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The CHF, outside of Switzerland, is a commodity ... like wheat, oil, etc.  

Nobody has to "inflow" their CHF holdings into Switzerland to use it as a means of exchange.  Firms can take their CHF holdings, convert to dollars, and buy oil - or whatever - on the global commodity market.  By design the global commodity markets are outside the control of any one State, although some countries: e.g., US, China, have more short term influence than others.

Nobody has to "inflow" to use the CHF to play the "Financial Engineering" Game.  Possible to use CHF to buy dollar denominated instruments paying interest in euros.

In both cases the affects on the Swiss economy - where they HAVE to take the CHF - can be dire if the "reverse seigniorage" percentage gets large enough.


Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Sat Aug 13th, 2011 at 01:31:06 PM EST
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