But it’s the world’s gold refining hub, a major global center for bullion vaults and boasts the world’s 8th largest official hoard of gold.
The country was also late coming off the gold standard and as recently as 1999 its constitution required the franc to be 40% backed by gold.
The Swiss go to the polls on November 30 in a referendum that will lay down new rules for the country’s central bank concerning its gold reserves.
A recent survey found the majority of the European nation’s citizens are in favour of forcing the Swiss National Bank to hold 20% of its reserves in gold, bring back any bullion held outside its borders and halt all sales.
Given the SNB’s track record managing the country’s stash since 1999 it’s not surprising that most inhabitants of Switzerland (not its parliament however which has rejected the idea outright) want to rein in the bank.
Stephen Pope in a blog post at Trading Floor, provides an excellent summary of what is at stake in the Swiss referendum and shows that, while maybe not as bad as Brown’s Bottom*, the SNB has not really shown much financial sense when it came to bullion:
Continue reading at Trading Floor.
*Under the then Chancellor of the Exchequer Gordon Brown, the UK sold about 395 tonnes of gold over 17 auctions from July 1999 to March 2002, at an average price of about $275 per ounce.
Image of lakeside benches in the shape of gold bars in Kreuzlingen, canton of Thurgau, by Sascha Erni