What's with the US budget and recession stuff?

[KrazyHorse]

cockney, there's no such thing as a cb with a fiat currency trying and failing to reduce the value of their currency*

*unless they are competing with a cb on the opposite side of the cross which is fighting them and which also has fiat currency. this is manifestly not the case with the ECB

[C0ckney]

err...maybe i'm missing something, but it's pretty clear that the SNB has intervened in the currency markets this year and before, clearly with the aim of lowering the value of the franc, and the franc has kept on rising (obviously until the peg was announced). i mean obviously when they have intervened it has lowered the value of the franc, but very soon after each intervention the franc has risen again.

[KrazyHorse]

Halfhearted gestures don't mean ****. As soon as the scb actually decided to do what it took to lower the value of the franc, they succeeded.

The scb can no more try and fail to lower the value of their currency than I can try but fail to not eat sweets; the only possible failure is one of will.

[grumbler]

Halfhearted gestures don't mean ****. As soon as the scb actually decided to do what it took to lower the value of the franc, they succeeded.

The scb can no more try and fail to lower the value of their currency than I can try but fail to not eat sweets; the only possible failure is one of will.

True in the immediate term, as the markets take advantage of the willingness of the SCB to lose money for short-term results, but not true in the long term. In the long term, the only way the SCB can lower the value of their currency is to print enough currency to reduce its value through inflation.

[Kuciwalker]

[Dinner]

Now days central banks can print or unprint money at will simply via computer. They can increase liquidity or remove it simply at the touch of a button.

[KrazyHorse]

True in the immediate term, as the markets take advantage of the willingness of the SCB to lose money for short-term results, but not true in the long term. In the long term, the only way the SCB can lower the value of their currency is to print enough currency to reduce its value through inflation.

Did you comment without reading the thread?

[Ben Kenobi]

therefore they ought to be printing more CHF to meet demand! Aside from satisfying the market's demand they can also reap the seigniorage income.

Which is why the policy will fail. Why not just let it float with market demand? If the swiss can't maintain their high value, than their dollar will drop. If they can, then long term stability would suggest that the market is setting the true value.

I'm not clear how the CHF policy is at all beneficial to them. To the Euro, yes, but not to the CHF.