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• Macro Thoughts

''Vertigo'' and the Swiss National Bank (SNB)

In September we borrowed a quote from the 1949 classic, "The Third Man", to introduce the wizardly tricks of the Swiss National Bank. One month later, the analogy with "Vertigo", the 1958 psychological thriller film directed by Alfred Hitchcock, seems more appropriate to illustrate their latest currency intervention numbers.
Investments Office, November 2012

"The film popularized the dolly zoom, an in-camera effect that distorts perspective to create disorientation, to convey the protagonist's acrophobia. As a result of its use here, the effect is often referred to as "the Vertigo effect"." (Source: Wikipedia). Unlike the SNB's currency interventions, the film received mixed reviews upon initial release, but has garnered acclaim since and is now often cited as a classic Hitchcock film and one of the best movies of all time.

 Switzerland's Foreign Currency Reserve Assets

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 The SNB's foreign currency reserves (red line) stand above 70% of GDP, compared with the central banks in China (blue line, at 40%) and the Bank of Japan (green line, slightly above 20%)

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Total Assets of Central Banks compared to GDP: above 80% for the SNB, followed by the ECB, the BoJ and the BoE, all three around 30%, while the Fed (green line) stands below 20%
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 SNB's foreign currency reserves, Swiss GDP and the EUR/CHF rate

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Money Supply Mo & M2, GDP, Velocity and the Multiplier

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