It’s a news that many Americans have probably missed in the chaos of what is happening here in America. But the news is important. It marks a new step in the development of the world recession caused by governments’ reckless borrowing and spending based on Keynesian interpretation of events. It also gives us the opportunity to see clearly the failure of two anti-Biblical economic theories that have proven, and will prove very soon, to be failures: mercantilism and Keynesianism.

The news – given in a short press release on September 6 – is that the Swiss National Bank declared that it would no longer tolerate the ever strengthening position of the Swiss Franc to the rest of the world’s currencies, and would put a cap on its rise. The Bank will refuse to exchange the franc for rates lower than 1.20 francs per euro. The language of the press release is very strong:

The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities.

In other words, the Bank promises to print as much money as necessary to buy as much foreign currencies as necessary to keep the value of the franc down. Why? What makes this necessary?

Because the strong franc is threatening the exports. The higher the value of the franc is, the more expensive the Swiss products become for buyers in other countries. They will buy less, and therefore the Swiss exporters will have to produce less, and have less profits, and their employees will have to go with lower incomes. Or some of them may have to be laid off, until the situation improves. This is the thinking of mercantilism: A nation’s wealth is produced by its exports, by the influx of money from other nations. With only one difference: When mercantilism was at its height as a practice in England, “money