Ask yourself a question: who is the President or Prime Minister of Switzerland? Unlike a nation like Canada, in which their idiot Prime Minister, Justin Trudeau, is the FACE of the nation, the PEOPLE of Switzerland represent their Federal Government, which is still very small.
This small federal government in Switzerland assists the nation with protecting property rights. People tend to forget that money, even if it’s FIAT money, is still considered a form of PROPERTY.
Because of the governmental structure of Switzerland, federal politics has a much more difficult time destroying the nation’s currency. Whereas if you were to compare Switzerland to a country like Canada, Canadians, if they decide to vote for a far-left politician, can quickly find the DOMESTIC value of their currency destroyed.
The concept of a BIG FEDERAL GOVERNMENT is supposed to equate to the GOVERNMENT being able to provide a better SERVICE than the private sector. So if, let’s say, humans become obsessed with the weather changing, and Canadian voters imagine that it’s a good idea to allow their FEDERAL leader to create a NATIONAL CARBON tax.
Now suppose their Prime Minister is a financial buffoon, not only wasting and destroying money and property but also making it more difficult to get any government project completed. What then?
Well, then, in order to prevent the Canadian dollar from being DESTROYED, the Canadian central bank has to add a PRICE CONTROL mechanism called interest rate hikes to keep the Canadian Federal government from destroying itself and the country.
As many are figuring out, the modern monetary system has actually moved away from CENTRAL BANKING, as many people know it to be, as most of the MONEY PRINTING actually comes from the PRIVATE BANKING sector.
However, Private banks still need to pay taxes and make a profit, so if the central banks raise interest rates, the lending behaviors of private banks might change, and private banks, just like any other business, will pass the higher costs on to consumers.
Once you grasp the concept that the FEDERAL GOVERNMENT and its FISCAL spending and regulatory environments are directly responsible for CENTRAL BANK interest rate behavior, you start to get a better understanding of the FOREIGN EXCHANGE markets and how it values currencies.
Now, I’m not going to say Central bank Digital Currencies(CBDC) will never work, but if people imagine CBDCs will allow governments to spend unlimited amounts of capital without accelerating inefficiencies within the Federal Government, I think you’re not only wrong, but you’re an idiot who hasn’t paid attention to Venezuela, Cuba, Zimbabwe, and even Argentina prior to Javier Milei.
Governments have tried CBDCs several times. Rule by fiat money as the current medium of exchange “represents efficiency” with SCARCE resources. If your concept of economics is to use the Federal Government to steal for you and CONFISCATE private property without a court order, you clearly do not understand what led to Western societies flourishing.
If I fear my money being DILUTED via the FEDERAL government or if I fear my PROPERTY being confiscated because of the FEDERAL government, my behavior as a private citizen changes.
Emphasis on the FEDERAL GOVERNMENT, which is very small in Switzerland, whereas in Canada, the powers of their Federal Government continue to EXPAND.
Oddly enough, this is also making it hard for Canada to ATTRACT capital, which is another reason why the Bank of Canada, being one of the first to raise interest rates in a low interest rate environment, hasn’t been the first to cut interest rates.
Switzerland’s structure of governance ATTRACTS capital because it has a small Federal government; you can make more money doing business in Switzerland with their rock bottom rates than you can make in Canada, where their interest rates are currently at about 5%.
I remind you that the Swiss constitution mirrors the U.S. constitution. The difference is that the Swiss Federal government has managed to remain small while the U.S. Federal government continues to expand. However, you’ll notice economic differences in U.S. States run by Left-Wing Democrats vs. right-wing Republicans.
Republican-run States tend to have the problem of attracting Left Wingers fleeing their failed Left Wing States and moving into the cities of Republican-led States, and even when you look at those numbers, you’ll notice that the worst-performing economic outcomes in Republican-led states are the CITIES run by Democrat mayors.
I write this not to discourage you from being a Left wing socialist, I illustrate this to show you what happens when the FEDERAL GOVERNMENT is a run by Far Left Socialists and these individuals are allowed to influence and destroy every segment of the economy via the FEDERAL government.
Of course, far-left socialists exist in Switzerland, but they can only do so much damage. I’m all for socialists trying their “progressive” ideas and experimenting amongst themselves, but if you want to protect your individuality, your family, and your economy from people who want to use your life as their personal economic experiment, you’d be wise to embrace a system of governance that PROTECTS property rights by limiting the powers afforded to the FEDERAL government.
Because if you’re not paying attention, central banks aren’t CENTRAL in the way most people imagine. The central bank model has already FAILED; we’re on the popularity-based Fiat currency model, and Switzerland, because of how small their federal government is and their dedication to PROTECT PRIVATE PROPERTY, continues to attract so much capital, that they literally have embraced a PROTECTIONIST model, that seeks to prevent their currency from appreciating on the Forex markets.
Interesting times ahead!