Wow the swiss franc just shot up 30%. Can't help but think maybe I should diversify into a pile of swiss francs as they seem to offer huge potential moving forward. Thoughts?
Something I've come to realise over the years is that you make your money when you buy. They're 30% dearer than yesterday.
The only Swiss francs I have are silver, and they have been demonetised anyway. If I was in Switzerland I would be buying a ton of stuff from overseas eBay sites, might even go and buy some precious metals, the francs are more volatile than silver.
I'd say the Swiss Franc could go up or down, depending on your time frame. CJ would also add that if can go <<<<<<<<<<---------- sideways ----------->>>>>>>>
You are not talking about a normal occurence here. The Swiss Franc has been held down artificially through the Franc/Euro peg where the swiss national bank was having to buy euro's to keep the franc from dropping too much. In turn they were facing an ever increasing loss on exchange rates should they drop the peg. It was drop the peg now and suffer enormous losses or break the peg later and suffer freakin enormous losses. The end is nigh for the Euro and now the ECB will consider Q.E.........this will only serve to drive the Euro lower and drive capital to the U.S. dollar, the Swiss Franc, U.S. bonds. On top of this, an awful lot of people in Europe have home loans in Swiss Francs. They have just copped a 30% rise in the value of their home loan and will be keen to exit the loan. This will mean further buying of Swiss Franc. The Swiss Franc is not going to drop back down against the Euro. In the medium turn it will be going up, up, up and this will further drive capital to it.
The most interesting part for me was a drop in interest rates from -0.25 to -0.75% Pay them to hold your money - I just can't understand that.
Go to Ozforex and look at the one year chart of the HKD and you will see strength. Only a fool would be holding Euro at this point in time and those thinking of speculating are poorly informed. It is heading for parity with the U.S. dollar. It is a shame that we cannot get good rates in this country. I was in Singapore and could exchange Singapore dollar for Aussie dollar at a far better rate than I could get in this country.
The whole point of the negative interest rates was to discourage the flood of money entering the Swiss Franc. The 30% rise could have been 50% if the negative rates had not been enacted. Even so, -0.75% is a lot better than -30% don't you think?
Martin Armstrong likened it to an ordered retreat with a few smoke grenades thrown to cover the retreat. The negative interest rates are the smoke grenades. Helpful....in a small way.