Swiss Gold Reserves
Back in 1999, Switzerland held just over two and a half thousand tonnes of gold bullion in its official reserves. It was the biggest gold holder after the International Monetary Fund, the US and the Eurozone. In concert with other central banks, subsequent bullion sell-offs by the Swiss National Bank throughout the first decade of the 21st century has depleted those reserves to a little more than a thousand tonnes according to the World Gold Council. It is estimated that the sale of Swiss gold reserves has cost the Swiss people some $50 billon.
For many people, both inside and outside Switzerland, there has long been an assumption that the strength of the country’s currency and its economy owes much to its considerable reserves of gold.
With those reserves depleted, the Swiss Franc itself has come under scrutiny recently as concerns are growing that it is suffering the same kind of monetary debasement that the US Dollar has over the past few years, with the SNB engaged in a care-free monetary policy.
Quantitive Easing has been undertaken by the bank in an effort to stop CHF from appreciating to strongly against the Euro which has been rocked by crises that have unfolded one after another across the Eurozone member countries. Policymakers state that strength of the Swiss franc threatens economic development and increases price instability.
Swiss Franc vs Euro
Calls for more transparency regarding the remainder of Switzerland’s gold reserves have been met with statements from the Swiss National Bank that its physical gold reserves are held “domestically and internationally, with provisions for a crisis scenario being a main factor in the decision for this decentralized storage”.
Whereas the SNB may have good reason store Swiss gold outside of its border, it does worry many Swiss people who fear possible confiscation by these foreign jurisdictions in the cataclysmic event of some kind of economic collapse.
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