Swiss Watch Exports Soaring In Crisis Hit Countries

[Trampa501]

Swiss link

So exports of Swiss watches to Italy are up +7.6%, to Spain up +19% and in the UK up +28.4%

I was told this may be down to Russians, who having invested in property are also investing in other elements of fine living...

But it's occurred to me this may also be an inflation-hedge. Gold can be tricky if you need to move quickly, but an expensive watch or two on the arm....

[davidg]

Swiss link

So exports of Swiss watches to Italy are up +7.6%, to Spain up +19% and in the UK up +28.4%

I was told this may be down to Russians, who having invested in property are also investing in other elements of fine living...

But it's occurred to me this may also be an inflation-hedge. Gold can be tricky if you need to move quickly, but an expensive watch or two on the arm....

The main problem is a Swiss watch devalues the day it is bought, they also cost a lot to service. 500 CHF for a Rolex every five years or so. I have a Panerai Luminor (hint, I worked for the company) which is a very nice watch but my 10 euro Lidl digital tells better time.

[onlyme2]

The main problem is a Swiss watch devalues the day it is bought, they also cost a lot to service. 500 CHF for a Rolex every five years or so. I have a Panerai Luminor (hint, I worked for the company) which is a very nice watch but my 10 euro Lidl digital tells better time.

Watches is one area where there is almost no merit in the term "false economy". HIghly prized when you had a timepiece more accurate than your fellow navigator tripping and trading around the world, a lifesaver even, now purely a matter of taste/expense.

[CrashedOutAndBurned]

Investment? Spanish people must fear a Cyprus-style haircut. They may steal your bank balance but they'll never take your Rolex.

[Nuggets Mahoney]

Swiss link

So exports of Swiss watches to Italy are up +7.6%, to Spain up +19% and in the UK up +28.4%

I was told this may be down to Russians, who having invested in property are also investing in other elements of fine living...

But it's occurred to me this may also be an inflation-hedge. Gold can be tricky if you need to move quickly, but an expensive watch or two on the arm....

The more expensive models come in handy as a currency substitute if you're laundering/ moving funds around.

[The Eagle]

So exports of Swiss watches to Italy are up +7.6%, to Spain up +19% and in the UK up +28.4%

In Italy the taxman is cracking down on tax evaders by checking whether owners of luxury cars, yachts and villas have declared enough income to sustain such a lifestyle. Because of this the market for luxury cars has almost died in Italy and loads of second hand Ferraris have been sold for export.

I guess a few expensive watches bought in cash are a convenient way to hide wealth from the taxman as watches aren't registered unlike cars, boats and villas...

[Sour Mash]

A good, high-end watch can hold or appreciate in value.

It's a reasonable store of wealth (and a good punt if you know what you are doing) and is actually somewhat functional too - you can wear it on special occasions or to impress. Plus being a watch means it's easy to discretely carry a store of wealth around on your person if necessary.

There's way too much emphasis these days on cheap(ish) essentially disposable stuff. There are lots of day to day things that can actually represent an investment/store of wealth as well as being functional and improving your quality of life. Secondhand designer furniture for example.

Despite having a strong Franc, Switzerland has been experiencing a trade surplus has it not? It also has practically no consumer price inflation. Meanwhile, with a trashed pound the UK continues to run massive balance of trade deficits and the cost of living has been rocketing for most people. Needless to say, the 'plan' seems to be to trash the pound yet more.

[davidg]

Despite having a strong Franc, Switzerland has been experiencing a trade surplus has it not? It also has practically no consumer price inflation.

It also has a much lower participation rate in higher education. Maybe all those Meejah Studies degrees really are totally worthless. Who would have thunk it?

[The Generation Game]

The more expensive models come in handy as a currency substitute if you're laundering/ moving funds around.

[R K]

Chinese do it to avoid capital/currency controls.

Buy new watches in Yuan, sell them to dealer for $$

It's Switzerland, so there's probably a tax/currency dodge involved somewhere

It's clearly not an inflation hedge since there isn't any. Hence why gold price has crashed.

Edited July 24, 2013 by R K

[The Eagle]

It's clearly not an inflation hedge since there isn't any. Hence why gold price has crashed.

The gold price has gone down due to market manipulation in the paper-gold market, physical gold is currently very hard to get hold of in larger quantities, nobody is selling physical at current prices (except obviously the dealers as long as they can get hold of stock).

It could well be that this is another reason for the increase in watch sales, people buying watches as they can't get hold of gold.

Also the reason gold has been so much in demand in recent years wasn't fear of inflation but rather fear of a complete collapse of paper currencies.

[iamnumerate]

It also has a much lower participation rate in higher education. Maybe all those Meejah Studies degrees really are totally worthless. Who would have thunk it?

See here for why Switzerland has lower unemployment - not likely to be tried here.

http://www.thewelfarestatewerein.com/welfare-benefits/2011/10/what-causes-unemployment.php

This is an unusually easy question to answer. Governments cause unemployment.

How else can one explain why Switzerland, for example, has in the recent past had three per cent unemployment and Spain over 21%?

The time taken per employee to deal with tax in Spain is six times higher than in Switzerland.

In Switzerland, most people do not go to university. A large proportion of those aged around 17-21 go to vocational courses where academic study is combined with working in a relevant company. So, for example, students learn about pharmaceuticals while working in a pharmaceuticals company as a technician. Not surprisingly, after the course they are highly employable in that field.

[Sour Mash]

Worth noting that Switzerland has in comparison to the UK, phenomenally good unemployment benefits. You'll get 70% of your salary for up to 18 months (capped at 75kCHF or so) or 80% (presumably capped a bit higher) if you are married. You do have to pay health insurance and taxes out of this.

You are not forced to immediately take any job - it is permissible to hold out for a comparable position, at least in the early days of unemployment.

You are free to take a low-paid temporary job and then resume unemployment on the same terms as before you took your 'break'.

So assuming you can find new employment within a year and a half, being unemployed isn't a disaster.

After 18 months the the benefit drops massively but if you haven't found something that can beat in within that time, you really haven't been trying hard enough.

[alexw]

See here for why Switzerland has lower unemployment - not likely to be tried here.

http://www.thewelfarestatewerein.com/welfare-benefits/2011/10/what-causes-unemployment.php

*rolleyes*

Just-maybe-perhaps it has something to do with being in the euro and the one size fits all interest rate policy?

Or do you just not do economics?

[@contradevian]

Quasi cash like jewellery. You can always take a decent quality watch into a Pawnbrokers. Came across a "peer to peer" pawnbroker today

[iamnumerate]

*rolleyes*

Just-maybe-perhaps it has something to do with being in the euro and the one size fits all interest rate policy?

Or do you just not do economics?

That is rather rude, particularly as I am anti the Euro.

However it is absence is not the only thing good about Switzerland nor its presence the only bad thing about Spain etc.

The Euro has made things worse but there were problems before hand.

[alexw]

That is rather rude, particularly as I am anti the Euro.

However it is absence is not the only thing good about Switzerland nor its presence the only bad thing about Spain etc.

The Euro has made things worse but there were problems before hand.

Sorry.

I have just grown very very tired of the simplistic "government is evil" mantra.

[okaycuckoo]

But 2 months ago ...

It was a decent run but all good things come to an end. We know China's growth is fading (even by their own official data) but below the surface data suggests things are a lot worse. Between this drop in growth and the rise in anti-corruption practices (that we discussed here) the imports of Swiss-made luxury watches has tumbled 24% in Q1 for the third quarter in a row of declines

.

http://rare.us/story...-on-corruption/

Edited July 24, 2013 by okaycuckoo

[19 year mortgage 8itch]

But 2 months ago ...

.

http://rare.us/story...-on-corruption/

Doesn't the twitpic in the OP say the Chinese market is down 19% in H1?

Seems consistent...

Edited July 24, 2013 by 7 Year Itch

[okaycuckoo]

Doesn't the twitpic in the OP say the Chinese market is down 19% in H1?

Seems consistent...

Hmmm.

The UK increase is about equal to the China + HK decrease.

I suppose the greatest International city in history should have an international currency.

[davidg]

Worth noting that Switzerland has in comparison to the UK, phenomenally good unemployment benefits. You'll get 70% of your salary for up to 18 months (capped at 75kCHF or so)

Same in France, which really can't afford those levels, not with 11% unemployment rising monthly. You don't have to pay health insurance in France, just tax.

Capped at around 6500 euros per month mind.

[19 year mortgage 8itch]

Hmmm.

The UK increase is about equal to the China + HK decrease.

I suppose the greatest International city in history should have an international currency.

I was more surprised by the general trend where the West was up and Asia was down but I suppose, like UK lending figures, you need more than 1 YoY figure to see what's going on, which we don't have.