Will China Pull a “Switzerland” on the U.S. Dollar?
The Peter Schiff Show Podcast
Peter Schiff
4.6 • 5.9K Ratings
🗓️ 17 January 2015
⏱️ 24 minutes
🧾️ Download transcript
Summary
* Thursday, January 15, will be remembered as the day Switzerland abandoned its peg to the Euro
* The Swiss defended their policy to peg to the Euro, but suddenly reversed, limiting their losses
* They admitted they were wrong
* Although the Swiss stock market went down in their currency, it was up in every other currency
* Gold is up against everything except the Swiss franc
* The news in the Swiss market will be a tremor compared to the earthquake if the Chinese abandon their peg both to the Hong Kong Dollar and the Yuan
* America will win the currency war to the detriment of the American people
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Transcript
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| 0:00.0 | Hi everybody, this is Peter Schiff. It is Friday January 16th, 2015. Yesterday, Thursday, |
| 0:08.8 | January 15th, I don't know if it's a day that will live in infamy, but certainly in the |
| 0:13.5 | minds of some of the foreign exchange traders and some of the companies that allow people |
| 0:18.0 | to trade foreign exchange that may have went bankrupt yesterday. It will certainly be |
| 0:22.6 | a big day in the global foreign exchange markets because yesterday was the day where Switzerland |
| 0:29.1 | dropped the bombshell into the Forex markets, surprised everybody by abandoning its peg to the |
| 0:37.5 | euro, the 120 to 1 relationship that was established about three years ago, and just recently, the Swiss |
| 0:45.7 | dug in their heels and said, we will defend this till the end. Of course, you have to say that |
| 0:51.8 | because they had shown any signs of weakness. There would have been an avalanche of buying of Swiss |
| 0:56.7 | ranks. Of course, they had to act that way even if they were planning at that time to give up the |
| 1:03.2 | peg. But this was also part of the propaganda effort to get the Swiss not to vote for the |
| 1:12.2 | Sabar Swiss goal because they wanted to keep this peg and they surprised everybody and they gave it up. |
| 1:18.6 | Now, of course, it didn't surprise me. I mean, I was surprised that they did it yesterday. I didn't |
| 1:23.6 | know when they would do it. I knew they would. I've been expecting this from the very beginning. If you go |
| 1:28.9 | back to the first day when the Swiss announced this policy, I said at the time it was a big mistake |
| 1:36.4 | that Switzerland would regret it and they would ultimately abandon the peg when they had thrown too much |
| 1:42.9 | good money after bad. When they had lost enough Swiss ranks, blown enough wealth, buying up euros, |
| 1:48.9 | they would eventually throw in the towel and that is exactly what they did. Of course, they've lost tens of |
| 1:55.1 | billions on their foreign exchange reserves. But why did Switzerland decide to bite the bullet now |
| 2:02.0 | and accept those losses? Because waiting would mean even bigger losses in the future. The longer they |
| 2:08.4 | waited, the more they were going to lose. So they cut and run. They did what a lot of traders |
| 2:14.2 | are reluctant to do. They limited their losses. They also did something that few central banks do. |
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