Swiss elections, gold, currency and such...

With the prospect of the ECB engaging in full-blown quantitative easing in the coming months, it is possible that the SNB will have to buy up more euros to keep it above the 1.20 franc cap. If this were to be the case, a vote in favor of the “Save Our Swiss Gold” campaign would have meant further gold purchases to maintain the 20pc quota. The sales ban would mean gold making up an increasing proportion of the central bank’s balance sheet when it attempts to shrink its euro holdings.  "The resolute ‘no’ to Switzerland’s referendum on re-building its gold reserves is clearer than expected," said Reto  Foellmi, Professor of International Economics at the University of St Gallen. "The result is certainly due to the fact that the Swiss population is largely confident in the monetary policy pursued by the Swiss National Bank.   "It sends a clear sign that there will be no immediate change in Swiss monetary policy."   Recent opinion polls predicted that the motion would be defeated, but the price of gold may fall further on Sunday’s confirmation.  Voters also strongly rejected strict limits on immigration that could have threatened Switzerland's relationship with the EU, as well as voting against tax privileges enjoyed by wealthy foreigners.   I note the US Treasury released a statement last Wednesday afternoon revealing that they had been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government. I don’t know how long this international printing money out of thin air (Ponzi Scheme) can go on for, but the Swiss vote notwithstanding, I’m keeping my pile of gold sovereigns safely tucked up in my mattress...  Gold is mostly a speculative bubble. It's intrinsic value is marginal compared to what it is traded at. The value of Gold largely depends upon the whim of the people who like to own it and the amount of disposable money they possess .If you notice today huge swathes of Indians and Chinese are buying gold. They are only buying because of increased disposable wealth they are generating due to actual economic activity and growth. If that economic activity ceases - gold will lose its value pretty fast.  The situation was the same in ancient times - when kings and local warlords had excess disposable wealth. Those tiny group of people drove gold demand. Today more people are driving the demand - all thanks to increased economic activity. If the world economy collapses gold value will also collapse along with it.  Gold value depends on economic activity. If economy grows - the value of gold increases. Or else your gold is only worth the eye of the beholder - glitter. You cannot eat it, nor can make any tools out of it.