No Gold Rush After All: Swiss Voters Say NO to “Save Our Gold” Initiative

March 22, 2015

By: Brandon Kennedy

Its back to business as usual for those closely studying the “Save Our Gold” initiative in Switzerland after Swiss voters turned down the proposal by %77. The potential referendum would have had Swiss National Banks(SNB)back %20 of their assets with gold reserves up from the 7.5% it currently owns. Many speculated about the possible rise in gold as a result of this referendum if it were to be passed, but with a 5 year allowance to repatriate and purchase this gold, it likely would have had minimal if any affect at all, especially compared with the purchasing of other nations. Gold repatriation is something that has had people in the economic field talking as of late as countries such as Germany, France, and Netherlands are making a slow move toward boosting their gold reserves. Some speculate this is as an outcome of recent economic uncertainty within the EU in regards to large debt levels among the worlds elite, and has certainly gathered international attention surrounding the matter.

Nevertheless, there was no shortage of news coverage when the right winged Swiss Peoples Party started the “Save Our Gold” campaign earlier last week. Switzerland has long been seen as a safe haven for banking among other things, maintaining a stable economy throughout the years, so it is no surprise that this recent news has garnished so much attention internationally. Could this recent movement create a precedent among nations within the EU and abroad? The speculation never got that far, as the SNB, Swiss government, as well as the Swiss public answered overwhelmingly that they wish to continue a cohesive international economic policy and will avoid any tensions and disruptions to monetary policy which could have arisen form this potential referendum. With debt levels climbing among the worlds elite nations, economic stability remains a hot topic among academics. Some argue this recent initiative would have only worsened the ability for the SNB to defend itself against rising inflation rates as this gold could not be sold in a liquidity crisis. Others argue that maintaining a 20% gold to asset ratio would not impede the SNB ability to do so, as it would have no effect on the banks ability to continue to print Swiss franks which is currently the case. Although this specific case ended with a dismissal, it will be interesting to see if similar events continue, and a movement toward gold repatriation will gain any ground in the near future.

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