Speak, Switzerland!

In the United States, if we hold a referendum, so voters may speak directly and decisively on a question, it always is at the state level, and, lately, most often addresses the legality of gay marriage, the decriminalization of marijuana, getting tough on illegal immigrants, or some other grave matter.
You never will guess what the Swiss, by giving more than 100,000 signatures in support of a Swiss People’s Party referendum, will be deciding in a nationwide vote on November 30. They will vote on whether or not the Swiss National Bank (the equivalent of the U. S. Federal Reserve) should be prohibited from selling its precious metals, including gold; should be required to hold at least 20 percent of its foreign reserves in gold; and should hold its gold within the country.
Can you imagine a more gnomish matter? It seems that just 10 years ago, the Swiss National Bank (SNB) had the highest per capita gold holdings in the world. And the Swiss liked it that way. But, taking advantage of a time when the world economy was calm and prosperity comfortable, Switzerland in a national referendum in 1999 authorized the bank to sell 50 percent of its gold reserves. Through 2008, the bank sold hundreds of tons of gold – always too cheaply, because the price of gold kept climbing.

This post was published at FinancialSense on 10/21/2014.