Jan 16, 2015

Bruce Krasting on central bank omiscience and the abandoment of the euro peg by the Swiss National Bank

The entire world has signed onto the notion that Central Banks are all powerful. We now have evidence that they are not. Anyone who continues to believes in the All Powerful CB after today is a fool.

~ Bruce Krasting, "End of CB Power - SNB Folds," BruceKrasting.com, January 15, 2015

Jan 15, 2015

Jim Grant recommends 3-year call options on the Swiss franc

We venture that the SNB will sooner or later be forced to permit the franc to appreciate and thus to enrich the holders of low-priced, three-year call options on the Swiss/euro exchange rate. It's a long shot, to be sure--the options are cheap for a reason--but we judge that the prospective reward is worth the obvious risk.

~ Jim Grant, September 14, 2014

(Today the Swiss National Bank announced it will no longer defend the euro by inflating its own currency, sending the Swiss franc up 19% and 20% against the U.S. dollar and euro respectively.  The Swissie effectively retraced 63% of its 3 1/2 year bear market against the dollar... in one day.)