cloudalps (hidden peaks)

High Tech Economics – implications from a global perspective.

Swiss Franc Peg to Euro: Printing Money leads to Deflation?

While living in Switzerland (and paying for a mortgage in Swiss Francs) makes me wonder about the future of the Swiss economy in general and the Swiss Franc in particular, I am not sure Switzerland can be compared to Zimbabwe.

Jack Mackintosh (FT investment editor)  does exactly that when he compares the printing of Swiss currency with that of Zimbabwe in 2005 that led to hyperinflation. Foreign currency reserves reaching > 60% of GDP is a concern but the falling of the Swiss Franc to parity with the Euro (as experienced before the pegging introduced by the Swiss National Bank on September 6, 2011)  an even worse one.

Ultimately, we might just experience another challenge to a small but widely open economy that is surrounded by EU member states with a different approach to most economic decisions and different political situations.


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