Swiss Franc Decoupled Euro; Screams Ensue

By ending the practice of pegging the Swiss franc to the Euro, the Swiss National Bank have enraged our financial elites.

The New York Sun published a nice succinct editorial on Friday about the Swiss National Bank’s decision to de-peg their currency from the Euro. An excerpt:

All other virtues of this drama aside, what a paroxysm of panic it has produced at the Financial Times, which has declared that “Thursday’s action in the Swiss franc defies the reach of hyperbole.” We haven’t heard such a primal scream from the FT since Prime Minister Thatcher cut taxes (at that juncture the Wall Street Journal consoled its competitor with an editorial called “Cheer Up, Lads”). The FT calls the Swiss National Bank’s move “a poor advertisement for Swiss reliability.” It suggests the Swiss demarche is “all the more remarkable” because the currency is “prized for its stability.”

The screams have somewhat quieted, but major trading entities throughout the world are counting their dead and wounded—some clinging to desperate hopes of bailouts and fiscal life-support—following the Swiss National Bank’s (SNB) decision to ‘unpeg’ their currency from the Euro.

What Jon Corzine and MFGlobal were to many small investors (a grand act of almost completely unpunished theft and fraud that brought into question why anyone would trust contracts written by Wall Street predators, and adjudicated by complicit courts) the SNB’s decision was to hedge funds and other huge players trading in Foreign Exchange markets.

Perhaps more will come to see that when you play a game wherein the rules are set—and changed—on the whims of an elite (and debauched) few, it’s only a matter of time before they proclaim: “Heads I win, tails you lose.”

Modern Central Banking is a corrupt system, based on the fraud of fractional-reserve fiat money. It thrives on debt and counterfeiting, which enables a tiny minority to gain great power and wealth at the expense of the majority. The entire system must die for freedom and long-term, sustainable prosperity to have a chance.

The bitter truth is that all the sturm and drang over the Swiss franc is a feature of the age of fiat money. The exclamations of horror that have greeted the decision of one tiny country to stop playing the same game as the bigger countries testify to nothing so much as the absurdity of the fiat system. 

This system has, admittedly, brought relatively fast and widespread material gains to the globe, but at a cost of stability and economic morality. Basing a monetary system on ungodly amounts of debt and leverage—rather than real assets—is unsustainable, and our elites have put nearly the entire world into one vehicle which is now fast heading for a jaw-dropping monetary cliff.

[See also, “Inflation is Bad for Us!]

Last week, the Swiss decided, in a limited sense, to jump out of that moving car. They will suffer for a while from their injuries, but at least they may have a chance to survive what is about to unfold.

Switzerland’s history is a combination of openness to working with the world in commerce and banking, while relying on an ability to fall back behind literal walls of mountain stone, protected by a citizenry who regularly train to guard the passes into their nation with lead and powder, should the situation demand it.

America began with a vision to be a “Shining City on a Hill’—showcasing the temporal blessings that often come as the fruit of keeping one’s primary focus on the eternal. Unfortunately, we took our eyes off the spiritual roots that led to a healthy, and fruitful cultural tree. Now, with dead roots and a dying trunk, the last of the fruit is about to fall to the ground and rot.

The central question is whether the approaching crash will humble us into returning in humility to the God of our founding principles, or if we will instead turn on one another, in a bloody fight to possess the last of those rotting pieces of fallen fruit.