Berner Platt: Science or Hocus Pocus?

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The President of the National Bank announced his resignation. Now everyone emphasizes that the main task of the Central Bank is price stability. It also indicates how successfully the Swiss National Bank (SNB) has coped with this task in recent years. In fact, official data from the Federal Statistical Office (BFS) shows that inflation in 2023 will be a moderate 2.1 percent.

However, the way this inflation is calculated is a joke. The main driver of rising costs is health insurance premiums, which are not included in inflation calculations. In 2024, health insurance premiums will increase by 8.4 percent. If you ask older couples or families with children what their biggest expense is, the answer will always be health insurance premiums.

The Federal Statistical Office and the SNB can continue to tell us that inflation in Switzerland is under control if the largest block of costs is not counted statistically at all. The BFS justifies this by saying that premiums are not included in the state index for conceptual reasons. Presumably because the concept is to demonstrate low inflation.

In addition, the National Bank has been expropriating depositors with negative interest rates for years. Likewise, all those who dutifully pay into their mandatory pension fund are forced to watch as the conversion rate comes under pressure due to low interest rate policies, with promised future pensions being reduced as a result. Technical expropriation with serious financial consequences for medium-sized businesses.

As the SNB’s balance sheet ballooned to almost 1,000 billion francs and it invested in international stock markets, it suffered a loss of 132 billion at the end of 2022, meaning there will no longer be any distribution of profits to the federal government and the cantons. .

What this fantastic balance sheet inflation has to do with price stability will have to be explained again at some point.

* Alfred Heer is an entrepreneur and member of the National Council of the Senior Vice President of Zurich. He writes for SonntagsBlick every second Sunday – taking turns with Green Party national councilor Aline Trede.

Source: Blick