One essential fiction that nourishes dependency on the nation‐​state is to regard government securities as risk‐​free, which they cannot be. These sovereign bonds serve as the foundation for a financial pyramid of debt securities that encompasses everything from electronic cash holdings to marketable securities to volatile financial derivatives. Another fiction is built on top of this, that our current financial system, which has been decoupled from gold for quite a while now, can indefinitely operate in a permanent deficit. Although every financial liability is backed by a corresponding asset, neither the quality nor the liquidity of the latter is assured. If a critical mass of debt‐​holders ever tried to liquidate their assets and assert their claims to repayment, this fiction would suddenly be exposed as an empty promise. Dire financial and economic collapse could result.

Modern society, with its economic and political structure, is more dependent on money creation by central banks than it should be. Pumping liquidity into the system is supposed to be the last resort by which the central banks try to keep the economy growing, but it has become a first rather than last resort. In the US, the interest rate hikes announced for 2019 were not implemented; on the contrary, rates were cut once again. In addition, the Federal Reserve announced that it would stop its balance sheet contraction by September 2019 in order to pump new liquidity into the market. In Europe, the zero‐​interest rate trap runs even deeper. With Christine Lagarde as the head of the European Central Bank (ECB), it is the first time the position was occupied not by an economist but by a thoroughbred politician. Those responsible for her appointment may have supported her because she seems to be a suitably compliant companion on the path to more money creation.

The Swiss National Bank (SNB) has also ventured into this uncertain territory by massively expanding its balance sheet, especially in equities. Its US equity portfolio reached a new record high of CHF 91.2 billion at the end of March 2019. The reason for its numerous foreign currency purchases, of which equities account for 20 percent, is the strong Swiss franc. Doing so allows the SNB to justify the negative interest rates it has been charging on deposits of commercial banks since the end of 2014. Of course, this policy is not to the advantage of savers, but what else should the SNB do? It continues to enjoy a good reputation and behaves in an exemplary manner relative to other countries’ central banks. Nevertheless, it is being dragged along by global pressure to expand the money supply ever further. As Erasmus of Rotterdam once said: “In the land of the blind, the one‐​eyed man is king.” Switzerland is a one‐​eyed king who thinks that makes him Thor.