 This weekend we welcome Claudio Gras from Switzerland to discuss the upcoming Swiss Gold referendum. Claudio is a dedicated libertarian who reads Rothbard and Mises, but he's also the managing director of Global Gold, a bullion company specializing in storage of physical precious metals outside the banking system, so he's well positioned to address this weekend's topic. We'll discuss the uniquely Swiss mindset behind the referendum and how decentralization of political power is part of Swiss DNA. The tremendous geopolitical aftershocks that would occur if the referendum passes, including the physical repatriation of gold to Switzerland and how the Swiss people may be waking up to the sellout of their country by the Swiss National Bank and the IMF. Stay tuned. Ladies and gentlemen, welcome once again to Mises Weekends. I'm your host, Jeff Deist, and we are joined this weekend from Switzerland by Claudio Gras. Claudio, how are you? Fine. Good to have you on the line, Jeff. Well, of course, we've already told folks in the intro that we wanted to have you on to talk about the upcoming November 30th Swiss referendum on gold. Obviously, Switzerland has a long history of referendum votes, apparently only requires about 100,000 signatures out of a population of 8 million to hold a referendum. Tell us a little bit about the background of this vote and how the referendum came about. You need to know that we were on a kind of gold standard until the end of the 90s, because there in the constitution, we still had 40% of the money needs to be backed up by physical gold. And then in 2000, they changed the constitution. Basically, the politicians were saying, okay, we have to modernize the Swiss constitution, and they sent out, I think, 30 pages of what they would like to do, and then the people had to decide, I think, within three weeks, usually they have more time within a very short period of time. They basically had to accept it and then to say yes or no for the whole package. And it was not a single world was in there that they would like to take out the gold backing. And that's now 14 years ago. And what we have seen in the last 14 years, of course, is that the power, let's say, the centralized government in Bern was trying to get more grip, taking away responsibility from our canthons. I mean, you call it in your areas would be a state. But we had in Switzerland always a very decentralized political system where the canthons and also municipalities or cities, they had full responsibility when it comes to taxation, ruling system, health care, and all that stuff. So a very decentralized style, how the Swiss were raised, and what we still have in our genes over the last 800 years is just part of our cultural DNA. And now, I mean, after the 2000 basically, they decided also to sell 50% of the gold reverse reserves, almost even, I think, 60% in total, I think, 1600 tons. And now, of course, you had all these stories coming up, Germany's oxygen forest, gold back and so on. So that was also the Eurozone trying to get more power when it comes to Switzerland. They have seen that in our bureaucrats were also sympathizing with the bureaucrats in Brussels and so on. And now we packed even the Swiss franc to the Euro. It's not a real pack, but at least it's a kind of soft pack. So they were saying it needs to be exchange rate of 1.20. And of course, a lot of people lost overnight a lot of money, especially people, the workers, pension, the retired people, and so on. And I think all this led to the conclusion that they were thinking about the gold reserves. Where are they? Who has them? And we should go back to a gold fixing. Claudio, do you have any sense as to the popularity of their referendum or whether it's likely to pass? That's a good question. I mean, in general, what we are witnessing is there is no real debate taking place. Of course, we have the mass media, we have the politicians and the bureaucrats, we have the central bankers, and of course they all oppose their referendum because they just feel that if that would happen that they would lose grip and power and so on. And still, we have Swiss TV stations, which our government owns, so they don't even have a conversation or a debate when it comes to the gold standard or to going back to a gold fixing. So that's a real pity. But at the same time, we can also see when I speak to Swiss people on the street, a lot of people, they just realize something is wrong, something is going in the wrong direction. And they also understand that it's literally it's not possible to print money like crazy because even our S&B, our National Bank, they have increased their balance sheet by 500%. They went from 100 billion up to 500 billion since 2008. And so a lot of people, they just see, okay, this is when you look around European Union in the United States, they just see this is something which is really fishy. And so I had a lot of people approaching me interested in gold and so on. So people start thinking at least about gold and they are questioning the actual system. So I think that's the good point. Do you think there are populist anti-elite parallels between this vote and the recent Scottish independence vote? I think that's definitely also part of it. A lot of Swiss people, they just realize that they're losing liberty inch by inch even over here in Switzerland and they don't feel comfortable with that. And so I mean, some of them, they also realize that basically a decision against the S&B policy would be also a decision for more liberty and more freedom. And so they, yeah, the government brought up several new votings they wanted to push through and in the past, they basically had lost some of them. So that just shows that the distrust is growing among the Swiss people when it comes to politicians. Claudio, does this referendum have anything to do with Swiss resentment about ciders demanding, for example, an end to Swiss banking secrecy? Yeah, we have a lot of Swiss people, they believe, OK, the banks, they are really bad. And so therefore it's important that they also hand out the information. And then, of course, we have on the other side, we also have people which understand that the banking secrecy was there to protect the citizen against an overwhelming state and to protect their privacy. So there are definitely several groups fighting. Claudio, I'd like your thoughts on the possible aftershocks that might occur if the referendum is successful. For instance, it would force the Swiss National Bank to demand return of much of its physical gold currently held by the US Fed and other central banks. Well, when it comes to that, I mean, at the moment, I mean, as you know, we only have the informations which are provided by our government and the central bank. So and they basically told us that, you know, at the moment, Switzerland owns one thousand and forty tons of gold. And they were saying 70 percent are stored in Switzerland and 30 percent outside of Switzerland. 20 percent is stored with the Central Bank in England and 10 percent with the Central Bank in Canada. You know, when we when we started that there has also been a document from Philip Hildebrandt, who used to be, you know, the president of the Swiss National Bank in the past, who had to leave because he was, you know, playing some currency games, private, but before they packed the Euro back to the Swiss Franco, the Swiss Franco, the Euro. And, you know, what what he was saying in that paper basically was that the sixteen hundred tons, which the Swiss sold since two thousand, that most of it was stored outside of Switzerland and the biggest portion in the United States. So I think at the moment, I personally believe we don't have any reserves. Gold reserves left in the States. That that gold has been sold over the last, you know, 10 years. That's that was the official news is over here. Also, Claudio, there would be enormous geopolitical consequences if the referendum passes. For instance, the referendum calls for the Swiss Central Bank to hold about 20 percent in gold reserves. It currently holds about seven point seven percent in gold reserves. And from what I've read, it would have to buy about fifteen hundred tons of physical gold to reach 20 percent, which represents about half of the world's annual production. So I just wonder how politically feasible this might be in your view over the next five years. If Switzerland would accept and would go back to goldbinding, I think it would definitely would have a huge impact. Because, you know, Switzerland still, I mean, we are we are still the financial center on this planet. We still have, I think, 26 percent of all the foreign, how do you say, offshore money is kept in Switzerland. And now in these days, we know definitely not because of the bankers, you just see just because, you know, of the political stability of the fiscal. You know, I mean, we don't have a lot of debts. You know, the economy is still running fine. OK, I mean, they they exploded in the balance sheet of the S&B. So they basically that because we had a debt break over here in Switzerland, the people were saying, OK, no more debts a few years ago. And so, I mean, and now the central bank basically just printed money. So they were in a way, you know, making a roundabout about that law. But of course, you know, if Switzerland would return to gold, I mean, and then starting buying a physical gold again, that would be a huge sign for the rest of the world. Claudia, what would a yes vote mean for the Swiss franc? Would it increase the value or benefit the Swiss franc? In the long run, I'm fully I fully believe a yes would be the best, which can happen to Switzerland. But of course, you know, I mean, I I don't believe, you know, in force. I don't believe you should force people into gold. So there is always, you know, even in democracy, you always, you know, 51 percent basically are deciding over the other 49 percent. And, you know, a lot of people would suffer. I mean, everyone with that would suffer. You know, we most likely would have a problem in the banking system because we would see, you know, immediately it's likely that we'll see a deflation in Switzerland and, you know, that our currency would just go up. And of course, you know, I mean, I think that's the best because, you know, the currency we'll appreciate. I mean, even if they if the Swiss are following now the European Union, I mean, they're trying everything to depreciate the euro. And as soon as this is happening, most likely our national bank is trying to keep, you know, the 120. But I mean, when you look at the Swiss franc in the ocean of paper money, it's just, you know, a tiny little point. So one fine day that's that's going to that's not going to work any longer anyway. And then most likely the Swiss franc is anyway, shooting up through the roof because of that. So I mean, deflation will be a topic we're going to see in the future anyway. And if we can if you can have it right now, maybe we go through a correction phase one, two years. I believe that will be the best which can happen to Switzerland. But at the same time, people then need to understand what are the consequences, you know, that we would have. We have to reduce, you know, our our political system. You know, we need more people in production and, you know, producing something instead of leaving off tax money. We would have to really negotiate, you know, all the salaries because the money is appreciating and people will be able to buy more with a strong currency. So therefore, I mean, to be, you know, to keep the economy floating, you would have to to change a lot of things. And therefore, people need to understand how important monetary stability is, you know, or even in a gold standard. I mean, the best is that the money is appreciating over over the years. And when you put some money on the side, you can be sure that this money will buy you more in the future. But most of the people, they don't understand that because they have been forced into government, you know, sponsored education system, which is all about John Maynard Keynes and central planning, you know, and centralized stuff like this. So I think if a yes or a no at the end of the day, I believe it doesn't make it would make a big difference. But, you know, if it will not pass, I'm sure that we have brought up in the minds of a lot of people the right question so that they start questioning the actual system. And, you know, hopefully then a lot of Swiss people will start to think about, OK, gold, you know, it cannot be, you know, printed like paper money, so I will start building up my own stock. And I will understand that gold is my is an instrument to save and that it's also an insurance against, you know, all this crazy money printing and zero interest rate policy around us. Claudio, you mentioned that the Swiss franc is pegged to the euro at 120 percent. I just wonder if the average Swiss resents having euro inflation in effect imported into Switzerland via this peg. The government and the central banks, they were always saying, hey, we have to do it because we have to protect, you know, our export industry. And if we don't peg, then basically, you know, we're going to have higher unemployment and we're not competitive anymore. So they always come up with the same BS. And of course, you know, people are just, yeah, they buy it. They still buy it, you know, some of them or maybe even most of them. I really don't know that will, you know, we're going to see the outcome at the end of November. But, you know, I still believe a lot of Swiss have realized that we are losing our freedom and our liberty and we are losing our the federalistic structures and that we basically have to go back, you know, to more decentralization and to make sure that we decide certain things, you know, like Aristotle, you know, he used to say, they must the village cratia, you know, the rulers. So I mean, democracy might work, but on a very low scale, as long as people, you know, or just can make only can only decide about certain things which are really influencing them directly in, you know, the village or maybe in the municipality or in the city or even in the canton in which they are living. And I think that's the message we have to, you know, to bring forward. And also that's what I can see is, you know, is going on on social media and, you know, in certain right wing or populistic newspapers. But this is fascinating, you know, looking at Switzerland from the outside in, unlike the Scottish independence vote, as you mentioned earlier, there's there's not posters everywhere. There's not a vigorous debate going on in public or in the media. There's not a ton being written about it in the US financial media. It seems like there's a lot less buzz about this vote than the Scottish independence vote, even though, from my perspective, it could have a much greater sort of geopolitical and financial impact on the world as a whole. Absolutely. I fully agree with you. God, let me give you a quote from a recent article by Ron Paul here in the US. And I think this quote really encapsulates how a lot of Americans see the Swiss. And I'd like to know whether you think it's accurate. Quoting Ron Paul, he says, the Swiss people appreciate the work their forefathers put into building up large gold reserves, a respected currency and a strong independent banking system. They do not want to see centuries of struggle squandered by a central bank. The results of the November referendum may be a bellwether indicating just how strong popular movements can be in establishing central bank accountability and returning gold to a monetary roll. What do you think? Well, I'm sure, you know, that this quote fits to, you know, a lot of people in Switzerland, most likely not to everyone, of course. But as I said, you know, I mean, we have Switzerland is now 800 years old, roughly, you know, and we always we never had the centralised government, we never had, you know, one president. I mean, Ron Paul also said once, you know, the good stuff about Switzerland is that no one knows the name of their president because we have seven of these guys, you know, they have their response for certain portions. And so, I mean, yeah, we, you know, that's why I still believe, you know, I mean, we had, you know, we had a vote a few, few months ago for minimum salary, minimum wages. Then we had a vote promoting a centralised health care insurance company, you know, a new system. And the Swiss always said no. So I would not underestimate these the feelings, you know, and, you know, what they still they still they still have it in their genes. They don't trust centralised government that much. And we're going to see end of November, you know, how it will be. But Swiss people are always good for a surprise. Well, Claudio, I can only say that I wish the American people still had the same distrust of centralised government in their genes. But we have to leave it at that. Claudio Grass, thank you very much for a fascinating look into Switzerland. Ladies and gentlemen, have a great weekend.