BREAKING: SwissGold Referendum Shot Down in Flames

The Swiss have rejected the “Save Our Swiss Gold” voter referendum that would have required the Swiss National Bank to:

– hold at least 20% of its reserves in gold;

– repatriate of all of its gold currently held outside its borders; and

– ban selling any of its gold.

Louis Cammarosano at  Smaulgld writes:

Swiss Voters Hand Swiss National Bank a Blank Check and More Toner for Their Franc Printing Press

Because the Save our Swiss Gold initiative was rejected, it means that the SNB can continue their misguided policy of printing Swiss Francs to buy Euro denominated debt in order to support the Franc:Euro peg of 1.2:1.

By buying Euro denominated debt, the Swiss in effect have been and will continue to be supporting the deficit spending of the Euro zone.

The European Central Bank (ECB) is considering its own round of quantitative easing (QE). If the ECB were to embark in its own QE program, Switerland, unfettered by any gold reserve requirements will have to go along on the disasterous journey and continue to print Francs in order to prevent the Franc from appreciating against the Euro.

Gold rises as a hedge against inflation – defined as an increase in the money suppply. The Swiss No vote on the Save Our Swiss Gold vote ensures that the SNB may now continue their Franc printing and if necessary increase it unfettered by any gold reserve requirement.

UPDATE

The final vote is in: 78% voted against the referendum.