Forbes reports:
Switzerland is a small country of just 8 million people, but they make an outsized impact on economics and finance and money.
Because Switzerland is considered a safe haven and a well-run country, many people would like to hold large amounts of their assets in the Swiss franc. This makes the Swiss franc intolerably strong for Swiss businesses and citizens.
So the Swiss National Bank (SNB) has to print a great deal of money and use nonconventional means to hold down the value of their currency. Their overnight repo rate is -0.75%.
That’s right, they charge you a little less than 1% a year just for the pleasure of letting your cash sit in a Swiss bank deposit.
There's more:
Switzerland Is Buying US Stocks on an Enormous Scale
And the SNB is buying massive quantities of dollars and euros, paid for by printing hundreds of billions in Swiss francs.
The SNB owns about $80 billion in U.S. stocks today (June, 2017) and a guesstimated $20 billion or so in European stocks (this guess comes from my friend Grant Williams, so I will go with it).
They have bought roughly $17 billion worth of U.S. stocks so far this year. And they have no formula; they are just trying to manage their currency.
Think about this for a moment: They have about $10,000 in U.S. stocks on their books for every man, woman, and child in Switzerland, not to mention who knows how much in other assorted assets, all in the effort to keep a lid on what is still one of the most expensive currencies in the world.
An article, well worth your time. Central banks really are a cancer...
