Has Switzerland Sold Out to Washington, London, & Wall Street?

1. Switzerland Ended Gold Reserve Requirement Backing Swiss Franc. Switzerland voted to do away with the gold reserve requirement backing their currency. I didn't at the time and continue to feel that this was not a major factor in the strength of the Swiss franc for two reasons. (1)Gold has been weak and trending lower in value for almost two decades and (2)the value of Switzerland's currency is much more determined by the policies and targeting by the Swiss central bank than outside market forces.

2. The European Union's Euro was Created. The Euro was expected to be stronger than the dollar from the beginning and it promptly feel from 1.18 to the dollar down to near 80 cents. The Euro was weak compared to the dollar because it was pegged too high in the beginning and because of the overwhelming strength of the dollar on the back of the late ‘90's US bull market in stocks and NASD mania. This extraordinary strength of the dollar would have made the Swiss franc fall in comparison in either case but was made far worse with the Swiss National Banks’ (their central bank) decision to peg the Swiss franc to the new Euro currency.

3. The Swiss Central Bank "Unofficially" Linked the Value of the Swiss Franc to the Euro. Remember, Swiss central bankers are as corrupt as their US counterparts in the Federal Reserve system. The powerful political and financial elites of the US, Great Britain, and Germany were joined by the same elites in Switzerland, wanting Switzerland to join the EU and surrender its currency. Due to Switzerland's historical political rights of referendum and initiative they knew they had no chance to impose this on the voters so they thwarted the will of the Swiss electorate by pegging the currency value of the Swiss franc to the Euro anyway.

Look at the two charts below showing the value of the Swiss franc and Euro verses the dollar during the last 2 years and you will see what I mean. Now to be fair, part of the reason for this unofficial linkage was the fear in Swiss financial circles that a weak Euro could mean a run on the Euro, loss of confidence in the new “One Europe” currency and a flood of foreign money into the Swiss franc.

4. The Once Independent Swiss National Bank is Now Just Another Central Bank Marching Under the Lead of the US Federal Reserve. As we all know there has been an ongoing war against gold, hard currencies and financial privacy by the major western democracies led by Washington during the last decade of the 20th century. The Swiss central bank is now on call, as are the other European central banks, to suddenly announce gold sales if its value rises above central banker target prices or to raise or lower interest rates if required for market and currency stability. Stability doesn't necessarily mean safety for investors but for the political and financial establishments that control much of the world's commerce and investment markets.

5. Swiss Financial Privacy & Banking Confidentiality Is Weakening Along With Every Other Nation in the World. Washington and London have been leaning on and threatening every independent and dependent safe haven in the world in order to destroy every last shred of personal, economic and financial privacy. The horrible terrorist attack on New York on September 11 has been used by the Washington politicians and the financial establishment as the pretext to “blitzkrieg” the new regulations and legislation that will effectively end most, if not all, offshore privacy. While many pro-liberty groups and civil libertarians, like the Sovereign Society and Congressman Ron Paul, are speaking out against this final nail into the coffin of financial privacy it will not matter. America is in the grip of a war hysteria, terrorist assault and related financial crisis. It is in times like this that civil liberties go out the window and there isn't a thing we can do about it. Yes, much of the Moslem hatred for America is a result of our foreign policy but we have been attacked and thousands of innocent civilians killed therefore we must respond.

6. The Swiss Parliament Vote To Join the United Nations & The Bankruptcy of Swiss Air. The Parliament vote is not a done deal, due again to the Swiss citizens rights to initiative and referendum, but this does worry me from a political viewpoint. The most neutral and non-aligned nation in the world joining the cesspool of the United Nations? And where were the time honored Swiss traits of conservative management and avoidance of debt that allowed Swiss Air to build up such a mountain of debt that it has been forced to file for bankruptcy?

Has Switzerland Sold Out? No. But their politicians, central bankers and much of the business establishment have. I believe their rationale is to compete in the global export and financial markets of the 21st century; they must join with two of the three "so called super states" of the world - China, the European Union and the United States. Is this the right course of action? I don't think so.

Will the independent, freedom-loving Swiss people go along with this new “one world” path for Switzerland and will it work to the benefit of Switzerland? To be very frank, this Swiss establishment sell-out of much that has made Switzerland the envy of the world (except for other national political leaders and financial competitors) and home to 35% of the world's private wealth according to many experts, certainly hasn't worked to date. All one has to do is look at the carnage of the bankruptcy of Swiss Air, the weak Swiss currency and the many merged Swiss banks to see that their attempt to emulate those in the European Union and the United States has failed to date.

Will the Swiss people continue to put up with this sell out? Not if their economy continues to falter. More importantly, unlike here in the United States, there are politicians and a political party that still stands for putting Switzerland and her citizens first over the global elite's. This is the Swiss Peoples Party headed by Christoph Blocher.

What Does This Mean For Switzerland's Future
as a Financial Safe Haven & the Swiss Franc?

First, I must admit that I'm generally bullish on both the Swiss Franc and the Euro over the next 12-36 months. The US dollar has obviously peaked and the Swiss Franc created a double bottom in December of ‘00 and July of ‘01 at around 55 cents to the dollar. It appreciated to 63 cents just after the terrorist attack on New York City and the Pentagon and is now around 60 cents. On the down side, while both the Euro and Swiss Franc have appreciated due to today's perilous situation in the US, it is still nothing to write home about.

Although I believe Switzerland's position as the world's leading safe haven for financial wealth is battered, it is still secure for US investors when compared to here in the US or the rest of the world. They still have a strong layer of asset protection, a legal system that protects and defends investor wealth instead of attacking and confiscating it. The Swiss franc and the Euro have bottomed and likely will appreciate verses the dollar, much will depend on the US war situation.

The point to keep in mind is that Switzerland’s investment management services are still, in my opinion, the most advanced and talented in Europe. Switzerland is one of my preferred locations to take advantage of, what I believe, may well be a “European Renaissance” and bull market in European equities in the coming decade.

If You Are Already Invested in Swiss Franc Denominated Investments in a US Product (the Swiss Franc Variable Annuity Product) or Offshore in an Annuity or Swiss Bank Account - How Do You Keep Up With What's Going On?

The Internet - Our Swiss financial news site SwissGnomes.com will update you on a regular basis concerning news about Switzerland, the Swiss franc and Swiss privacy. The site includes currency links where you can chart or follow the Swiss Franc on a daily basis. I will write, provide links and post articles, both negative and favorable, to Switzerland from the unique view of a non-Swiss, who is still in love with the nation of Switzerland, but tempered by 20 years of experience in Swiss investments and with the Swiss people to know that the country is beautiful, the people love freedom but that politicians, even in Switzerland, will always be politicians first and statesmen second. Other news sites to bookmark can be found at the end of this article.

E-Mail Communications – Feel free to e-mail me with any questions and concerns you may have. I also broadcast an email newsletter Update: Europe containing financial news regarding Switzerland and other European countries. Call or e-mail me if you would like to receive these timely updates.

Toll-Free Line – Please feel free to call me at 1-888-560-8779 if you have any questions concerning the Swiss franc, the US Swiss Franc denominated variable annuity product and currency trends.

Where are the Profit Opportunities in the
First Decade of the 21st Century?

I am currently writing a new special report entitled: "The Coming European Renaissance”. I believe the economic and military costs of the current war on terrorism may cause the economy of the US and our equity markets to languish. Our nation will flounder under the clouds of a no-win war against terrorism, too much public and private debt and our growing rift with the one billion citizens of the Moslem world over our foreign policy. What will this shift in power and economy mean for your future investment portfolio profits, financial privacy and asset protection?

Europe will, of course, give us their total support but will commit few troops and even less in monetary contributions while we suffer the costs and homeland attacks that will almost certainly continue to occur in our long-term war against terrorism. They will not be openly involved and will benefit with a free ride to prosperity and profits while we shoulder the burden and risks resulting from our foreign policy. Western Europe and much of the formerly iron-curtained East will get an opportunity to prosper without the old Soviet threat on their eastern borders. This could translate into growth, prosperity, stock market profits and appreciation of the Euro and Swiss Franc in a comparable way to the Japanese prosperity of the 1970's and early 80's. Remember, this was when Japan had a free defense ride in the cold war from the US military.

To summarize, I believe Europe is poised for new growth and prosperity because they have left the costs and problems of an empire behind after two world wars. We, unfortunately, have picked up that burden and we will pay the price. There are many ways to participate in the European Renaissance, which will be included in The Coming European Renaissance. Feel free to call in advance to request a print copy of the report or if you would like to discuss the report or European investments. The report will also be available as a download from my websites.

As always, if you have an interest in Switzerland, Swiss investment management services, the Swiss franc, or have previously invested with Swiss banks or other Swiss products and have any questions please feel free to call.