The Vote is in – and the people have said no on all three accounts. In an unsurprising move over the weekend, the vote was 77{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} to 23{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} in support of no. Polls forecast the initiative’s rejection.
The referendum was on 3 issues – the firs was the “Save Our Swiss Gold” initiative that stipulates that the Swiss National Bank hold at least 20 percent of its 520-billion-franc ($538 billion) balance sheet in gold and never sell any bullion ( and also which also required the 30 percent of central bank gold stored in Canada and the U.K. to be repatriated).
Currently holding about 1040 tons, The Swiss National Bank would have had to buy another 1,500 tons for about 60 billion Swiss francs ($62 billion) to meet the 20{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} level.
The other two issues were Immigration limits, and tax policies for foreign millionaires.
Switzerland operates under under a system of Direct Democracy. Several times a year referendums are held on both national and municipal levels. The gold initiative was put forth by several members of the Swiss People’s Party.
Thomas Jordan, President of the Swiss National Bank said in a statement, “The initiative is both unnecessary and dangerous”, saying further that “It is unnecessary because, under the current monetary order, there is no link between price stability and the share of gold in the SNB balance sheet.”
Pressure for the Swiss National Bank to cut interest rates below zero to keep the Swiss franc below its exchange rate floor has mounted in recent months – the “Save Our Swiss Gold” shows a growing discontent with easy monetary policy.
Despite the early drop this morning, gold prices rally around $1192.