The Bigger Picture of the Swiss Gold Initiative (Audio)

Mises Institute President Jeff Deist interviewed Claudio Grass, Managing Director of Global Gold, about the Swiss gold initiative taking place this Sunday. Grass provided insights into the mind of the average Swiss citizen, while discussing the following topics:

Highlights from the interview:

Grass: I don’t see any problem with 20% [of the Swiss National Bank’s reserves being in gold]. The biggest argument has been that the SNB is not allowed to sell any gold reserves in the future. A lot of people who don’t understand that gold is money and that gold is also the superior currency, even as per Alan Greenspan… He came out saying that gold is a very good investment and he also explained why central banks held physical gold as a insurance against US dollars and the whole fiat money system.

A lot of people they basically just saw gold as a reserve and we buy it as an insurance… [But] they don’t understand how the paper money system came into existence… Gold has been money for three thousand years, and I’m sure because of that it will stay another few thousand years… They don’t understand that when you buy physical gold you basically back up the Swiss franc. The more gold we have, the stronger the Swiss franc gets…

Deist: Peter Schiff describes the peg as the de facto adoption of the euro by the SNB. With that comes an importation, in effect, of ECB inflation. Do you think average Swiss understand that SNB policy of weakening the franc hurts them?

Grass: First of all, Schiff – I fully agree with him. Secondly, yeah. A lot of Swiss people realize that the money is losing purchasing power. They even now realize that it’s an ongoing redistribution… When you look at who is pro gold and who is against gold. The more you go lower in the hierarchy and you get closer to the average Swiss worker, they are pro gold. The higher you go up into the hierarchy… the more they’re against gold. The normal people realize they’re not better off… To rent an apartment, these prices are increasing. Health care and insurance are increasing. They even see we have higher food prices, for example. They don’t buy the official data from the SNB that we have zero percent inflation…

I found a lot of people, even working in the banking system, they were telling me this: ‘Don’t tell anyone, but I vote pro-gold, because it’s insane. You cannot fight over-indebtedness with even more debt.’ They also understand that by printing money you don’t increase your personal wealth. They understand that it’s basically just depreciating the currency and reducing your purchasing power…

Deist: This referendum seems to be about more than just having the SNB hold more gold. It almost sounds like this is fundamentally about Swiss neutrality, about Swiss identity, about Swiss wealth, and about Swiss independence from the rest of Europe. Would you agree that there’s a bigger picture here?

Grass: … We are importing inflation, and we basically give a lot of wealth of the Swiss people to the eurozone. We’re basically supporting the eurozone by buying those debt papers. But we still have the direct democracy in place… Up to today, still the majority of Swiss people are against us joining the European Union. That hasn’t changed at all…

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