Gold initiative to be voted on by the people
The [Swiss] National Bank should bring back all their gold reserves in the Switzerland and buy hundreds of tons of the precious metal - the [political] rights party SVPs latest initiative is hotly disputed.
The gold initiative from SVP circles has concluded collecting signatures: this was confirmed by Ulrich Schlüer, co-President of the initiative Committee, that more than one month prior to the deadline more than 100000 signatures have been collected
. Thus the people can vote on the three demands of the Committee: firstly, the National Bank (SNB) must bring back all the gold stored in foreign countries, in the Switzerland. Secondly, she can sell in the future no ounce of the metal. And thirdly, the SNB must ensure that it has at least one-fifth of its assets are in gold.
Former member of parliament Schlüer explained it had been a big mistake, that the SNB has sold most of their gold in recent years. The now required reserves would serve to guarantee the stability of the franc - and to secure also the pensions and to prevent a "cold reduction of saleries [via inflation]"
. Investments in gold are safer than those in foreign currencies such as the euro, «which you don't know if it still exists in a year». The former Zurich banking Professor Hans Geiger, also SVP member, added: «the current monetary system is ill - gold, however, is a long-term safe value.
Price of gold might fall
Here, the Fribourg Professor for Economics Reiner Eichenberger puts a big question mark
. Currently, the price of gold is high, because in the face of the crisis in Europe, many people bought the value metal. But that could change quickly, the bubble could burst: «panic sales would fall rapidly the value of gold.» Also, the gold could be obtained easier from the ground - these amounts increase would also in the long term lead to a loss of wealth. And to a loss for the SNB.
Eichenberger criticized also the absolute ban on gold sales in the initiative
. For the support of the Swiss franc, the SNB swelled their balance sheet by buying up euros to around 500 billion Swiss francs. In order to fulfil the initiative, at least 100 billion in gold should be on the balance sheet - about twice as much as there is today. If the National Bank were to shrink the balance sheet to 250 billion, for example, the proportion of gold would rise to 40 per cent - finds Eichenberger. However, this effect is very desired by the initiators: «The higher the price of gold, the SNB more credible can occur», says Ulrich Schlüer.
Two problematic variants [Note by SA: this is pure rubbish]
To achieve the 20 percent share of gold, there were two ways that might cause both problems. Either print fifty billion Swiss francs, the SNB and thus buys the gold.
This measure increases the risk of inflation. Or it sells euros worth around for 50 billion francs to the market
. As a result it would but weaken the euro and indirectly the franc strengthen – exactly the opposite of what the guardians of monetary policy want to.
The initiative meets skepticism accordingly with FDP [liberal democrat] economic policymaker Ruedi Noser.
«Had it been in place during the euro crisis, the euro/CHF exchange rate would have been down to 50 cent [instead of 1:1]», says Noser - which would mean the death knell for the Swiss export economy. «Switzerland navigates the Euro crisis well, in part thanks to the excellent monetary policy of the National Bank», emphasises the Zurich IT entrepreneur. «We must not restrict this freedom of action for the SNB ever.»
SVP leadership stands behind initiative
The SNB (Swiss National Bank) would not comment on the initiative this time. But it is an open secret that it would not support it. Ulrich Schlüer is still optimistic that he can bring also some representatives of the Center parties on board in addition to the previous allies of EDU (protestant democrats union) and Swiss Democrats.
There are no party grandees in the commitee of the initiative. But according to Mr Schlür, this is normal, if it is not an official initiative of the party. «I don't doubt for a moment that the party leadership will support us in the voting fight such as in ealier initiatives.»
Additional effort was necessary
To reach the barrier of 100 000 signatures, in recent weeks a special effort was necessary. The initiators have benefited from the fact that the SVP has currently no another referendum at the collection stage: thus, numerous sections of the party could go in January and February on signature hunt. In addition, unnamed donors
have opened the casket and allowed the initiators to enclose the signature sheets into various print media.