This is a lesson in why central banking does not work, that these types of monetary policies are doomed to fail, that the central banks were trying to swim against the tide and eventually they had to give it up. And this is going to happen with all these managed exchange systems. In fact, Switzerland is a small microcosm of the bigger peg-relationships that are going to end and when they do it will be much more spectacular. This was a tremor. When the Chinese decide to abandon their peg both for the Hong Kong dollar and the Yuan, that is going to be a 10.0 on the Richter scale of economic activity. It is going to be huge!
Related trading instruments: Swiss Franc, EURCHF, Euro Currency, Hong Kong Dollar, Chinese Yuan
Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.
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