In the most ironic story of the day, the company that makes the paper that Swiss banknotes are printed on was just bailed out by the money-printing, stock-purchasing, plunge-protecting, savior-of-global equities…Swiss National Bank.
While The SNB has a long and checkered history of buying shares in companies… as we have detailed numerous times, it is no stranger to pumping money into companies all over the world…
Including Apple, Alphabet, and Microsoft…
But, as Reuters reports, this is its first acquisition in decades.
The central bank said on Thursday it was purchasing a 90 percent stake in Landqart AG after the company – which makes the polymer material used in new 10-franc notes – got into financial difficulties.
The Swiss National Bank certainly has the 'currency' to do the bailout – its share price is up over 250% in the last 2 years…
Buying the company was the best solution to avoid interruptions in the production of the Durasafe paper, described by SNB Chairman Thomas Jordan as “integral” to the safety of new notes.
“In case the Swiss National Bank was not ready to .. buy the company we would have had the risk of liquidation of the company, that would have been orderly or less orderly,” Jordan told a press conference.
“The risk would have been an interruption of the production of Durasafe which (would) be very problematic for our bank note issuance that takes place at this moment.”
The deal came about after an overseas customer unexpectedly cancelled an order with Landqart, which employs 260 people, leading to a big drop in sales and cash flow problems. The company reduced workers’ hours to deal with the crisis, which the SNB said posed a “direct and existential threat” to Landqart’s survival.
The SNB said Landqart would be provided with enough funds to ensure its survival, with between 5 and 15 million francs earmarked for the project.
“As long as the public wants to have bank notes, we will provide them with bank notes,” he said.
“As long as this is the case we have the ambition to provide state of the art and very safe bank notes.”
Does anyone else see the irony that in a world that is 'printing money' at the fastest rate in its history, one of the biggest manipulators of markets via its balance sheet is forced to bail out it money-manufacturer…
Or is this a symptom of the global war on cash?
via http://ift.tt/2CSPEdk Tyler Durden