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gnosis

Chf Ultimate Safe Haven

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http://www.financialpost.com/money/Swiss+franc+ultimate+safe+haven/4030958/story.html

Is CHF really the best safe haven? what about AUD and other commodity currencies, surely these are a safer bet? what does Switzerland make anyway other than cuckoo clocks, fine chocolate and watches? I like gold but can't fail to notice that gold in CHF terms is actually 100 francs lower than it's peak in the summer?? should we be looking at chf instead of gold?

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this got moved very quick!

didn't the SNB fail previously trying to lower it and it didn't work? why would it work now?

I find that the SNB was pretty trigger happy with its own printing press and so stay away from it. The current strength could be a reflection of some form of capital flight in advance of expected capital controls (e.g. buy at any price)?

Edited by _w_

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http://www.financialpost.com/money/Swiss+franc+ultimate+safe+haven/4030958/story.html

Is CHF really the best safe haven? what about AUD and other commodity currencies, surely these are a safer bet? what does Switzerland make anyway other than cuckoo clocks, fine chocolate and watches? I like gold but can't fail to notice that gold in CHF terms is actually 100 francs lower than it's peak in the summer?? should we be looking at chf instead of gold?

Gold is the Universal Currency, why bother with inferior products?

Sure you can make an absolute mint shuffling one pile of paper to another as the race to the bottom continues, but you have to know what to hold and went to hold it.

Any country that takes steps to devalue its currency isn't a country I'd feel happy about putting my money in, which is virtually all of them right now. Nobody can devalue Gold, it is what it is and as one nation after another goes to the wall its value will increase against all fiat currencies.

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http://www.financialpost.com/money/Swiss+franc+ultimate+safe+haven/4030958/story.html

Is CHF really the best safe haven? what about AUD and other commodity currencies, surely these are a safer bet? what does Switzerland make anyway other than cuckoo clocks, fine chocolate and watches? I like gold but can't fail to notice that gold in CHF terms is actually 100 francs lower than it's peak in the summer?? should we be looking at chf instead of gold?

Point of order -- Switzerland does not make cuckoo clocks. They are a speciality of Austria and southern Germany, but for some reason people think they are Swiss.

As to what they make, the answer is not a lot in terms of manufacturing -- at least not that is exported. Switzerland is extremely stable, however, The Swiss don't believe in borrowing. Credit cards exist but they are not used anything like as much as elsewhere. Home ownership is about 22%. Earnings and savings are higher than just about anywhere else in the world. Political system very stable. Not in the EU of course. Inflation and unemployment very low - around 2%.

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Point of order -- Switzerland does not make cuckoo clocks. They are a speciality of Austria and southern Germany, but for some reason people think they are Swiss.

As to what they make, the answer is not a lot in terms of manufacturing -- at least not that is exported. Switzerland is extremely stable, however, The Swiss don't believe in borrowing. Credit cards exist but they are not used anything like as much as elsewhere. Home ownership is about 22%. Earnings and savings are higher than just about anywhere else in the world. Political system very stable. Not in the EU of course. Inflation and unemployment very low - around 2%.

Just as a matter of intrest, who does own the houses of the other 78%. It always makes me wonder whether the place is full of social tenants, or private tenants. Who are these big landlords? Is it a good thing not to own your home? Are they all just pissing their money away on rent. I notice that when anyone from abroad moves there , they always buy a house.

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Just as a matter of intrest, who does own the houses of the other 78%. It always makes me wonder whether the place is full of social tenants, or private tenants. Who are these big landlords? Is it a good thing not to own your home? Are they all just pissing their money away on rent. I notice that when anyone from abroad moves there , they always buy a house.

Very few people who move there buy a house, unless they are very wealthy people fleeing the UK (or elsewhere), in which case they are allowed to circumvent the system. For most ex-pats on a standard B or L permit, there are restrictions on property buying which are eventually relaxed if you stick around long enough. Once you're eligible, you can start planning how to pay the minimum 20% deposit. Given that most decent properties start around the £600K mark, this is quite an obstacle.

Who owns the properties? I can't answer that, but the apartment I live in, and the one that my workmate lives in (in another town), are both owned by Credit Suisse. So perhaps a lot of property is owned by institutions?

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Very few people who move there buy a house, unless they are very wealthy people fleeing the UK (or elsewhere), in which case they are allowed to circumvent the system. For most ex-pats on a standard B or L permit, there are restrictions on property buying which are eventually relaxed if you stick around long enough. Once you're eligible, you can start planning how to pay the minimum 20% deposit. Given that most decent properties start around the £600K mark, this is quite an obstacle.

Who owns the properties? I can't answer that, but the apartment I live in, and the one that my workmate lives in (in another town), are both owned by Credit Suisse. So perhaps a lot of property is owned by institutions?

Interesting. So the swiss are a nation of tenants. And unless they are on huge saleries it is out of reach to own a house, except for the richest, or top22%. I oftem wondered on my camping holidays why there were quite a lot of people apparently living permanently on camp sites, is various constructions and caravans. They must have very large pots of savings/pensions, if they dont put money into property. It seems on the surface to be a two tier society. Or am i not seeing the place correctly?

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Interesting. So the swiss are a nation of tenants. And unless they are on huge saleries it is out of reach to own a house, except for the richest, or top22%. I oftem wondered on my camping holidays why there were quite a lot of people apparently living permanently on camp sites, is various constructions and caravans. They must have very large pots of savings/pensions, if they dont put money into property. It seems on the surface to be a two tier society. Or am i not seeing the place correctly?

Forgive me, but I'm not certain what you're asking.

Regarding "the swiss are a nation of tenants" - yes, that is correct. Indeed most of mainland Europe are nations of tenants. The mania for ownership is quite a British/Irish thing.

Yes, you have to earn a fair whack to consider buying.

But then I lose you. I'm not aware of a large population, or any population, of permanent campers or caravaners. Do you mean something like trailer parks in the US? If so, no way. Not in Switzerland. People earn decent salaries (even for stacking supermarket shelves) and there is no homelessness or even any significant underclass. The big majority rent, and seem to be happy to do so.

It's not really a 2 tier society. Well, yes, there are loads of very rich people, and then the rest of us. But 'the rest of us' are quite comfortable really. There is of course a low-earning stratum, and I don't want to pretend they don't exist, but compared with the UK and US, and other nations, it's small.

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Forgive me, but I'm not certain what you're asking.

Regarding "the swiss are a nation of tenants" - yes, that is correct. Indeed most of mainland Europe are nations of tenants. The mania for ownership is quite a British/Irish thing.

Yes, you have to earn a fair whack to consider buying.

But then I lose you. I'm not aware of a large population, or any population, of permanent campers or caravaners. Do you mean something like trailer parks in the US? If so, no way. Not in Switzerland. People earn decent salaries (even for stacking supermarket shelves) and there is no homelessness or even any significant underclass. The big majority rent, and seem to be happy to do so.

It's not really a 2 tier society. Well, yes, there are loads of very rich people, and then the rest of us. But 'the rest of us' are quite comfortable really. There is of course a low-earning stratum, and I don't want to pretend they don't exist, but compared with the UK and US, and other nations, it's small.

OK, maybe its my observations that are mistaken. Its just that i have been on camping trips there several times of late, and noticed on several sites a larger number of what seemed like permanent residents, and caravans which appeared to of fixed use. Not exactly trailer parks, more like living below the radar. Maybe i am mistaken, but with 78% looking for a place to rent, its possible. But as i say, just an observation. As an aside, do you happen to know what the average working swiss does invest in if its not a house?

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OK, maybe its my observations that are mistaken. Its just that i have been on camping trips there several times of late, and noticed on several sites a larger number of what seemed like permanent residents, and caravans which appeared to of fixed use. Not exactly trailer parks, more like living below the radar. Maybe i am mistaken, but with 78% looking for a place to rent, its possible. But as i say, just an observation. As an aside, do you happen to know what the average working swiss does invest in if its not a house?

Equally,I may be wrong, but am certainly not aware of a big population of people living 'below the radar'. Average salaries are relatively high and unemployment is low (about 2%). Unless you're trying to rent a small cheap apartment in Zurich or Geneva, it's not hard to find somewhere to live.

The Swiss are very very cautious with their money, and are big savers. I think most of it goes into pensions and into a general rainy day fund. Very few people seem to run up credit card bills or use credit of any kind, so they tend to save for holidays and cars before they buy them, unlike the UK.

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Interesting. So the swiss are a nation of tenants. And unless they are on huge saleries it is out of reach to own a house, except for the richest, or top22%. I oftem wondered on my camping holidays why there were quite a lot of people apparently living permanently on camp sites, is various constructions and caravans. They must have very large pots of savings/pensions, if they dont put money into property. It seems on the surface to be a two tier society. Or am i not seeing the place correctly?

We considered buying when we moved here end of 06 but in the end we came to the conclusion there was no benefit to tying up money that way

The reason for most renting here are mostly to do with and shows the power of taxation and its dangers

1 Most people in Switzerland feel no need to own because rental laws is quite strong in favour of the tenant

2)Rents are stable as its not a free market, its very difficult for rents to be increased excessively the longer the tenant stays

3) The landlords are mostly institutions rather than cowboys and their are strict standards to meet

4) Inflation, this is quite important, switzerland is historically a small govt, therefore low inflation country, the govt doesnt try to force inflation as a stealth tax

this is highlighted by the fact that over the last 30 years the chf has gone from 8 to 1 to currently 1.45 to 1 gbp. The low inflation together with good pensions and negligable rent increases means there is little risk of not being able to afford rent in later years (i think this is a massive driver in the uk)

5) most importantly tax, there is no real benefit to ownership due to property taxes which are alot higher than taxes on other forms of investment such as stocks, bonds (theres no Cap gains here other than on property). There is also a wealth tax over here on all net assets so you cant hide your wealth in property, and for landlords tax on rental income can be as high as 50%

So basically there is no point to buying, compare that to the uk where there has always been higher inflation, then Brown taxing Divis, basically in the uk the best form of investment to avoid tax/inflation is property so thats where the money has gone for 30 years, here the best form of investment is business so thats where money goes. It shows very clearly the power of govt tax policy in being able to force malinvestment.

Is the chf safe, who knows, there are clearly potential issues with Credit Suisse and UBS if there is another downturn but it is probably by far the safest currency in Europe because of the political and therefore tax system here

Edited by Tamara De Lempicka

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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