Posted on 04/29/2025 10:09:19 AM PDT by SoConPubbie
Hat Tip very dear friend of the Treehouse, Zurich Mike.
Switzerland is in a conundrum. More specifically, the Swiss National Bank is stuck betwixt two points that are also playing out in other stable western countries. Exports to the USA account for over ten percent of the Swiss manufacturing base.
The Trump tariffs are putting pressure on Switzerland to drop the value of their currency as an offset to retain competitive pricing. However, simultaneous to the tariffs, the Swiss Franc is being purchased by global investment groups and sovereign foreign countries as a safe harbor due to the stability of the currency, which is driving up the value of the franc.
The Swiss Franc is now at the highest point against the U.S dollar in decades. One franc is worth 1.21 dollars. This makes their exports cost even more. The Swiss government desperately needs to lower the value of their currency. The Swiss central bank has already dropped interest rates to 0.25% and is now contemplating negative interest rates as a result.
SWITZERLAND – […] That is why many are speculating on a reaction from the Swiss National Bank (SNB). SNB Director Martin Schlegel could weaken the currency by selling the Swiss franc against the dollar and euro in order to support the export-oriented economy.
But this could provoke a backlash from Trump if he perceives the SNB’s intervention as currency manipulation. Even during Trump’s first term in office, Switzerland was on the US list of suspected currency manipulators.
[…] Interest rate cuts in the key interest rate are considered a diplomatically safe measure to control the franc. It defines the interest rate at which commercial banks can borrow money from the SNB. “If the SNB is dissatisfied with the strong franc and remains limited in foreign exchange interventions, lower interest rates are the only option,” says Francesco Pesole of Bank ING.
Interest rates have already fallen sharply recently. It was only at the end of March that Schlegel lowered the key interest rate to 0.25 percent. The market currently expects a probability of around 80 percent that the key interest rate will fall to zero at the next meeting in June. Yields on short-term government bonds have already fallen into negative territory in recent days. (read more)
If interest rates go into negative territory, savers will be required to pay the bank for storing their money. “Until 2022, various Swiss banks required their customers to pay negative interest on their accounts.”
Meanwhile in other news from Europe, as the Chinese economy contracts, heavy industrial equipment -once again- becomes useless, the Europeans are worried that China will dump cranes and other industrial equipment into their economy.
Screw the Swiss National Bank and Globalists real good!!
You know you’re doing something right when you’re causing problems for Globalists.
👍👍
I wonder how much giving up their neutrality will cost in the end. Seems like people are still seeing them as a neutral country and therefore their funds will be safe.
That's a critical lie they want people to believe.
Switzerland, kept that Nazi gold in secret until 1997, claiming that the rightful owners never came forward. The people it belonged to left on a train it seems. On vacation or something they suspected...
What happened to that gold after WWII
The Swiss National Bank still has all that Nazi loot they took in.
Bkmrk
The US Military can fix that.
Too bad they didn't do it back when it should have been done.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.