After another fascinating week in global markets and the ECB announcing they are going to print vast quantities of money to support the tattered European banks and bond markets, today John Mauldin spoke with King World News about the shocking level of desperation that we are now seeing around the world.
John Mauldin had this to say about the historic Swiss move and ensuing chaos: “The (historic) Swiss (move), it was kind of like the (Roberto) Duran (vs) Sugar Ray Leonard fight: He (Duran) walked back to the corner and said, ‘No mas.’ He just couldn’t take any more pain. The European Court of Justice on Tuesday said, ‘OK, you (the ECB) really can do QE.’ They (the Swiss National Bank) get a back-channel phone call that says, ‘OK, we’re not going to do just 50 billion (euros) — it’s going to be open-ended because we are going to double-down.’
So they (the SNB) had the meeting on (that) Wednesday and realized, ‘We’re already down 60 billion francs — $70 billion — on this trade. Our balance sheet is now 80 percent of our national GDP.’ That would be like the U.S. Federal Reserve having a balance sheet of (roughly) $13 trillion — some horrendously big number. The goldbugs would be freaking out if our balance sheet (at the Fed) was that big….
Continue reading the John Mauldin interview below…
“So the Swiss just looked at it and said, ‘If they do this QE, the euro is going to 1.10 and then maybe to 1.00.'
The Swiss looked at the euro going to 1.10 and then to 1.00 and they said to themselves, ‘If we want to defend the franc at the 1.20 peg, we’re going to have to be willing to put another 70 billion, 80 billion, 100 billion francs. Twice the size of our country would be on our balance sheet.’ That’s just not something a Swiss banker wants to even contemplate.
That’s too much pain and so they just said, ‘No mas. We’re out of here.’ And in typical Swiss fashion they made the decision and woke up the next morning (asking), ‘Is everybody still on board?’ They answer it (yes). And I’m sure they walked back into the trading room and watched it (their massive euro currency position) go against them and said, ‘Oh my God.’ They had to be a little bit surprised that it went that violent, that fast, but that’s what happened.
Then the Danes came in and said, ‘Well, we don’t want you coming into our currency. We’re going to cut rates.' Then the next day they cut rates some more — into negative territory. The Swiss cut it to minus .75 percent, letting everybody know they could take it to minus 1.5 percent. They (the Swiss) have the ‘Not Welcome’ mat out. They don’t want you holding Swiss francs.”
Eric King: “We’ve seen the currency collapse with the ruble, Brazil and other places, and now of course we’ve had the collapse of the euro against the Swiss franc. Is that the future? Is that what we are looking at — the destruction of these fiat currencies?”
Mauldin: “What you have is country policies that are not well-managed, and yeah, they’re in trouble. And they are going to try to maintain a competitive advantage. If you look at what happened immediately after the Halloween surprise from Kuroda and the Bank of Japan, the yen fell against the euro.
With the latest move (by the Swiss), the yen has recaptured all the losses and we are back to where we were in October. What does Kuroda do the very next day in Davos? He said, ‘Well, if we have deflation, we will have to do even more (money printing).' It’s going to force the Chinese to do it (print money) in order to maintain market share. So countries are acting in their own interests. Each central bank is on its own and it’s every central banker for himself.” ***ALSO JUST RELEASED: The Terrifying $250 Trillion Time Bomb, Gold And Escalasting Currency Wars CLICK HERE.
The outstanding John Mauldin audio interview has now been released, where he discusses the remarkable developments in Switzerland and Europe, why Europeans and the Japanese should be buying gold hand-over-fist, and much more. You can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
© 2015 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
The audio interviews with Egon von Greyerz, Dr. Paul Craig Roberts, Gerald Celente, Lord Christopher Monckton, Michael Pento, Bill Fleckenstein, David Stockman, Dr. Philippa Malmgren, Stephen Leeb, Andrew Maguire, John Embry, Rick Rule, Rick Santelli, John Mauldin and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf — to listen CLICK HERE.