Will Financial Shocks Never cease: Now Swiss Franc shock!

Discussion in 'Off Topic' started by jbcarioca, Aug 11, 2011.  |  Print Topic

  1. jbcarioca
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  2. Gargoyle
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    Franc'ly, I'm shocked!

    Others want to bail out of the euro, and lots of Europeans I know praise the UK for being smart enough to retain their own currency.
     
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  3. jbcarioca
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    The Swiss would actually like to keep some exports, and it is now exceedingly difficult for them to export anything.
     
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  4. Gargoyle
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    They would also like to keep their imports (I.E. money), but the changing laws and international pressures mean that the big tainted money is going elsewhere.
     
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  5. Gaucho
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    Gaucho Gold Member

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    Im also in shock....

    While I understand the export issue, it must be said that many of the things actually made in Switzerland are luxury goods, which are therefore less price sensitive... its not like they are making 2 million automobiles somewhere in the alps and a strong franc is killing that. A peg to a possible dead duck currency like the Euro makes very little sense to me.
     
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  6. jbcarioca
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    In order Swiss exports by value are:
    machinery, chemicals, metals, watches, agricultural products
    All but watches are quite price sensitive. Swiss machinery competes directly with German, Korean, Japanese, Chinese and American products. The German, Chinese and American ones benefit from weak currency, even though the Chinese currency is under upward pressure.
    Chemicals, agricultural products and metals produced in Switzerland are mostly commodities and are subject to serious competition from low cost countries with weak currencies.

    Thus they really need to weaken the Franc if they can!
     
  7. Gaucho
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    In my experience, procedence makes a difference... and in some markets its not the same to use Chinese steel or Swiss steel... just the same as leather from a Tannery in Italy is not the same as leather from a Tannery in Korea. Also, the Swiss are poineers and leaders in Specialty Chemicals... they are long out of the mass production chepo stuff.... and also, one must remember that for many goods, the Swiss are competing with themselves because they have overseas subsidiaries (many in China and India) that are producing stuff under license... in the end I think the swiss economy is strong whatever way you look at it. Having said all this, its not immune to a global crisis... then again, in todays world, who is...?
     
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  8. jbcarioca
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    Good points all. The Swiss Central Bank and the government are definitely recording serious falloff in exports, so they most certainly are not immune. Their financial sector is not very healthy either. A large change for the Switzerland of old...
     
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