Tag Archives: Switzerland

Not so long ago, I was working in Riethem-Weilhem Germany for the Germans, of course. A smaller ($1 billion) automotive company. My US position was in Cazenovia, NY where the Rockefellers used to hang out in their mansion on the south end of Lake Cazenovia. It is now called the Brewster Inn. While in Germany, they gave me a car and I would go touring all over southern Germany and into Switzerland. They would send me to the Czech Republic to visit...

George Dorgan shows that Gross Domestic Product (GDP) is a measurement in the local currency. Effectively, Swiss real GDP rose by 15% in Euro terms, but fell slightly in CHF. He also emphasizes that Switzerland needs a big rebalancing of its economy, away from exports towards consumption. The Swiss National Bank was right to remove the euro peg. The move towards consumption is only possible when the Swiss franc is stronger because consumers will profit on it.

We show the two phases or "two innings" of Swiss franc appreciation: The risk aversion game and the inflation game. With the weakening of emerging markets and the strengthening of the United States in 2013/2014, the Swiss National Bank (SNB) had won the first battle in the war against financial market, the "risk aversion game", the first inning in two-part match. Risk aversion is lower because the United States recovered with weaker oil prices. The "inflation game" started earlier than we...