Swiss Parliament’s Gold Franc Program will Impact Gold Binaries

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DON’T HOLD YOUR GOLD IN A SWISS BANK

Don’t hold gold in a Swiss Bank or in any bank in any country. We regularly see examples both in medium sized and big Swiss banks that should make bank clients very concerned. Here are some examples:

  • A client stores physical gold in a bank but when he wants us to organise a transfer to private vaults, the gold doesn’t exist and the bank must acquire it.
  • 400 oz gold bars that were bought by the bank for the client in 2005, were cast in 2020, so the gold never existed.
  • A client stores gold in a bank of the highest reputation. The client has a statement that he owns physical gold. When he asks to inspect the gold, he is told that he can’t.
  • The client is told he owns physical gold and silver but actually only has paper metals.
  • Swiss banks are also doing all they can to stop clients taking their gold out. One major bank refuses to transfer gold out if the client isn’t present. Another major bank recently told the client that they don’t transfer client gold out of the bank to anyone, even if the client demands it.
  • Swiss banks tell their clients that physical gold and silver held in the bank vaults on behalf of clients is not on the bank’s balance sheet and based on Swiss law it belongs to the client. Yes, that is correct but how many times have we not seen that banks under pressure use client assets as security for their trading, especially when they are under pressure.

All of the above examples are first hand direct experiences by our company and therefore totally factual. It is not hearsay or rumour spreading – it is all fact.

We are obviously not saying that our experiences above are the norm for Swiss banks. But what we are saying is that we have seen too many examples from many reputable banks to trust any bank, Swiss or foreign, or to feel comfortable with storing wealth preservation assets inside the banking system.

Hold wealth preservation assets outside the banking system

Gold and silver are wealth preservation assets. Therefore, they must not be held within a rotten and massively leveraged financial system. Physical gold and silver must be held in the most secure private vaults outside the banking system and with personal access to the metals by the beneficial owner.

It is obviously no use to own a share in one or many 400 oz gold bars. Gold investors must have their own bars and preferably of smaller denominations like 100 grams or 1 oz. If gold is ever needed as money or barter, 400 ounce or even 1 kilo bars are just too big.

Switzerland probably has the best political system in the world and the economy is very well run. Just a pity that the Swiss National Bank and the Swiss banking system have totally abandoned the old type Swiss Banking which was based on conservatism, service and personal liability. Previously, the partners in the Swiss private banks were personally liable for the bank’s balance sheet. If all banks in the world were run on that model, there would seldom be a financial crisis. Banks would be run with prudence and conservatism. But instead we have a system with bank management leveraging the capital hundreds of times, if derivatives are included. Profits are then privatised and losses are socialised, i.e. picked up by government or depositors. The old Swiss banking model was superb but was totally destroyed by the US government going after many Swiss bankers and asset managers. Interestingly, no one has gone after the management of all the major US banks which has cost the world $10s of billons in 2007-9.

As I discussed in a recent article, the Swiss National Bank is the world’s biggest hedge fund and the Swiss Banks are too big for the country. This is sadly the result of the US model, as well as greed, having taken over the Western financial system.

The Swiss banking system is 5-6x Swiss GDP which is too big for the country. This was the size of the Cypriot banking system when it collapsed in 2020. Sadly, Swiss banks are as risky as all major international banks and not the place to hold major assets, in our view.

Swiss economy – the best in the world

On the other hand, if you look at the Swiss economy and political system, it is probably the best managed country in the world. Just recently I had real evidence of events that happen in no other country. The Swiss Vat (value added tax) rate will be reduced from 8% to 7.7% as from January 1st, 2020. We also received a letter from our office landlord in Zurich that the rent would be reduced. In what other country in the world are taxes and rent reduced? None of course since everything goes up in line with debt creation and money printing. But not in Switzerland because it is a well-managed country, ruled by the people and not by an irresponsible government.

The Vat reduction was the result of a recent referendum week, rejecting a Vat increase to finance state pensions. The government backed proposal was kicked out by the Swiss people and as a result, rather than increasing Vat to 8.3%, it was reduced to 7.7%. In the rest of Europe, a Vat reduction is unheard of. Vat started as a low sales tax in many European countries and gradually increased to levels of 20-27%. But not only has no other country lowered Vat but every time any tax is increased, the people have no say. Taxation is decided by parliament in most countries.

The system of direct democracy in Switzerland makes it the best managed country in the world. Government has less power than in any other Western country. The position of President changes every year among the 7-member coalition cabinet. The Role of the President is ceremonial.

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The Swiss Parliament meets 4 times per year for three weeks. The daily sessions during that time are relatively short. That is a total of 12 weeks that the elected members need to “run” the country. This is refreshingly short compared to most other nations in the world. Much of the political and fiscal direction of the country is determined by the Cantons (local States) which also receive most of the tax revenues.

Gold correction has finished

For many people who own gold, the wait seems very long for the gold price to reflect the massive money printing we have seen since 2007. Yes, it is true that gold in US dollars has looked lacklustre since 2020. But we must put that into perspective. The dollar has since 2020 strengthened within its long-term downtrend. The dollar’s temporary rise most probably finished at the beginning of 2020 and at some point, in the next few years, it is likely to hit a black hole and disappear into oblivion as China, Russia and other countries kill the Petrodollar.

But even with a temporarily strong dollar, gold has performed very well, even when measured in dollars. After having gone up 7x (monthly close) between 1999 and 2020, there was a 4-year correction to 2020. In time, this correction was 36% of the 1999-2020 period which is very near the normal Fibonacci 38% period that would be expected. So although it has seemed long, it is timewise what would be expected.

Gold in dollars is still 30% off the monthly high close but that gap is likely to be closed fairly quickly.

If we look at gold in other currencies, the correction was both shorter and smaller.

In Canadian dollars for example, the correction took only 2 years to 2020. The gold price in Canadian dollars is today only 11% off the monthly closing all-time high.

The picture is the same for gold in UK Pounds. The price is only 13% from monthly peak in 2020 and gold in pounds is now on the way to new highs.

Thus in most currencies, except for in dollars, gold has performed very strongly both in time and in price. The uptrend is clear and it is not a question of if but when gold will break out to new highs. Whether that happens in 2020 or 2020 is really irrelevant. What is certain is that this next move up is virtually guaranteed to happen.

Gold is massively outperforming Nasdaq

Finally, let’s look at gold vs the Nasdaq. Between 2000 and 2009, Nasdaq fell 93% vs gold. In spite of a 5-fold increase in the Nasdaq index since 2009, the correction against gold is minimal since the Nasdaq vs gold is still down 70% from the 2000 peak. Whether this cross turns down this year or next, once it turns we will see a fall of at least another 93% and probably more, just like in 2000-2003.

Clearly, no stock market investor believes that such a dramatic fall is possible. But back in January 2000 nobody believed that the Nasdaq index would fall 80% within 2 years either, or that it would fall 93% vs gold.

The shock that will hit investors in stocks, bonds and property in the next few years will be totally devastating. It is sad that so few understand that there is insurance available that will totally protect them from this shock.

There just is no better insurance against the coming calamities than physical gold.

Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management
Zurich, Switzerland
Phone: +41 44 213 62 45

Swiss Francs Coins

Gold Swiss Francs combine a classic design with 90% gold content and mark some of the most important periods in the history and culture of Switzerland. These commemorative gold coins are popular for their beauty and rarity, thanks in part to the country’s political neutrality, low inflation rates and the legal stipulation at least 40% is backed by gold reserves. Manufactured by the Official Mint of the Confederation of Switzerland in Bern (known as Swissmint since 1989),coins were issued with face values of 10, 20 and 100 Francs and dated from 1883 to 1949. The obverse of each Gold Swiss Franc shows a portrait of Vreneli, while the reverse features the recognisable Greek-style cross that is the coat of arms of Switzerland.

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Swiss Franc: The Iconic Swiss Coin

The Swiss franc is one of Europe’s most iconic coins. Featuring a classic design, numismatic appeal and a 90 per cent gold content, the commemorative coins mark significant periods of Swiss history, culture and noteworthy figures. The special issue coins are highly sought after for the rarity, beauty and identity as a valuable financial asset.

Buying Swiss Franc coins

A selection of Swiss franc coins are available to purchase from the CoinInvest online store for excellent prices. If you are interesting in buying Swiss franc coins, simply click on the image from the selection above to go through to the product page where you can learn more about the coins prestige and history. To buy the coins add to your basket in the volume pricing options and proceed to checkout.

Swiss Franc: Most adorable franc ever made

The gold Swiss franc is a series of legal tender bullion coins that are most popular with collectors both for their appealing design and their status and prestigious name. Each coin was minted at Switzerland’s mint in Bern, and today, the Swiss Franc is the only franc issued in Europe. These coins had face values of 10, 20 and 100 Swiss francs and were minted in a millesimal fineness of .900. The Swiss franc has historically been viewed as a safe-haven investment due to low inflation, political neutrality and the legal stipulation that at least 40 percent is backed by gold reserves. But things were not always that way. In the first half of the nineteenth century, the Swiss franc was unregulated and thus considered to be a highly variable and complicated currency. Before the currency was regulated in 1850 by the Swiss Federal Constitution, the country had 75 entities and 25 cantons – all of which produced their own individual coins. The introduction of the Swiss Federal Constitution of 1848 and the Federal Coinage Act of 1850 ensured that only the Federal government could distribute currency and that the franc became the nationally recognised currency. The obverse of each Swiss franc coin features the bust of a Vreneli head, formally called Helvetia and colloquially referred to as Swiss Miss. The informal name of the coin could originate from “Verena”, a female impersonation of the Confederation of Switzerland, similar to Lady Britannia, the French Marianne or the American Lady Liberty. The effigy on the obverse of the coin was probably modeled by Françoise Engli and could also derive from the novella of William Tell in which he describes a character carrying the name “Vreneli”. The coin is also known as a Helvetia from the inscription above the portrait. The Helvetia figure is often illustrated wearing a tiara with the word “Libertas”, and known as the “Liberty head”. The coins released from 1897 to 1949 were created by Fritz Landry of Neuchâtel, Switzerland. His signature, “F. Landry” is engraved on the coin’s revers under herportrait. The coin’s brilliant design is widely regarded as the most beautiful of any Swiss coinage. It is one of the world’s classic designs used on all gold Vreneli coins, which, as well as a solid investment, are also quite popular among collectors, as their exquisite design and outstanding condition make them a natural choice.

Swiss Franc Design

The obverse of each Swiss franc coin features the bust of a Vreneli, her hair delicately braided and with a garland of flowers at her shoulders. Behind her are the Swiss Alps, and above her the word HELVETIA is inscribed. The edge of the coin is imprinted with stars in relief. The excellent luster and engraving of the Swiss Helvetia supplement the coin’s intrinsic value. The reverse side features the coat of arms of Switzerland that includes the iconic Greek cross over a branch of oak and the Federation ribbons. It is inscribed with the coin’s denomination and date of issue. Here we find the mintmark which is most commonly the letter “B” indicting the coins are manufactured in Bern.

The production of the Swiss Franc coin

The very first Federal coins were minted in Paris and Strasbourg, as Swiss minting facilities were inadequate at the time. In 1853, the Federal Government took over the former mint of the Canton of Bern on a trial basis. The old Bernese mint was renamed the Federal Mint and, from 1890, became an official Federal institution. Within a decade, the technical equipment of the old Mint was no longer adequate to either meet the escalating demand for circulation coins or to satisfy quality requirements that were becoming more exact. The Swiss Federation, therefore, commissioned the building of today’s Mint in Bern’s Kirchenfeld district. This institution was inaugurated on 2nd July 1906.

Swiss Mint Quality Assurance

The official mint of the Swiss Confederation is responsible for manufacturing Swiss franc coins, both for currency and investment purposes. Apart from making coins for the government, the Swiss Mint also manufactures medals and commemorative coins for private customers. Swissmint is an agency of the Swiss federal government. It is part of the Federal Finance Administration, which in turn belongs to the Federal Department of Finance. Since 1998, the Official Mint of the Confederation operates as an independent business unit under the name Swissmint.

Selling Swiss Franc coins

CoinInvest are always eager to hear from visitors with gold and silver bullion to sell. If you have any Swiss Franc coins for sale do not hesitate to contact us and we will put a fixed-price offer together on your behalf. As one of the leading online bullion retailers in Europe, we promise to offer you a competitive price based on the current market rates.

Swiss Parliament Votes in Favor of Crypto Regulations

Switzerland’s lower house of parliament has narrowly voted in favor of introducing cryptocurrency regulations.

Perhaps more importantly, proposals state that cryptocurrency trading platforms should be considered as financial companies, and thus should be policed by the country’s top financial regulator, the Swiss Financial Market Supervisory Authority (Finma).

A total of 99 members of the Federal Assembly’s lower house National Council supported a motion put forward by Giovanni Merlini, the member of parliament for Tessin (also known as Ticino). Merlini’s proposed regulations will now be considered by the parliament’s upper house, the Council of States.

Per media outlet Netzwoche, Merlini argued that cryptocurrencies can be used by criminals in extortion and money laundering schemes, and thus should not be left unregulated in Switzerland.

The vote was relatively close, with 83 MPs opposing Merlini’s plans, and a further 10 abstaining. The move comes as something of a surprise – with the country’s finance minister earlier this week outlining a plan for somewhat more moderate crypto regulations.

Switzerland is considered to be one of the most crypto-friendly countries in the world, and its “Crypto Valley” in Zug is a veritable hub of all things cryptocurrency- and blockchain technology-related. Train passengers can even pay for their tickets in Bitcoin as of November last year, after a successful pilot project, for tickets worth up to USD 500 – as reported by Handelszeitung last year.

There was good news for crypto-enthusiasts elsewhere in Switzerland, however, with the country’s largest e-commerce retailer, Digitec Galaxy announcing it will accept crypto payment in Bitcoin and the following altcoins: Bitcoin Cash, Bitcoin SV, Ethereum, XRP, Binance Coin, Litecoin, Tron, OmiseGo and NEO. However, per media outlet Watson, customers wishing to pay in cryptocurrencies are only free to do so on orders worth 200 Swiss francs (approximately USD 200) or more.

This year could be a busy one for cryptocurrency regulations in Europe, with politicians in Germany, France, the UK, Russia and beyond all set to look at the way their financial bodies police cryptocurrency and fintech-related activities.

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