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OT- Any idea why the Swiss Franc has deteriorated so much since the 80's ?

Milacron

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This is machine tool related in the sense I was curious about a Swiss made machine tool that cost about 40,000 CHF in 1984....but back then 1 USD = 2.5 CHF..... so it was equivalent to about 16,000 USD. But now the Swiss Franc and USD are about equal...one to one.... what happened ?

Would also be interesting to know if inflation was about the same in Switzerland as the USA from 1984 to now.
 
This is machine tool related in the sense I was curious about a Swiss made machine tool that cost about 40,000 CHF in 1984....but back then 1 USD = 2.5 CHF..... so it was equivalent to about 16,000 USD. But now the Swiss Franc and USD are about equal...one to one.... what happened ?

LOL! I can't believe you just did that!

CHF didn't "deteriorate". USD did. And not-only. Euro as well. And not-only. GBP as well. And not-only.

CHF hasn't really much moved. It only APPEARS to have "appreciated". Not DE-preciated.

Market-basket of the more valuable commodity metals over time should be enough to clarify that at least a skosh. National indebtedness as percentage of GDP as well. China it is under 20% but believed to be a grand lie. Swiss is about 33%, about as honest as it gets.

US is over 103%, still not too damned bad, given Japan is 224%. Germany is another grand lie. Pension obligations are not even on the same books, and they are massive. Much of the rest of the Eurozone is even worse-off and far too busy pretending otherwise to even make a start at fixing their problems. if even they can BE fixed.

Now.. the "competitiveness" of the CHF is what HAS deteriorated. "Depending", even then.

Swiss have mixed feelings about the "high price" of their currency, BTW.
Harder to compete on price is only part of that.

They do not trust it to remain that "valuable", (2017 dropped vs 2016).

Caution - even pessimism - being a known Swiss national trait? One which has saved their national ass, and more than once, so....I'd not class it a "bubble", and they still have a very high cost of living, even on imported goods pricing.

But they don't really manufacture all that much in-country, lo for many decades, now. They manage the IP, the trade. And the money. About 3/4 of GDP is the service sector.

That's good enough. The Swiss headcount is near-as-dammit identical to Virginia and not much higher than Hong Kong, after all.

Cap'n Obnoxious.
 
This is machine tool related in the sense I was curious about a Swiss made machine tool that cost about 40,000 CHF in 1984....but back then 1 USD = 2.5 CHF..... so it was equivalent to about 16,000 USD. But now the Swiss Franc and USD are about equal...one to one.... what happened ?

Would also be interesting to know if inflation was about the same in Switzerland as the USA from 1984 to now.

I can only show the past 10 years on this.

XE: USD / CHF Currency Chart. US Dollar to Swiss Franc Rates

The Swiss Franc has been stable for as long as I can remember.

Why The Swiss Franc Is So Strong | Investopedia

Even when most countries took a beating after 2008 it didn't seem to affect Switzerland. They remain aloof from the Euro (€). Living in Europe it's as if the US$ fluctuates but living in the USA it probably seems as if we do.

"The economy of Switzerland is one of the world's most stable economies. The service sector has also come to play a significant economic role, particularly the Swiss banking industry and tourism. The economy of Switzerland ranks first in the world in the 2015 Global Innovation Index and the 2017 Global Competitiveness Report. According to United Nations data for 2016, Switzerland is the third richest landlocked country in the world after Liechtenstein and Luxembourg, and together with Norway the only two countries in the world with a GDP per capita above US$70,000 that are neither island nations nor mini-states."

The above is from:
Economy of Switzerland - Wikipedia
 
This is machine tool related in the sense I was curious about a Swiss made machine tool that cost about 40,000 CHF in 1984....but back then 1 USD = 2.5 CHF..... so it was equivalent to about 16,000 USD. But now the Swiss Franc and USD are about equal...one to one.... what happened ?

Would also be interesting to know if inflation was about the same in Switzerland as the USA from 1984 to now.

I had to go and check... my first regular US/Europe travel didn't start until April 1988. My new next-higher had been 26 1/2 years C&W, ten years Amex as architect of their global clearing network, then back to C&W for what became another ten years.

On HIS advice I have always traveled with Amex traveler's check denominated in CHF, rather than USD or wotever. Even countries that had a hard-on for the US or UK (East Germany) were always happy with CHF, so that part worked.

USUALLY, they'd actually sit a year unused because I'd had an Air Travel Card, Amex Platinum, Carte Blanch, Diners, VISA, MC since the early 1960's, etc.

As we would "cycle" these unused traveler's checks, we would find we had "earned" 11% to 15% on our money that year, just by holding CHF, even with no interest payments, instead of USD.

That eventually slowed, briefly even reversed now and then, but it had held for quite a long time.

Parity at 1:1 or near-to and moving rather little came around ten years ago, April 2008, but became more stable only about 8 years ago. The actual graphs, 1975 onward, are here, and they are interactive, so one can pick dates, etc:

U.S. Dollar to Swiss Franc Spot Exchange Rates for 1975 to 218 from the Bank of England

It is what it is, and no longer a currency I would try to make a few sheckels off of.
 
The near parity came about, because through sheer greed the American Banks, and the almighty $ fucked the entire global financial system.
 
The near parity came about, because through sheer greed the American Banks, and the almighty $ fucked the entire global financial system.

I wish I could believe they were even that competent, if only to be able to boast about SOMETHING!

They were not. They are not.

The GOT f**ked in playing games above their competence level. In panic, they THEN f**ked the bystanders as a byproduct of swamping all the lifeboats in their frenzied efforts to keep their own nostrils above water.

Rather too many UK & Irish financesters as had been sharing bodily fluids under the same blanket swamped a few rafts of their own as well.

I do not rate EU's "wish" to shift global financial hubbing London to the Continent as a long-range beneficial move - even for themselves.

PARIS would be the new seat? Get f*****g REAL!

France is not a nation of alcoholics. They drink in despair as inheritors of the world's longest running serial bankruptcy scam, Vercingetorix to most-recent market close!

Italy would take that prize but for one complication. They are not actually a cohesive nation-state. Only a collection of tribal entities under the umbrella of sharing a brand-name at the corruption trade.

It is understandable why the EU believe it would be an improvement to move off London. Akin to putting post-it notes to cover the faces of all one's metrology gear.

Damn! Just look at the fortune we have saved on periodic calibration costs and wages for staff who could have been bothered to read the numbers ... that France is only going to play silly-buggers with anyway.

It's what they do!

:(
 
^ Don't worry about it the french will be on strike and it will never happen. The financial mess is one of the few truly good bits about brexit, the pound becomes and remains ours, the Eu is not like the states with such similar goals and qualities of income, life, standards of living and country finances vary so much across this continent the single currency is going to implode some point or another IMHO.

My gripe is our politicians bailed the banks out, i wish we went the Iceland way and let the greedy fuckers starve. For the average bod working pay check to pay check it would have had little impact.
 
^ Don't worry about it the french will be on strike and it will never happen. The financial mess is one of the few truly good bits about brexit, the pound becomes and remains ours, the Eu is not like the states with such similar goals and qualities of income, life, standards of living and country finances vary so much across this continent the single currency is going to implode some point or another IMHO.

My gripe is our politicians bailed the banks out, i wish we went the Iceland way and let the greedy fuckers starve. For the average bod working pay check to pay check it would have had little impact.


Amen brother, and all the worlds troubles centre around the goddam f'kn $
 
Yeah but don't worry sami when they fuck it up, then the french fuck up the euro that leaves us once more. The reason the world banks with - through us like they do is not just were we are but we have a history of trust worthiness few other countries come close too.
 
Yeah but don't worry sami when they fuck it up, then the french fuck up the euro that leaves us once more. The reason the world banks with - through us like they do is not just were we are but we have a history of trust worthiness few other countries come close too.

As long as they don't take us down with them, if the $ goes down far enough, it could take the £ with it, …...and it could be the Chinese who do it.
 
^ Don't worry about it the french will be on strike and it will never happen. The financial mess is one of the few truly good bits about brexit, the pound becomes and remains ours, the Eu is not like the states with such similar goals and qualities of income, life, standards of living and country finances vary so much across this continent the single currency is going to implode some point or another IMHO.
What they've been doing is that German Banks "clear" their lies with the French, iron out differences "in committee" then both swear to it. Challenges are marginalized in endless mid/low level Bureaucratic meetings much as the early Irish settlers in Pennsylvania took out their garbage. Mostly, they did not.

They just kicked it about until it eventual got lost - or the pigs ate it.

Job security for the rock-rats is that decisions are NOT made, more staff must be hired to review ever-weightier matters, responsibility has expanded, titles and salary upgraded in recognition thereof, and the "work" expands, repeat unto fat retirement.

England's reps to the EU are not specially "moral" about any of this. Never were.

They have served as counterweight for a different reason. Perfidious Albion is always looking for an opening they can exploit to THEIR advantage. THEIR thieves tend to stealthily set-up in ambush - ready to prey upon each other, such that collusion is risky business.

Much the same, Old Lady of Threadneedle Street and the crawlers of Kornhill. There are players, there are "scorekeepers", there are sharpshooters, critics, and predators "outside" the tent as well as inside. They have to deal with competition from Asia, the USA, and more, all the while messing with the Russians for practice.

"The City" is not so insular as the "Continentals" as to presuming they control the playing field and can ignore "outsiders".

Nothing especially ethical or moral about any of that equation. It wasn't actually even "planned". They just try harder to not lose. Or get caught econoshagging.

A workable balance ensues.

My gripe is our politicians bailed the banks out, i wish we went the Iceland way and let the greedy fuckers starve. For the average bod working pay check to pay check it would have had little impact.

Not that easy to starve a tapeworm and not harm the host. The "Iceland way" had a serious impact. Very. Many, many years before the train-wreck, but the first Icelandic friend I made was a Banker. Eye-openers, our chats.

Not meaning to go off in that direction, but just look at how small their population is, and how damned near everything but steam heat and fish must be bought from overseas. Then paid-for.. with what, and earned from what source?

Especially as the fishing biz was hammered so badly, and so long ago, already.

I was only borderline pro-Brexit. Didn't vote. More on getting the UK out from under the administration and "legal" idiocy than on economic grounds.

After watching how the EU has handled THEIR end? "It is time" on the economics, that UK turn outward and forge a new place and deals with the still-dynamic world, BREXIT or no.

Those blind fools at the helm of the EU are not working on the challenges and to the realities of present-day Planet Earth.

They seem to think they are dealing with a "leaver" among the ranks of aristocratic secret members of a "private stock" Napolean III era BROTHEL, and a kinky one at that!

:(
 
The value of a national currency is underwritten by the perceived productivity of the national economy. Barring some governmental sleight of hand, the currency value reflects the true productivity of the economy. Regards, Clark
 
The value of a national currency is underwritten by the perceived productivity of the national economy. Barring some governmental sleight of hand, the currency value reflects the true productivity of the economy. Regards, Clark

It takes very little more than what you have written to develop an enlightening course in basic global economics, and publish it in a single slim volume.

"Governmental sleight of hand", however, employs armies to publish its lies, has filled entire libraries, and shows no sign of abating.

Worse, one then has to contemplate the remaining 49 states, and can only hope to train the next generation to have a look at the FEDERAL government's sleight of hand.
 
The value of a national currency is underwritten by the perceived productivity of the national economy. Barring some governmental sleight of hand, the currency value reflects the true productivity of the economy. Regards, Clark

hey come on, don't bring reason to it, Bob Loblaw is just getting wound up :)

I think its a lot more than that, monetary policy, debt, fiscal policy, productivity and of course PPP - purchasing power parity,,,,,end of the day, its supply and demand; for example anyone who sells goods to the US creates a supply of dollars on the fx market)
 
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Let me think here....if I raise the value of the US dollar,
I am worth more, and can buy more things with each and every dollar.

So if I have money in the bank, I want it to be worth more.

Foreign money will be worth less, so exports will suffer.

But I can buy more with less of my (US Dollars) from China
and other foreign countries.

If I am indebted to someone, it would be good if the debt is worth
less, so I don't have to work as hard to pay off that debt, right ?

Who has a bunch-o debt ?

Hint....That "off the books, the oil wells we capture will pay for it all,
leetle 15 year fireworks display"....owner.

It's a poker game, how much can I push up my country's money, without
greatly affecting the import/export balance.

What's the Swiss have to export for leverage ?

Thermites post #3 touched on that, sounds (to me)like mostly "smoke and mirrors" though, something that could easily be moved to India.

My aforementioned Chile article, they cite the large amount of exports of Copper,
and other materials.

interesting how Argentina right next door, (having many of the same
exports) has run up so much debt, and
I read how they continually default on it.

Which leads me to believe (as a simple machinist) that it has more to do with politics, than actual GDP, exports, imports, etc.
 
anyone who sells goods to the US creates a supply of dollars on the fx market)

What makes you believe that?

If Day Job were to buy goods or services from a foreign firm, we settled the "major" ones in a currency negotiated at the outset. OUR preference was not necessarily GBP or USD.

The entities who export also negotiate settlement terms with their customers.

Smaller firms, smaller purchases, any services performed locally, it was usually local currency.

Most nations export as well as import, after all. What creates claims on a nation's assets are the cumulative trade imbalances, not the singular transactions.
 
Which leads me to believe (as a simple machinist) that it has more to do with politics, than actual GDP, exports, imports, etc.

"More to do"? It has everything to do with politics and Switzerland has exceled at that for more than a century. Everything Switzerland does is for the benefit of Switzerland. Maintaining neutrality no matter what isn't easy but they master it.

How "politics" functions in Switzerland is worth studying.

Switzerland even has 4 national languages depending on where you live in Switzerland. German, French, Italian and Romansh.
 








 
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