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Yes, if foreigners go to the trouble of actually buying Swiss real estate, you might get these sorts of effects.

But (a) it is unlikely to happen in any great volume - buying real houses involves not insubstantial transaction costs. It is much cheaper to buy bonds of various sorts, which does not do anything for the Swiss nonfinancial private sector that the SNB would not have to be willing to do in order to defend its interest rate target. And (b) as of Google's last update, the CHF/€ exchange rate is at 121, which indicates that the CHF is still under upwards pressure. Which in turn means that leakage from increasing imports of the sort you describe must be relatively minor.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Oct 3rd, 2011 at 10:32:50 AM EST
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