In an echo of the recent Scottish independence referendum, a scare campaign by the Swiss National Bank and all of the main political parties is largely to blame for the turnaround in voter opinion from early polls.
The results are in and the people have spoken: Swiss voters have overwhelmingly rejected the “Save Our Gold” initiative that would have repatriated the nation's gold reserves, stopped the Swiss National Bank from selling any more of the reserve, and mandated a 20% gold backing for the Swiss franc.
Despite initial polls showing a surprising early lead for the “yes” camp a month before the referendum took place, in the end it wasn't even close. Voters rejected the measure 77.3% to 22.7%, with the initiative failing to win a majority in favor in even one of the country's 23 cantons. The irony, as ZeroHedge points out, is that even the Associated Press characterized the aim of the initiative as “protecting the country's wealth by investing in gold,” making it all the more puzzling that the voters rejected it so thoroughly.
In an echo of the recent Scottish independence referendum, a scare campaign by the Swiss National Bank and all of the main political parties is largely to blame for the turnaround in voter opinion from early polls. The campaign included “sky will fall” type rhetoric from SNB President Thomas Jordan, who solemnly warned that the initiative's passage would be a “fatal error of judgment.” Predictably enough for a central banker, Jordan insisted the problem wasn't too little but too strong a franc. In other words, Switzerland needs to do some magic money printing of its own so the idea of actually backing their currency with a commodity would be an economic death sentence. Well, a central banker would say that, wouldn't he?
And the Swiss seem to have gone with it. Given the fact that this was a grassroots initiative up against the combined political and banking establishment of the country, perhaps this is not surprising. But when you think of the context of this vote, it's just another sign that there is a growing grassroots concern over physical control of gold reserves across Europe. Germany's ongoing repatriation saga has of course been well documented, but in the days leading up to the Swiss vote the Dutch were surprised to note that they had just received 122 tons from the New York Fed, where they store much of their 612.5 ton gold reserves. Now French grassroots groups are agitating for an audit of their country's 2,345 ton reserve.
It seems the public is no longer buying the establishment propaganda that gold-as-store-of-value is an outdated, irrelevant, 19th century idea.