Switzerland's Long Fight for Fiscal Policy Independence

By Daniel Szewc | Switzerland

Switzerland has long been known for being a fiscally responsible (most often caused by internal competition between the Cantons) banker nation. Yet since the EU has grown in influence, so has their unitarian nature. With this comes an extreme blood-thirst for monotony, as well as a lack of competition.

In March 2011, the European Central Bank in Frankfurt, Germany, pressured the Swiss national bank to cap the swiftly strengthening Franc to the Euro. This was the natural conclusion of Switzerland, which already had ditched the gold standard on the first of May, 2000. How ironic is it, that it happened on the communist holiday of 05/01? This capping, whilst certainly hurting the Franc’s fame as a sure way to keep one’s assets intact in cases of war, lasted for 3 years, until 2014.

In a frantic move by Swiss elites, who sensed that EU leaders were too busy with Middle-Eastern immigrants, tried to also force down the partial re-institution of the gold standard via expanding the national bank’s fractional reserve (modern banking system) banking from an 8% coverage of the Franc’s value in gold to 20%. This would lead to investors being more likely to use the Franc and would help their economy greatly. Yet, as Karl Marx said, “Democracy is the road to socialism”. The referendum failed, with only about 20% of the population voting to support the fiscal counter-revolution.

However, citizens do realize when something was better in the past – there is still hope! Switzerland is going to have another referendum in June, this time proposing the complete abolishing of the Fractional Reserve Banking, and the abolishing of debt currency. The referendum, organised by the Vollgeld Initiative, will have a bigger effect on you than you can imagine.

Right now, a bank may lend you money that it does not have. It “creates” it using computer code, automatically stripping away part of the money’s value, and increasing inflation. All the bank needs to hold is a fraction of the money it lends. This was the reason why many irresponsible banks collapsed in 2008. Most international banks have their main headquarters in the ever-neutral Switzerland. If this referendum gets over half the votes, all of these banks will adopt these rules, making a global difference. Expect the value of money to deflate considerably less.