Swiss National Bank rising up the ranks of Biggest Policy Maker Idiot list

Swiss National Bank broadened negative interest rate policy by reducing the class of entities that were formerly exempt. This meant deposits related to government, such as pensions. Now they'll have to pay interest to the central bank.

How many ways can you say, "idiots?"

The Swiss National Bank, formerly a relatively obscure institution, is now rapidly rising up  the ranks of the list of Biggest Policy Maker Idiots of All Time.

It abruptly ended its EURCHF peg in January, wrecking innocent brokerage firms in the process who were just custodians of customer accounts. (They had no position.)

And why did it end that peg? Your guess is as good as mine, but there is ZERO inability for a central bank to credit users of its own currency. Hong Kong's been doing it for a long time against the dollar. Saudi Arabia, too.

Now the SNB is expanding its negative rates program like that other idiot central bank the ECB (which still sits atop the Policy Maker Idiot rankings). Negative rates are a tax--a confiscation of money--so what is stimulative about that?

Maybe a) they believe this will weaken the Swiss franc and; b) "need" the cash to pay out their traditional dividend payments to the Swiss cantons. (But that's like taking from the cantons and giving it back.)

Suffice it to say none  of this makes any sense in a normal world, but in the Bizarro world that we live in today, it all makes perfect sense.

Here's why the SNB broke the peg: they took a bath on gold

We've been speculating that the SNB was showing balance sheet losses (negative equity) and panicked and pulled out of the EURCHF peg. We figured that it was related to those euro purchases.

The SNB pays dividends to the Swiss cantons. It has done so uniterruptedly for the past 100 years, however, in 2013 it couldn't make those payments.

Why?

Because it took a bath in gold. (Peter Schiff's favorite investment.)

This was posted on the BusinessInsider website.

So the people running the Swiss National Bank are even more stupid than I originally thought. Loading up on gold at the top or, near the top. You see the idiots running these institutions and by corollary, our freakin' lives?

What the Swiss National Bank did yesterday was nothing short of financial terrorism. FXCM blown out!

The fallout is starting to pour in...

It's bad enough when the banks and traders of Wall Street are left to blow up our financial system with their irresponsible behavior, but central banks are created and tasked to prevent unecessary bankruptcies and insolvencies.

I guess the Swiss National Bank doesn't think so. Their action yesterday--the abrupt and untelegraphed end to their euro/swiss peg--was nothing short of financial terrorism. The result is that now we see entire, healthy, viable, firms have been blown up. FXCM has been blown up and there are reports of many other firms starting to trickle it.

FXCM was a true success story. Founded by four young entrepreneurs they built the biggest U.S. retail forex firm. It is now destroyed and seeking a rescue thanks to the SNB.

Wall Street has done a lot to shatter the confidence of investors over the year, but a central bank??? It's pretty much time to take your chips and walk away from the table for good.

Swiss National Bank unleashes hell storm. Ends peg against the euro. Euro collapses. Swiss franc surges against dollar. Gold up.

The Swiss National Bank abruptly decided to end the peg against the euro this morning. That caused the euro/swiss exchange rate to plummet from 1.22 to 1.03 in an instant. Look at the chart below.
(This is a weekly chart that goes back to 2009!)

The dollar lost eight months worth of gains against the swiss franc in seconds. Gold is higher. All markets will feel the impact of this today.

I said big currency moves were coming in 2015. For those of you who didn't take my Forex course, you lost out big time!