I've read too many reports (for seems like for a year) about the ECB and legal restrictions, etc. for performing their QE; supposedly starting next week.
Is there a 500 words or less document/article that further explains what any of this may bring forth in understandable terms? Or is this situation too complex? Or should I contact someone at the Central Bank of Switzerland (SNB) ? Perhaps their web site offers some insight.
Thank you for any assistance with this matter.
Regards,
Catch
Comments
http://www.snb.ch/en/
Added bonus: Top 10 Things Switzerland is Famous for: Topping the list are chocolates, skiing and (my favorite) cheese. http://beforeitsnews.com/alternative/2013/07/top-10-things-switzerland-is-famous-for-2722550.html
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Beware all the NOISE. Unless you're a trader (as opposed to a long term investor) the Swiss Bank's moves aren't going to affect you. OK - maybe your portfolio was down today or will incur a bad year partially as a result of today's currency maneuvering. So what? 5 years from now nobody will even remember it. If you are positioned in good investments today, they should still be good investments 5 years from now. Temporary setbacks are normal in investing.
The ECB probably can move markets short-term with whatever they decide to do. Their impact will be from a combination of bluster and substance. They'll get their ducks lined up ahead of time so it will sound like a unified approach, probably along the lines you suggest. From what I've heard, they'll use private financial institutions to implement some type of bond buying program. Obviously, they'll try to spread the burdens and benefits across the member nations.
Again - 5 years from now we likely won't remember what they did. I don't think they have the degree of clout our Federal Reserve has because the European Union isn't one cohesive governmental entity like the U.S. It more resembles a bunch of bickering siblings having assorted ailments - some on life support. Reaching agreement among the members is near impossible (though they'll try to paper over those differences next week).
My guess is that we're further along in this global cyclic deflationary stagnation than we can currently envision. May have to slog through a few bad years ahead - but it won't be the end of the world. Remember how we always like to fight the last war?
Good investing.
Edit: According to the linked article, Excel has closed. They cannot perform business due to massive losses.
http://www.zerohedge.com/news/2015-01-15/2-fx-brokers-suffer-significant-losses-after-snb-surprise-breach-regulatory-capital-
You noted: "Beware all the NOISE. Unless you're a trader (as opposed to a long term investor) the Swiss Bank's moves aren't going to affect you. OK - maybe your portfolio was down today or will incur a bad year partially as a result of today's currency maneuvering. So what? 5 years from now nobody will even remember it. If you are positioned in good investments today, they should still be good investments 5 years from now. Temporary setbacks are normal in investing."
>>>But, what type of noise is this??? These monetary functions are a form of currency wars, yes? Central banks do and are attempting to cover their monetary butts based upon their observations of trends/patterns.
As to long term investor.......yes! But this is part of the question. That one's "long term" holdings investments begin on the day of the initial purchase.
Thus, if and when and what the ECB may or can actually perform have a more profound affect on particular investment areas on the day they really do something.
To the point of, for an example; that Joe/Jane investor popped a bunch of money into the Euro area (or are thinking of doing this) and they bought or will buy soon when the Euro/$ is or was at $1.24. This has already changed to $1.16 or so. Is the Euro going to par with the U.S.$ soon? Not unlike changes in the 10 year bond yield numbers. These are small numbers and some overlook the percentage moves. The Euro moving to par with the U.S.$ from a $1.24 value is a decline of 19.35%. This does affect investment values for those buying Euro area investments; especially from a stronger outside currency.
About those small yield moves here and there for the 10 year note; and over time:
+ or - a percentage point of change.....
---Dec 30, 2014 (yield = 2.3%) - Jan 15, 2015 (yield = 1.74%) change = 24.35%
---Dec 30, 2013 (yield = 3.04) - Jan 15, 2015 (yield = 1.74%) change = 42.76%
Anyway.....Was why I posed the question; as the long term implications may be in place for a more serious change.
Current global 10 year gov't. yield data
Regards,
Catch