Immigration Restriction On the Ballot in Switzerland

Swiss right-wing party hands in initiative to limit immigration

The Swiss People’s Party submitted 114,600 signatures to the federal chancellery in Bern on Wednesday. It demands that a new article on “sustainable population development” be added to the constitution.

According to the initiative, the population of permanent residents must not exceed ten million people before 2050. The government should then set a limit based on the birth rate. If 9.5 million people live in the country before 2050, the Federal Council and Parliament would have to act.

For example, temporarily admitted persons would then no longer be able to obtain a permanent residence permit. Family reunification is also to be restricted. International agreements with exemption or protection clauses would have to be renegotiated. If all this is not enough, the Agreement on the Free Movement of Persons with the European Union would have to be cancelled.

Short the Swiss

In the Yen, Euro and Franc Signaling Market Shift post, I looked at the Swiss franc breaking out versus the euro. A chart of the iShares MSCI Switzerland ETF (EWL) looks much different, a wedge pattern waiting to break.

The wildcard for Switzerland is the SNB buying up stocks like Apple. I haven't calculated how much a 40-50 percent haircut on their stock holdings would impact the central bank's balance sheet, but maybe that is a number that will go viral soon.

Central Planning: Hebei Turns From Steel to Private Banking

FT: Hebei targets private banking future as steel industry wanes

Hebei province has launched a campaign to attract private banking talent and investment, joining other manufacturing regions in the country striving to upgrade from heavy industry to higher-growth areas such as internet technology and wealth management.

But the push into high finance also risks spurring a build-up of unnecessary office space and dormant central business districts, a trend already emerging in cities across the country.

The government is working with the Swiss government, a plus.

However, the province has no clear advantages in private banking over other finance centres in China such as Beijing and Shanghai.

Swiss Vote on Monetary System

Swiss voters have the option of ending the modern credit money system controlled by banks and replacing it with a government controlled fiat money system.

CNBC: Switzerland is set to vote on a radical 'sovereign money' plan: Here’s what you need to know

Supporters of the initiative, known as the "Vollgeld" or the Sovereign Money Initiative (SMI), say approving the measure would make the financial system safer by preventing bankers from recklessly lending and putting people's savings at risk — again.

That's because the change would make it much harder for commercial banks to extend credit, effectively creating cash. Instead, the Swiss National Bank (SNB) would become the monopoly provider of Swiss francs.

However, opinion polls indicate SMI will not receive enough votes to pass. Around two-thirds of the Swiss electorate is expected to vote against the plan, which SNB Governor Thomas Jordan has described as a "dangerous cocktail."

This replacement doesn't sound like a great idea.

Martin Wold at FT supports change: Why the Swiss should vote for ‘Vollgeld’

So how does this industry create mayhem on this scale? And why is it allowed to do so? It does so — and is allowed to do so — because, as the Bank of England has explained, banks create money, which is an essential public good, as a byproduct of their lending, which is an important economic good. We want banks to have risky assets and safe liabilities. Yet the liabilities of a highly leveraged, risk-taking institution cannot be safe and will unavoidably seem least safe during a crisis. Yet it is then that people want their money — their reserve of purchasing power in a frightening world — to be at its safest.

Worse, it is often easiest for banks to justify lending more just when they should lend less, because lending creates credit booms and asset-price bubbles, notably in property. The willingness of the public to treat bank liabilities as stores of safe purchasing power provides stable funding, until panic sets in. To reduce the likelihood of panic, governments insure bank deposits, liquidity and even solvency. That makes crises rarer, but bigger. The authorities are simultaneously supporting banks and reining in the excesses created by support. This is a system designed to fail.

There are many other ideas in this broad area that seem worth pursuing. One would be to allow every citizen to hold an account directly at the central bank. The technological reasons for branch banking are, after all, perishing quickly. Nicholas Gruen, an Australian economist, has argued that no private institution should have better access to the public’s central bank than the public itself does. Furthermore, he adds, the central bank could operate monetary policy by lending freely against safe mortgages. The central bank would not need to lend to banks per se at all. It would focus on assets.

This last idea would quickly end immigration in many countries, since expanding the population would dilute ownership claims. One solution on the way from private markets will be a similar approach through the blockchain. The money supply and "central bank" such that such an entity exists, will be privately owned. Anyone will be able to buy a share, but those without a stake in the system will have no shares, or at least no voting rights.

Swiss Gold Exports to USA Explode

Chinese are intrigued by this story posted at ZeroHedge: "An Extraordinary Development": Record Swiss Gold Flow Into The United States

However, something motivated this huge trend change in normal gold movements to Switzerland. Moreover, total U.S. gold imports in may shot up to 50 metric tons, almost double the 26.5 mt figure in April. In addition, total U.S. gold exports hit a low May as only 20.2 mt were shipped to foreign countries. Total U.S. gold exports Jan-May 2016 of 139 mt are down 28% compared to 195 mt exported during the same period in 2015.

So what’s going on here? Why the declining U.S. gold exports or surging gold imports from Switzerland? Are foreign countries demand less gold?? I doubt it. Or how about the massive increase in supposed gold flows into the Global Gold ETFs & Funds?? While there is no way of knowing how much gold these Gold ETFs & Funds hold, something seriously changed in May as the Swiss exported more gold to the U.S. in one month than they have every year for several decades.

Are wealthy Americans finally acquiring a lot more gold?

It will be interesting to see that data for the next few months when the USGS releases their Gold Mineral Industry Surveys.

iFeng: 外媒：瑞士黄金出口量翻50倍 全都流向美国？

Swiss Watch Sales Slump

Bloomberg: Swiss Watch Quarterly Exports Decline the Most Since 2009

Waning demand in Hong Kong and China has spread to other Asian markets such as Singapore, South Korea and Taiwan, weighing down an industry that accounts for a 10th of Switzerland’s exports. The nation’s watch executives are the most pessimistic in four years as an increasing minority sees a threat from smartwatches, a Deloitte LLP report showed last month.

Electoral Roulette Continues: Canada Turns Left; Swiss Turn Right

Where voters have viable options to move right, they are doing so, but where they do not, they'll settle for tossing the ruling party out of power. Electoral roulette continues.

BBC: Canada election: Liberals sweep to power

During the 11-week election campaign, the Liberal Party said it would:

Cut income taxes for middle-class Canadians while increasing them for the wealthy

Run deficits for three years to pay for infrastructure spending

Do more to address environmental concerns over the controversial Keystone oil pipeline

Take in more Syrian refugees, and pull out of bombing raids against Islamic State while bolstering training for Iraqi forces

Legalise marijuana

Reuters: Anti-immigration SVP wins Swiss election in swing to right

The election gains for the SVP, which was already Switzerland's biggest single party, come 20 months after the Swiss in a referendum backed limits on foreigners living in the Alpine nation. The SVP had strongly supported the restrictions.

Lawmakers have until 2017 to reconcile this referendum result with an EU pact that guarantees the free movement of workers, otherwise the Swiss government must write quotas into law regardless of any compromise with the EU.

The Swiss system of direct democracy means citizens decide most major issues in referenda regardless of parliament's makeup.

But the latest right-wing gains should keep pressure on Bern to take a hard line with Brussels as it seeks to implement the immigration referendum.

Swiss Franc Surge Hits Eastern European Borrowers Again

Swiss franc bounces to all-time high against zloty

On Thursday morning, the franc shot up to over PLN 5.19, the highest exchange rate of the two currencies in history. By the afternoon, the rate had settled at around PLN 4.23, however.
The market response was caused by the Swiss National Bank, which discontinued its minimum exchange rate to the euro, which was at CHF 1.20.

This is very bad news for borrowers.

Eastern European Currencies Dive as Swiss Loan Costs Hurt Banks

The Swiss National Bank’s unexpected decision to scrap its minimum exchange rate will elevate the cost of paying off loans, including mortgages, in francs. Poles and individuals in countries such as Hungary and Romania borrowed francs in the run-up to the 2008 financial crisis because the interest rates were cheaper, only to get stuck with higher financing costs as price swings accelerated.

“This will be a painful year for Polish households with Swiss franc loans,” Piotr Matys, an emerging-markets foreign-exchange strategist at Rabobank International in London, said by e-mail. The zloty’s weakening “might fuel concerns about financial stability in Poland,” he said.

Swiss franc shock triggers mortgage panic for wealthy homeowners

"While there won't be many people who have newly taken on such mortgages, there will still be some who hold that debt," he said. "Following falls today, these loans will be 12pc more expensive."

Swiss franc denominated mortgages are held by property investors across the world with many Chinese, Middle Eastern and Russian buyers parking money in Switzerland to purchase a second homes in luxury destinations such as Monaco.

Hungary may be insulated. One reason why the Fidesz party has been popular is that it sided with Hungarian borrowers against foreign banks.

From summer 2014: Hungary's Currency Weakens on Government Plan to Convert Loans

The forint weakened as implications of the government's plan to convert foreign-currency loans into forints at below-market rates sunk in, said Peter Attard Montalto, economist at Nomura.

"The market's finally waking up to the fact that the government is doing this, regardless of what the banks think," he said.

Today:
Swiss franc surge hits emerging Europe bank sector

Hungary already got ahead of the curve last year by fixing exchange rates for many borrowers who had taken out mortgages in Swiss francs to capitalize on low interest rates, only to lose out when the franc surged during the financial crisis.

The banks that issued those loans had to pick up the bill for fixing the rates, but a Hungarian market source said they were safe too because they had already converted their Swiss francs into forints last year and closed their positions.

"God is with us," the market source said, when asked about the timing of the conversion.

Switzerland shuts the door

Switzerland shuts the door on EU migrants: A new 'us vs. them' in Europe?

As I happened to be standing in the most intolerable immigration line that I've ever faced – more on that later – I read on my Twitter account that the Swiss government on Wednesday announced a new policy to cap residence permits for all of Western Europe. Switzerland, which is not part of the EU but joined the Schengen bloc that allows freedom of movement of people across European borders, says that it is being overwhelmed by arrivals from across the continent, to the tune of 80,000 people each year.

The U.S. is going to shut the door as well if amnesty passes. A majority of Americans want restrictions on legal immigration, and when the amnesty reveals not 12 million illegals, but more like 20-25 million, the American people will say enough and shut the door.

Swiss politician says country has too many Germans

The immigration debate rhetoric is heating up in Europe. I don't place too much stock in this one comment (today), but it does show where the social mood is at since these types of comments are aimed at shoring up a politicians base.

Politician Sparks Uproar with Call to Limit German Workers

A Swiss politician has prompted a heated debate after suggesting that there are too many German immigrants in her country. "We really have too many Germans in the country," Natalie Rickli, a member of Switzerland's parliament with the right-wing populist Swiss People's Party (SVP), said during a television talk show on Sunday.

The actual topic of discussion on the talk show, broadcast on Zürich local television station TeleZüri, was supposed to be Switzerland's decision last week to curb immigration from eight central and eastern European countries. Last Wednesday, the Swiss cabinet, the Federal Council, announced it had decided to invoke the so-called "safeguard clause" in its agreement with the European Union on the free movement of persons. The move will significantly reduce the number of jobseekers from these countries allowed to enter Switzerland for a one-year period.
But that initiative apparently does not go far enough for Rickli. On the talk show, she argued that the safeguard clause should also apply to Germans. Many people shared her view that there were "too many Germans" in Switzerland, she said.

The other guests on the show reacted with shock, but Rickli kept going. "The parliament should have already activated the safeguard clause in 2009, when it would have also affected the Germans," she said, adding that Switzerland had a problem with the sheer scale of immigration. She said that she had already received a lot of mail from Swiss people saying that they had lost their jobs because cheaper Germans had been hired instead.

Rickli's comments reflect her SVP party's anti-EU and anti-immigration policies. Although it suffered a slight drop in support in the most recent election, the SVP has risen to become the strongest party in Switzerland since the 1990s. On the day after her talk show appearance, Rickli said that she had gotten many positive reactions to her proposal.

Many politicians and pundits incorrectly ascribe racial or ethnic motivations for anti-immigration sentiment, but since Switzerland is a nation of mixed ethnicity including Germans, it is another sign, along with the case in Hong Kong versus Mainland Chinese, that there's a much deeper sentiment of us versus them at play, one that even crosses all racial and ethnic lines. It doesn't matter what culture, race, ethnicity, language, whatever an outsider brings, it is the fact that they are viewed as an outsider.

What are human rights?

During rising and peak social mood, the definition of human rights was stretched as broadly as possible. Even minor attempts to curtail these rights were seen as racist or xenophobic. Now, the previously racist and xenophobic ideas are winning victory after victory. The latest comes from Switzerland:

Swiss voters approve harsher deportation plan

Swiss voters have approved a far-right initiative to automatically expel foreign residents convicted of serious crimes, according to poll results.

Swiss national broadcaster SF1 said 52.9 percent of voters backed the initiative in Sunday's referendum, a plan proposed by the nationalist Swiss People's Party (SVP).

A counter-proposal put forth by the Swiss government, which would make expulsion dependent on the length of a prison term rather on an arbitrary list of offenses, appears to have been rejected by most voters, according to preliminary results. Currently, decisions to expel foreigners convicted of serious crimes are made on a case-by-case basis.

The initiative, which would apply to foreigners convicted of crimes like murder, rape or trafficking in drugs or people, has been criticized by human rights groups and legal experts, who said it could disregard international anti-discrimination treaties and the free movement of peoples under European Union law.

Rapists, murders, drug and sex traffickers can now be deported from Switzerland following their conviction. However, note that the news says this was a victory for the far-right. Objectively, this seems like a moderate, albeit strict, law. What this shows is not the radicalism of the far-right, but how far left society shifted during the long period of positive social mood. The mainstream of political leadership went so far in the other direction, that the far-right is now the sensible center. Should social mood remain negative or decline, the far-right will win increasing large vote shares (eventually winning pluralities or outright majorities), in Switzerland and around the globe.