- According to the latest polls, 38% of voters would support the Swiss gold initiative and 47% are against it. The previous poll,recognized as more reliable, showed 45% pro gold and 38% against.
- A win for the initiative would most probably imply a breakdown of the EUR/CHF floor.
- According to the polls, low income groups are in favor. Effectively their purchasing power would increase when the CHF appreciates.
- High income earners and stock owners are rather against it. If CHF improves Swiss stocks could collapse, and this explains their voting intentions.
In our article “SNB Concerned”: Does a Yes to the Swiss Gold Referendum Imply an End of the CHF Cap?” we explain that if the widely discussed Swiss gold initiative wins, then the Swiss National Bank would need to buy big amounts of Gold (SPDR Gold Trust (ARCA:GLD)). A second possibility would be to sell about half of its currency reserves, which would imply a breakdown of the EUR/CHF floor.
Latest poll on the gold initiative, Oct. 27 (Online vote): 38% in favor, 47% against
The following are some detailed results from the latest poll this week, which saw gold initiative support fall from 45% to 38%:
The poll showed 38 percent of respondents were in favour of the initiative, down from support of 45 percent in a poll in the paper last week. Some 47 percent of those survey opposed the proposals, while 15 percent remained undecided.
The authors of Friday’s poll said the survey was conducted online on Oct. 27 with 12,491 voters. Results were then weighted by voter demographics, geography and other political variables in order to better represent the Swiss voting population.
Still, the method of polling is seen as less reliable than that of Berne-based research and polling institute gfs.bern, which published a survey last Friday showing the gold initiative had the support of 44 percent of the public. (via DailyMail)
Previous poll, October 15 (recognized institute GFS): 45% in favor, 38% against
We know that news reporting is always biased, and so it was for the first poll results for the referendum two weeks ago. The “gold-friendly” Forbes wrote:
A slim majority of Swiss citizens said they would vote yes to force the Swiss National Bank to increase and hold on to their gold reserves, according to the country’s first opinion poll.
On Tuesday, 20 Minuten, Switzerland’s biggest daily newspaper, released the results of its online survey. According to the poll, which was conducted on Oct. 15 and had more than 13,000 respondents, 45% to 39% said they would support the “Save Our Gold” initiative. (Forbes)
Reuters, a part of the financial establishment, noted:
A proposal to prohibit the Swiss National Bank from selling any of its gold reserves has the support of 44 percent of the public, a closely watched survey showed on Friday, though that result falls short of the backing it needs to pass into law.
The group behind the opinion poll also said support was likely to diminish as a Nov. 30 vote on the measure approaches. (Reuters)
This previous poll came from the recognized GFS bern institute and was published in the widely read “20 Minuten“. The full detail arrived some days later via Swiss television SRF.
The “20 Minuten” article actually concentrates on the Ecopop initiative, a second referendum that takes place at the same time. The left-wing Ecopop initiative wants to radically reduce immigration into Switzerland. In the GFS poll, Ecopop obtain 53% of the votes, while in the online poll 46%.
Similar to Mauldin Economics, we judge that Switzerland is a business, not a country. For us, as people who live in Switzerland, the Ecopop referendum is more important than the gold referendum. It has the potential to destroy the Swiss franc and the Swiss business model that is based on immigration of highly-qualified personnel.
The gold initiative, however, represents only an income switch inside Switzerland. Namely from Swiss exporters and banks (that profit on the already relatively weak franc) to Swiss households, wage earners and low incomes. In particular, the latter groups would see their purchasing power increase when CHF appreciates. The Swiss seem to understand perfectly. According to the detailed results of the poll, low income groups are rather in favor of the initiative, while high income earners are against it. In particular, the income groups under 5000 francs are in favor of the gold initiative.
Switzerland imports a big part of its food and basic necessities from its neighbors, the German discounters Aldi and Lidl have a strong presence in Switzerland. A 10% stronger franc would imply far lower living costs for the low income groups. On the other side, entrepreneurs and high wage earners would have losses on Swiss stocks, when the SNB can no longer manipulate the FX rate. Logically the latter group is against the gold initiative.
The financial press (see Reuters above) emphasizes that discussions around the two initiatives have not really started yet and that often initially undecided or uninformed people vote according to the mainstream. The mainstream, the Swiss government and parliament, is against both Ecopop and gold initiative.
This time, however, things may be different. Often low-income earners are less interested in politics and may rather belong to the currently undecided voters.