From the Swiss Central Bank: European Quantitative Easing is coming!

Posted: January 16, 2015 in Uncategorized

Yesterday the Swiss shocked the markets unpegging the Swiss Franc from the Euro.

The Swiss Central Bank was having great difficulties in defending the Swiss Franc and it is in constant talk with the European Central Bank. The move means that they are pretty sure that QE -Europe is coming and they could not defend the Swiss Franc any more.

What Europe – QE can we expect?

There are three theories circulating

The ECB buys bonds from all European countries proportionately in relation to economic size – the perfect choice, but opposed by Germany.

The ECB authorizes the State Central Banks of each country (EG Bank of Italy) – a positive choice, but it could be the start of the end of Europe….it makes it easier for an EU member to walk away or be sent off.

The ECB buys only AAA rated bond – it would send the European periphery bonds yields sky-rocketing and de facto create a dual zone Europe – maybe precursor of a Euro 1 (stronger, Germany and Co) and Euro 2 (weaker, Spain and Co)

Still it will not improve the European economy as the issues are not just monetary.

But the markets and Gold could appreciate

 

 

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