB Interest Call

Pictet calls for negative interest rates in Switzerland in order to maintain rate differentials between the euro zone and Switzerland. Maintaining rate differentials would be useful for FX speculators and for money market funds that still invest in the euro zone.

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Swiss Franc, Pseudo-Mathematics And Financial Charlatanism: Extended Version

We have published the extended version of “The Swiss Franc, Pseudo-Mathematics And Financial Charlatanism” on the investor site Seeking Alpha. The version is longer than the one published previously.

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