Swiss draw line in the sand to cap runaway franc | Reuters
It is a sign of the tough times that the Swiss franc has continued to rise so strongly. The currency of a country of less than 10million is highly attractive to investors from around the globe. This summer has not been a respite from an ongoing tough year across the board.
This is probably the best lever from the SNB to pull. They are perhaps one of the few central banks with credibility, and so the rate has held the last week at 1.2. So perhaps some relief for their exports and tourist trade. However, as the article states, when they did this in the last 70s, they successfully defended the rate, but at the price of soaring inflation. I do picture this small Swiss island surronding by the hostile flood waters of the world.
It seems that our banking sector did not suffer as much as they should have - early on more losses were needed, more bankruptcies and proof that there is no 'too big to fail'. Our governments have simply saddled themselves with even more debt and are proving incapable of managing through the transition. The EFSF (European Financial Stability Facility) looks like a ponzi scheme, spreading the debt further to the more successful parts of the european economy.
I am truly anxious now that the period post the great depression which brought in such globally significant changes in government may be something to consider for ourselves. We are used to democratic stability in the west now, but social impacts cannot be avoided. Governments must understand that they cannot see this through. We need them to focus on the safety net side of the equation addressing long term structural issues around retirement and health care, helping their citizens understand the tough choices to be made. They also need to give up trying to control the growth side.
The marketplace itself needs to start kicking in, and perhaps has been holding back because governments keep changing the goal posts with flows of guarantees. Re-extending the unemployment insurance in the US is unfortunately now probably going to do more harm than good. The private sector is relatively healthy still, and it is best suited to train and re-employ people. They need clarity to move ahead, and some bravery to start making bets on people and potential again.
Also see:
doom boom, The | Spectator, The | Find Articles at BNET
Washington needs to wake up to the jobs crisis - The Term Sheet: Fortune's deals blog Term Sheet
It is a sign of the tough times that the Swiss franc has continued to rise so strongly. The currency of a country of less than 10million is highly attractive to investors from around the globe. This summer has not been a respite from an ongoing tough year across the board.
This is probably the best lever from the SNB to pull. They are perhaps one of the few central banks with credibility, and so the rate has held the last week at 1.2. So perhaps some relief for their exports and tourist trade. However, as the article states, when they did this in the last 70s, they successfully defended the rate, but at the price of soaring inflation. I do picture this small Swiss island surronding by the hostile flood waters of the world.
It seems that our banking sector did not suffer as much as they should have - early on more losses were needed, more bankruptcies and proof that there is no 'too big to fail'. Our governments have simply saddled themselves with even more debt and are proving incapable of managing through the transition. The EFSF (European Financial Stability Facility) looks like a ponzi scheme, spreading the debt further to the more successful parts of the european economy.
I am truly anxious now that the period post the great depression which brought in such globally significant changes in government may be something to consider for ourselves. We are used to democratic stability in the west now, but social impacts cannot be avoided. Governments must understand that they cannot see this through. We need them to focus on the safety net side of the equation addressing long term structural issues around retirement and health care, helping their citizens understand the tough choices to be made. They also need to give up trying to control the growth side.
The marketplace itself needs to start kicking in, and perhaps has been holding back because governments keep changing the goal posts with flows of guarantees. Re-extending the unemployment insurance in the US is unfortunately now probably going to do more harm than good. The private sector is relatively healthy still, and it is best suited to train and re-employ people. They need clarity to move ahead, and some bravery to start making bets on people and potential again.
Also see:
doom boom, The | Spectator, The | Find Articles at BNET
Washington needs to wake up to the jobs crisis - The Term Sheet: Fortune's deals blog Term Sheet
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