Currency Wars and The Swiss National Bank

When the European Union was about to collapse, this led to some rather extreme monetary measures to keep this financially flawed, ideologically driven ship afloat. In reaction to the butterfly flapping its wings in the EU, Switzerland needed to come up with a plan to avoid the Swiss franc appreciating so much against the purposeful devaluation of the euro, that it ruined their economic Shangri-La. This plan included the artificial creation of electronic money, the selling of Swiss francs, and the accumulation of loads of US dollars, which were then employed each month and quarter to purchase US stocks. There are a lot of unintended consequences in this world that arise from the need of every country to devalue and weaken their currencies as a principal strategy in avoiding the real problems regarding why their respective countries are struggling economically. 

We tell the little story of the Swiss National Bank and why they need to buy the stocks of US blue chip companies and hold these assets on the country’s balance sheet in this video.

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Courtesy of John Mark Gray, author of two books - Rockstar GM and Corporate Game Theory, available on Amazon. He also has a blog and a YouTube Channel. John has an MA in Philosophy and an MBA in Business. He has worked in academia, Fortune 500 companies, consulting, and financial markets. He has written many articles and white papers on financial markets and economics. He has a background in Logic & Game Theory and enjoys playing Chess and Poker in his spare time.

The views and opinions expressed herein are the author's own and do not necessarily reflect those of EconMatters.

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