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November 29, 2014

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Home » Business » Finance

Swiss to vote on nation keeping gold

Source: AP | November 29, 2014, Saturday | Print Edition

IN Switzerland, a campaign is on to protect the country’s wealth by investing in gold — a lot of gold.

In a test of their sense of financial security, the Swiss are being asked to vote on a proposal to make the central bank hold a fifth of its reserves in gold within five years. That would mean buying about 1,500 metric tons of gold worth more than US$60 billion. If the initiative wins the backing of a majority of voters tomorrow, the Swiss National Bank would also be prohibited from spending any of the treasure, which would have to be locked away in vaults entirely on Swiss soil. The prospect risks causing a spike in gold prices globally.

The nationalist Swiss People’s Party, the country’s largest, has brought the “Save our Swiss Gold” initiative, arguing it will restore trust in the central bank and its paper money. The proposal is opposed by the government and financial leaders but aims to capitalize on a growing sense of caution among the Swiss about the perceived dangers and rising volatility of financial markets.

Though the country is among the world’s most prosperous, the initiative argues that owning physical gold in vaults would protect the country’s wealth from trouble in markets beyond the control of this small Alpine nation. The experience of the 2008 global financial crisis, triggered in part by complex investments that brought down multiple banks and bankrupted states, is fresh in people’s memories.

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