Reuters reports that the Swiss People’s Party (SVP) has gathered enough signatures to put forth an initiative to “save Swiss gold”. The push for a referendum began more than two years ago, but the movement has now acquired the signatures it needs to bring it to a potential vote.
The proposal would:
- Prevent the Swiss National Bank from selling Swiss gold
- Require 20% of the bank’s assets to be held in gold
- Repatriation of all foreign-held gold reserves.
The vote will be held on November 30th of this year.
A key feature of Swiss democracy is that the people may petition the government to offer a vote. The petition has garnered more than 100,000 signatures from Swiss citizens.
In 2007 and 2008, the Swiss National Bank controversially sold more than 250 tonnes of gold at what many considered to be bear-market prices.
When Switzerland joined the IMF in 1992, it was forced to remove the gold-backing of the Franc as the IMF’s Articles of Agreement state that no member country can have a currency linked to gold. Legislation was put in place and a few years later, the Franc’s link to gold was completely discarded. In 1999, the Swiss National Bank reported gold reserves totaling more than 2,500 tonnes but the most recent audit revealed the bank currently holds less than half of that number (1,040 tonnes). This has happened while the BRICS nations have all increased their gold reserves in efforts to reduce their dependence on the dollar.
Some analysts believe that the physical gold in Switzerland may actually be completely gone and that the remaining 1,040 tonnes are only held in paper claims and promissory notes.
Luzi Stamm, the Swiss parliament member behind the initiative, has theorized that if the referendum passes, it could cause a domino effect across Europe with Germany, Austria, and France soon to follow. In an interview with Financial Sense Stamm stated, “Perhaps Switzerland in a certain way could serve as an example to others. Because…if we would do so…we would have a reaction from Germany, from Austria, because their…populations would start to complain also: ‘Why do our countries not do the same?’”