Guess Which European Central Bank Might Need To Aid?

Yes it is a provocative title, and it is meant to be because it surprised me. Ok, here is a question, which European Central Bank is being stressed? Which if it is stressed further could have realize very big losses?

Think about it…

Is it one of the PIGS?

Ireland?

Greece?

ECB?

England?

….

SWITZERLAND…

 

Now if you think I am making this up or doing crazy talk here are two articles published in Switzerland.

Swiss National Bank loses up to 32 Billion Swiss Franks

The Backdoor Euro-zone

Essentially what is happening is that the Swiss National Bank has 32 billion CHF or about 36 billion USD of paper losses due to currency holdings. There was even talk about how the Swiss national bank chief has warned the government that the Swissie could strengthen to 0.60 CHF to the EUR. Of course this is doomsday talk, but it shows how dire things have become in this little country.

So why is this happening? Simple Switzerland is fiscally responsible. And people consider Switzerland the rock of stability in this world of turbulence. However, there is a problem namely that Switzerland is a country of 7.8 million people and it cannot absorb such inflows. The Swiss National Bank is simply not able to deal with this.

Corporations are already dealing with this problem by not using the Swiss Franc! They are doing their transactions in Euro’s. That means the only ones using Swissie’s are speculators and me when I buy groceries! But then again most Swiss are probably trading in their Swissies for Euros as they buy things in the EURO zone.

My point is that be forewarned speculators! This could have a REALLY bad ending for you… and ONLY you…

Posted in General Trading