• Tag Archives Switzerland
  • Jim Grant: “Markets Trust Too Much In The Presence Of Central Banks”

    James Grant, Wall Street expert and editor of the renowned investment newsletter Grant’s Interest Rate Observer, warns of the unseen consequences of super low interest rate and questions the extraordinary actions of the Swiss National Bank.
    Nearly ten years after the financial crisis, extraordinary monetary policy has become the norm.
    The financial markets seem to like it: Stocks are close to record levels and the global economy is finally picking up. Nonetheless, James Grant sees no reason to sound the all-clear signal. The sharp thinking and highly regarded editor of the iconic Wall Street newsletter Grant’s Interest Rate Observer argues that historically low interest rates are distorting the perception of investors.
    Principally, Mr. Draghi has robbed the marketplace of essential information, he criticizes the head of the European Central Bank for example. Highly proficient in financial history, Mr. Grant also questions the strategy of the Swiss National Bank. He fears that the voluntary depreciation of the Franc undermines the status of Switzerland as a global financial center.

    This post was published at Zero Hedge on Dec 12, 2017.


  • Would A Leveraged Buyout Help Sears Turnaround Its Business?

    Practically since the day he took the reins at Sears, CEO and Chairman Eddie Lampert has been steadily stripping the once mighty retailing behemoth of assets and protecting his hedge fund’s investment as the company continues its steady march toward bankruptcy.
    Any customer with the temerity to visit one of the remaining Sears or K-Mart stores will be greeted with the same depressing vision: Shelves that are mostly vacant of the most popular consumer brands, as many of Sears’ suppliers have become wary of working with the company. Displays are unkempt, and even the selection of appliances that were once Sears’ bread and butter has been dramatically reduced.
    Back in October, Sears Canada announced its plans to liquidate, leaving behind only this video to remind investors and customers just how bad things got before the plug was pulled.
    But despite all of this, Swiss asset manager Memento, a firm that primarily manages assets belonging to Switzerland’s Spadone family, believes the short-selling of Sears’ stock is the most pressing obstacle plaguing the floundering retailer.

    This post was published at Zero Hedge on Dec 7, 2017.


  • Inflation Surges as Economy Bogs Down in Mexico

    Bank of Mexico caught in a vise.
    In the last week, the governor of the Bank of Mexico (or Banxico), Augustin Carstens, stepped down in order to take over the reins as general manager of the Bank for International Settlements in Basil, Switzerland, while Finance Minister Jos Antonio Meade, handed in his resignation to run as the presidential candidate for the governing PRI party in next year’s general elections.
    Despite the fact that the country’s two most senior public financial officials have left their posts within days of one another, and though the Mexican stock index is down about 9% from July, the markets still seem pretty sanguine.
    But that doesn’t mean that problems are not stacking up.
    Earlier this year Carstens felt compelled to postpone by five months his departure from Banxico, which was initially scheduled for May, in the hope that his continued presence would help steady investor nerves as well as tame inflation, which began soaring after the government’s one-off hike in gas prices at the beginning of this year.

    This post was published at Wolf Street on Nov 30, 2017.


  • Sweden: The World’s Biggest Housing Bubble Cracks

    Sweden’s property bubble is probably the world’s biggest, despite which it gets relatively little coverage in the mainstream financial media – although that might be about to change. Warnings about this bubble are not new. In March 2016, Moody’s issued a very explicit warning that Sweden’s negative interest rates were propagating an unsustainable housing bubble.
    The central banks of Switzerland, Denmark and Sweden (all rated Aaa stable) have been among the first to push policy rates into negative territory. A year into this novel experience, Moody’s Investors Service concludes that, from among the three countries, Sweden is most at risk of an – ultimately unsustainable – asset bubble…
    “The Riksbank has not been successful in engineering higher inflation, while Sweden’s GDP growth continues to be among the strongest in the advanced economies,” says Kathrin Muehlbronner, a Senior Vice President at Moody’s.
    “At the same time, the unintended consequences of the ultra-loose monetary policy are becoming increasingly apparent – in the form of rapidly rising house prices and persistently strong growth in mortgage credit”, adds Ms Muehlbronner. In Moody’s view, these trends will likely continue as interest rates will remain low, raising the risk of a house price bubble, with potentially adverse effects on financial stability as and when house prices reverse trends.

    This post was published at Zero Hedge on Nov 15, 2017.


  • Why Switzerland Could Save the World and Protect Your Gold

    – Precious metals advisor Claudio Grass believes Switzerland can serve as an example to rest of world
    – Switzerland popular for gold storage due to understanding of the risks inherent in fiat money and gold’s value as a store of wealth.
    – International investors opt to store gold in Swiss allocated accounts due to tradition of respecting private property.
    – Country respects the importance of gold ownerships and 70% of world’s gold is refined there
    Across Europe many voters and politicians are expressing their dislike at the bureaucratic and overarching approach of the European Union. There are also regions and countries pushing to break ties with others that they have long been associated with. Catalonia is just the most recent example, many in Scotland are also calling for independence.
    It is not an understatement to say that the role and influence of government is currently at the forefront of many citizens’ minds. This is understandable given political upheaval but also thanks to decisions by authorities that are arguably not in the best interests of the electorate. Bail-ins are just one very important example.

    This post was published at Gold Core on November 2, 2017.


  • U.S. Deepwater Offshore Oil Industry Trainwreck Approaching

    The U. S. Deepwater Offshore Oil Industry is a trainwreck in the making. The low oil price continues to sack an industry which was booming just a few short years ago. The days of spending billions of dollars to find and produce some of the most technically challenging deep-water oil deposits may be coming to an end sooner then the market realizes.
    Drilling activity in the Gulf of Mexico hit a peak in 2013 when the price of oil was over $100 a barrel. However, the current number of rigs drilling in the Gulf of Mexico has fallen to only 37% of what it was in 2013. This is undoubtedly bad news for an industry that fetches upward of $600,000 a day for leasing these massive ultra-deepwater rigs.
    One of the largest offshore drilling rig companies in the world is Transocean, headquartered in Switzerland. They lease ultra-deepwater rigs all over the globe. When the industry was still strong in 2014, nearly half of Transocean’s fleet of 27 ultra-deepwater rigs were leased in the Gulf of Mexico. Even though Transocean was quite busy that year, its ultra-deepwater rig utilization was 89% during the first half of 2014, down from an impressive 95% in 1H 2013.
    The term utilization represents the total number of working rigs in the fleet. So, in 2013, Transocean had 95% of its rigs busy drilling oil wells. But if we look at the following chart, we can see the disaster that has taken place at Transocean since the oil price fell by more than 50%:

    This post was published at SRSrocco Report on OCTOBER 25, 2017.


  • A Look Inside The Secret Swiss Bunker Where The Ultra Rich Hide Their Bitcoins

    Somewhere in the mountains near Switzerland’s Lake Lucerne lies a hidden underground vault containing a vast fortune.
    It’s no ordinary vault, according to Quartz. Built inside a decommissioned Swiss military bunker dug into a granite mountain, it’s precise location is a closely guarded secret, and access is limited by myriad security precautions.
    But instead of gold bars, the bunker contains hard drives on which customers’ bitcoins are being kept in what’s call ‘cold storage’ – i.e. the owners’ private keys are protected by an air-gapped hard drive. The vault is one of many operated by Xapo, an early bitcoin company known for its cold storage wallet products and a debit card that pays for transactions in digital currencies.


    This post was published at Zero Hedge on Oct 18, 2017.


  • “We Don’t Know How To Replace The Vast Gold Deposits Of The Past”

    Pierre Lassonde, chairman of Franco-Nevada, expects production in the gold mining sector to decline significantly and foresees a price push for the yellow metal.
    Few people have achieved more success in the mining business than Pierre Lassonde. The savvy Canadian is the co-founder and chairman of Toronto based Franco-Nevada (FNV 99.91 -0.94%) and pioneered the royalty business model in the gold mining sector based on the model used in the oil-and-gas industry. For investors this strategy has paid off golden returns. Today however, Mr. Lassonde points out that the gold industry hasn’t made any large discoveries for years which will put heavy upward pressure on prices in the years to come. He also thinks that US President Donald Trump is good for the yellow metal and that investors will fare better with gold than with stocks.
    ***
    Mr. Lassonde, after a few difficult years gold seems to get its shine back. What’s next for the gold price?
    Right now, there is more demand for paper gold than for physical gold. For instance, when you look at the refineries in Switzerland they will tell you that they’ve got the bouillon but they’re not busy. It’s not like a year and half ago when they had no stock and the gold bars basically were flying off their shelf the minute they were produced. So the pressure is in the paper gold market, the futures market.

    This post was published at Zero Hedge on Oct 16, 2017.


  • Gold Market Charts – September 2017

    Featuring charts produced by the GOLD CHARTS R US market chart website, the BullionStar chart series focuses on a number of the world’s most important physical gold markets including China, Russia, India, Switzerland and the London gold market, and provides background and commentary on the selected charts.
    Shanghai Gold Exchange (SGE) Gold Withdrawals Gold withdrawals from the Shanghai Gold Exchange network of precious metals vaults totalled 161.4 tonnes during August. These withdrawals are in the form of actual physical gold bars and ingots which leave the Exchange’s vaults and enter the downstream investment, jewellery and fabrication markets. Since most gold flowing through the Chinese gold market from the supply side to the demand side is traded through the SGE, this makes SGE Gold Withdrawals a suitable proxy for wholesale gold demand in China. See “Mechanics of the Chinese Domestic Gold Market” for more details.

    This post was published at Bullion Star on 30 Sep 2017.


  • North Korea Said To Seek Help From Republicans “To Figure Out Trump”

    In what may be the most bizarre development of the day, the WaPo reports that in their ongoing feud with President Trump, the North Korean government has quietly sought the help of an unlikely counterparty: Republicans.
    As the WaPo details, officials in Pyongyang have been quietly trying to arrange talks with Republican-linked analysts in Washington, “in an apparent attempt to make sense of President Trump and his confusing messages to Kim Jong Un’s regime.” The outreach is said to have begun before the current eruption of threats between the two leaders, but will likely become only more urgent “as Trump and Kim have descended into name-calling that sharply increases the chances of potentially catastrophic misunderstandings.”
    ‘Their No. 1 concern is Trump. They can’t figure him out,’ a source with direct knowledge of North Korea’s approach to Asia experts with Republican connections told the WaPo.
    While the North Koreans do not appear to be interested in negotiations about their nuclear program, they want forums for insisting on being recognized as a nuclear state, something the Trump administration has made clear it is not interested in. At a multilateral meeting here in Switzerland earlier this month, North Korea’s representatives were adamant about being recognized as a nuclear weapons state and showed no willingness to even talk about denuclearization.

    This post was published at Zero Hedge on Sep 26, 2017.


  • BIS Hunts for ‘Missing’ Global Debt, Inflation (Try Including Housing!)

    This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
    Just like global central banks, the Bank for International Settlements can’t seem to find inflation and $114 trillion in off-balance sheet FX derivatives.
    ZURICH – Nonfinancial companies and other institutions outside of the U. S., excluding banks, may be sitting on as much as $14 trillion in ‘missing debt’ held off their balance sheets through foreign-exchange derivatives, according to research published Sunday by the Bank for International Settlements.
    These transactions, which resemble debt but for accounting purposes aren’t classified that way, aren’t new. Rather, researchers from the BIS – a consortium of central banks based in Basel, Switzerland – used global banking data and surveys to estimate the size of this debt for the first time.
    The implications for financial stability are unclear because FX swaps are backed by cash collateral and can be used to hedge exposure to currency swings, thus promoting stability. Still, the debt ‘has to be repaid when due and this can raise risk,’ the authors wrote.

    This post was published at Wall Street Examiner on September 19, 2017.


  • “It Blows My Mind”: 100-Year Austrian Bond With Record Duration 3x Oversubscribed

    As we reported yesterday, Austria was set to make Eurozone history with the first sale of a 100 year bond direct to public markets, bypassing private syndication. It did that later in the day, when the 3.5 billion offering priced tighter than initially marketed, at RAGB 2/2047 +50, at a price 99.502 to yield a paltry 2.112% and with a negligible 2.1% cash coupon.
    What is even more notable is that despite mounting fears of an imminent tapering by the ECB which many have predicted will lead to a new European bond tantrum and blow out in yields, there was tremendous end demand by investors for the offering managed by BofAML, Erste Group, GS (B&D), NatWest and SocGen, mostly fund managers from across the globe, resulting in what ended up being more than 11BN in 208 different bids for the paper, an oversubscription of more than 3x! The breakdown for the final allocation is was follows, courtesy of Bloomberg:
    3.5b 100Y tranche: Book exceeded 10.8b from 208 investors, including 1.5b of JLM interest
    Allocation by geography:
    Eurozone incl. Austria 29% Germany 13% France 4% Spain 3% Other Eurozone 9% Other Europe (non-Eurozone) 55% U. K. 42% Switzerland 9% Americas 12% Middle East 4%

    This post was published at Zero Hedge on Sep 13, 2017.


  • Shares of the Swiss National Bank Soar 64% in Two Months

    What the heck is going on? The central bank of Switzerland has become a huge hedge fund since it decided in January 2015 to print Swiss francs – for which there is huge global demand – and sell these freshly created francs to buy bonds and stocks that are denominated in euros and dollars. US stocks are a particular favorite. The Swiss National Bank (SNB) has thereby created a fantastical money-fabrication scheme. This scheme is publicly traded. And the shares have become a doozie.
    Today, the shares (SNBN) closed at a new high of 3,126 Swiss francs, having soared 64% since July 19 in cryptocurrency-fashion. This chart shows the daily moves since May:
    ***
    In January 2015, the SNB ‘shocked’ the financial markets globally by scrapping its minimum exchange rate of CHF 1.20 to the euro and switched to a draconian negative-interest-rate policy and massive asset purchases – massive for a tiny country like Switzerland – to keep the value of the franc from rising against the euro.

    This post was published at Wolf Street on Sep 11, 2017.


  • The Irony for the Money-Printing Central-Bank Hedge Fund?

    So Swiss National Bank shares soar 64% in 2 months.
    The central bank of Switzerland has become a huge hedge fund since it decided in January 2015 to print Swiss francs – for which there is huge global demand – and sell these freshly created francs to buy bonds and stocks that are denominated in euros and dollars. US stocks are a particular favorite. The Swiss National Bank (SNB) has thereby created a fantastical money-fabrication scheme. This scheme is publicly traded. And the shares have become a doozie.
    Today, the shares (SNBN) closed at a new high of 3,126 Swiss francs, having soared 64% since July 19 in cryptocurrency-fashion. This chart shows the daily moves since May:

    This post was published at Wolf Street on Sep 11, 2017.


  • Swiss Central Bank Boosts Stakes in FAAMG Stocks by 77 Percent to $9.38 Billion

    The Swiss central bank may be part of a modern age Tulip Bubble.
    Since June 30 of last year, Switzerland’s central bank, the Swiss National Bank, has increased its stock holdings of five U. S. social media/tech stocks from $5.3 billion to $9.38 billion, an increase of 77 percent in 12 months. The stocks are Apple, Alphabet (parent to Google), Microsoft, Amazon and Facebook. The stock information comes from a 13F filing the Swiss National Bank made this month with the U. S. Securities and Exchange Commission (SEC), a quarterly form required of institutional investment managers who manage $100 million or more.
    According to the SEC form, the Swiss central bank owns the following positions as of June 30, 2017: $2.76 billion in Apple common stock; over $2 billion in two classes of Alphabet stock; $1.864 billion in Microsoft common; $1.434 billion in Amazon common; and $1.32 billion in Facebook Class A. It owns tens of billions of dollars more in other U. S. and global stocks.
    Adding to the peculiarity of this central bank, its own stock actually trades on a stock exchange and its stock price has soared by 88 percent since April. (See chart above.)
    According to the website of the Swiss National Bank, it ‘does not pursue any strategic interests in its equity investments and as a general rule does not engage in any stock selection.’ It says its share holdings are ‘managed passively by replicating a combination of different indices.’

    This post was published at Wall Street On Parade By Pam Martens and Russ Marte.


  • Leftists Worry As America’s Tax System Is On The Verge Of Collapse

    The burdensome and regulation filled tax system on those living in the ‘land of the free’ is more than likely on the verge of collapse. The IRS can’t collect enough money, and the government spends too much. But the left is fighting to ensure the government continues to steal as much as possible.
    If the tax system collapses, it’ll be leftists we should worry about. If one in America even suggests to a leftist that they don’t want to pay taxes (have the IRS steal their hard earned money) they are ridiculed, chastised, and accused of not wanting to help the poor. For now, the IRS has bigger fish to fry, but that won’t last, as left-leaning rags everywhere suggest harsher and more aggressive means of taking from others. The IRS is ratcheting up their tax collecting and going after anyone who may have tried to keep some of their own money.
    In March, federal agents raided the headquarters of equipment giant Caterpillar Inc, as part of a long-running investigation into whether the company owes $2 billion in back taxes and penalties for a scheme that allegedly shifted profits to Switzerland. Caterpillar isfighting the charges. – Vice

    This post was published at shtfplan on August 24th, 2017.


  • China’s Get the Gold Plan: Part II

    Money Metals readers may remember my November 2014 report in which I discussed how gold flowed into China in “tributary fashion” like small streams flowing into a giant one. In this case, the gold has been streaming into China’s increasingly massive thousands-of-tons gold hoard.
    In January, 2015, I penned an essay titled “China’s Global Gold Supply “Game of Stones,” outlining China’s long-range goal to dominate the world’s physical gold market.
    Well, events have moved massively forward since then. I want to update you as to just how much things have changed – and how close we may be to experiencing a “defining moment” in the gold market.
    I’m talking about a game-changing event that could, with little warning, propel the price of gold upward by hundreds – even thousands – of dollars per ounce in the space of a few weeks… conceivably overnight! (And since silver’s price movements are highly correlated with that of gold, we could expect an upside explosion in silver as well.)
    China’s 4-pronged gold accumulation strategy:
    First: Buy physical gold in world markets, re-fabricate it when necessary (into .9999 fine bars in Switzerland), and ship to the mainland.

    This post was published at GoldSeek on 23 August 2017.


  • Marc Faber: In The Age Of Cyber-Terrorism, Every Investor Must Own Gold

    Take it from ‘Dr. Doom’: own some physical gold and keep it out of the banking system.
    Dr. Marc Faber, a legendary investor and the editor/publisher of the Gloom, Boom & Doom Report, is well known for his contrarian investing style.
    In a recent Metal Masters interview with the Hard Assets Alliance, he noted that the biggest geopolitical risk for Americans today is not a conventional war but rather cyber-attacks that could take down the US power grid.
    In such a scenario, gold would become an irreplaceable medium of exchange. But it’s not the only reason to own gold today.
    Diversified Assets Outside the Banking System
    Faber grew up in Switzerland right after World War II, a tough time that caused his family to distrust paper money and taught him the importance of precious metals as a safety net.
    Faber remembers how his father talked about rich people as millionaires.
    ‘That, in the ’50s and ’60s and ’70s, was a lot of money. Today, a million is nothing at all – small change. Unfortunately. When people talk about, ‘Oh, there is no inflation in the system,’ this is nonsense. Compared to assets, money has lost a tremendous amount of purchasing power.’

    This post was published at Zero Hedge on Aug 20, 2017.


  • Governments to Control Large Cash Transactions

    I have been pointing out the crisis we face moving forward. The gist of this is the total fiscal mismanagement of government for which we, the people, are always blamed. This hunt for taxes has led down the path of arguments for eliminating currency. While people think Bitcoin is an answer, they do not understand government’s hunt for taxes no less the lack of a true rule of law. The government need only pass a law that anyone who fails to report what they have in Bitcoin is criminal and they get to confiscate all your assets.
    Switzerland has its ‘wealth tax’ which they argue is nothing just 0.02%. However, it requires you to report all assets worldwide. They then know precisely what you have and it is merely one vote away at anytime to raise the tax or impose criminal penalties for failure to report everything. Yet, once Switzerland has that info, under G20 they must share it with all other governments.

    This post was published at Armstrong Economics on Aug 16, 2017.


  • How to Cash In When the Fed’s Sweetheart Deal with the World’s Biggest Banks Turns Sour

    I recently showed you why ‘don’t fight the Fed’ is likely the most profitable investment advice you can get.
    Now I’m going to show you why it works so well.
    And while I do that, I’m going to blow the door off the hinges and expose how the Federal Reserve’s outsized influence and tight relationships with some of the planet’s biggest, most powerful banks can make or break markets…
    …and lead you to some of the biggest gains you’ve ever seen: 100% sure money.
    Meet the Fed’s ‘Accomplices
    Big surprise: the U. S. Federal Reserve does things a little differently than your ‘usual’ bank.
    You see, the Fed handpicks a small group of (very) privileged dealers to trade with.
    They are officially called ‘Primary Dealers,’ and today there are 23 of them. These banks are based in Canada, France, Switzerland, Japan, Germany, the United Kingdom, and of course, the United States. The foreign banks the Fed deals with maintain a presence in New York City.

    This post was published at Wall Street Examiner on August 10, 2017.