Today the man who remarkably predicted the collapse of the euro against the Swiss franc just 45 days ago shares more shocking predictions for 2015 with King World News. This interview takes a trip down the rabbit hole of central bank lies and deception and eventual collapse.
Greyerz: “Eric, what a day. Currency wars in 2015 are starting with a massive capitulation of the Swiss National Bank. As I have predicted for months, the SNB finally released the peg between the euro and Swiss franc at 1.20. This caused massive moves in the currency markets as well as massive losses for the Swiss National Bank….
“The SNB has also increased the negative rates from minus 0.25 percent to minus 0.75 percent. Swiss francs now have negative yields going out 9 years. The Euro/Swiss franc went down by the maximum 30 percent. 30 percent is an enormous move.
There Was No Price And Panic Ensued At Swiss Banks
Of course there were stops in the market and the stops were triggered at the very low of the collapse because there was no market — there was no price. Nobody could do anything. What banks could do was take out positions at the lows, so people will have lost 30 percent on the Euro/Swiss, which everyone thought was such a safe peg because that’s what the Swiss National Bank had said.
The Swiss franc also soared 25 percent against the U.S. dollar. The dollar has recovered a bit, now down 13 percent. But once again, people who had stops in the market will have been taken out at the lows and will have lost 25 percent on those positions. In the panic, Swiss ATMs stopped dispensing euros because there was no price in the market.
Hedge Funds Brutalized And Swiss National Bank Suffers Massive Losses
There is no doubt that some hedge funds were brutalized on the Swiss franc move. The Swiss National Bank has just suffered losses of 80 billion Swiss francs — that’s over 10 percent of Swiss GDP.
So, Eric, all arguments and propaganda by the Swiss National Bank during the Swiss Gold Initiative were total lies. The Swiss National Bank said the Gold Initiative was ‘dangerous because the peg would not hold if the Gold Initiative was passed.’ They also said they ‘will use any means to defend that peg for future years.’ They also said there would be ‘massive job losses if the initiative passed.’
Nightmare Prediction Of Euro/Swiss Franc Collapse Unfolds Within 45 Days
I wrote a fictitious memo from Thomas Jordan, the President of the Swiss National Bank, and published it on December 1st. This is a quote from that piece and this is what Thomas Jordan said:
“The reason I’ve been so nervous about the referendum is that the (Swiss National) Bank is now sitting on the biggest speculative currency position of any major central bank in the world. Our balance sheet is 522 billion Swiss francs and over 80 percent of Swiss GDP, which is an extremely dangerous position for our country. It’s virtually impossible to get out of this position without a loss of tens of billions of francs or even as much as 100 billion.”
“The 1.20 peg is artificial and throughout history no currency peg has ever held in the longer-term. Our 470 billion Euro/Swiss franc speculative position is a time bomb and we know we will never be able to extract from it without major losses. Hopefully the current board will have retired from the (Swiss National) Bank before his happens.”
Eric this is what I wrote on December 1st as a fictitious memo and this is exactly what has happened. It was totally predictable. But the Swiss National Bank was in total denial about this. And now they are sitting on losses of at least 80 billion Swiss francs.
Just The First Shocking Surprise In 2015
But, Eric, this is just the first shocking surprise in markets in 2015. We will see many more of these type of currency revaluations in the future. We will also see similar moves in bond markets and stock markets this year and in coming years. Investors who are not prepared will see disastrous results in their portfolios.
The SNB was probably aware of a massive QE program about to be announced by the ECB next week. This is probably why they pulled the trigger now on the peg because they would have lost a lot more money next week. This is why they decided to cut their losses now at the 80 – 100 billion Swiss franc level.
One Last Chance For Investors
Investors in the West now have a last chance to protect their wealth before the carnage starts because wealth destruction will be massive and unprecedented. When the more than one quadrillion dollar derivatives time bomb explodes it will be too late to do anything.
Gold has already broken out in most currencies and now it’s on the verge of breaking out in dollars as well. We will see major upside moves in gold and silver in 2015 and in coming years. I would expect gold to advance several hundred dollars in the coming months and silver to the $25 to $30 level. So this is the last time that investors can get in at highly discounted prices in precious metals.”
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