Via FT Alphaville, this opinion piece by Sean Corrigan, of Diapason Commodities :

Data just released show that the SNB increased its holdings of foreign currency by an extraordinary CHF28.5 billion in April – almost CHF1 billion a day. This means that, in the first four months of this year, Herr Hildebrand had gobbled up CHF58.9 billion of a money nobody else much wanted to own – on top of which we have to add what is likely to be a sizeable sum of flight capital ‘absorbed’ in the first turbulent weeks of May (€9.5 billion on Wednesday morning alone, according to market rumour).

Making a simple estimate that the overall intervention this month has at least matched that undertaken in April (a decidedly conservative guess), the Bank will have amassed around CHF80 billion so far this year, a total of which the mighty PBoC would not be ashamed and one, even more remarkably, equivalent to around 45% of the Confederation’s entire private national income for the period.

Not only has the SNB therefore seriously diluted its existing citizen-shareholders’ equity stake in their own country (think about it), it has gone some good way into turning the Swissy into the Hong Kong Dollar of Europe, since fast approaching 70% of the asset side of its balance sheet is currently being held in the form of forex (160% of the monetary base, 38% of M1), putting the once-proud Swissy well on track to degenerating to mere currency board status.

With Hildebrand maintaining the stance in the Swiss press that reserves were, if anything, too low, before his shopping spree – and with the ECB’s ability to create extra Euros being both essentially limitless and in inverse proportion to its Northern members’ desire to hold them – the Swiss are in danger of selling out their remaining economic and monetary independence in the name of a mercantilist desire to buffer their admittedly important exporters from the malfeasance of their neighbours’ governments.

It will be interesting to see the ECB and BofE data on their currency purchases after this weeks market gyrations (FT Alphaville has a well written history of previous ECB interventions here).

How long the Swiss National Bank can keep buying everyone else’s money to maintain their control of the Francs rate is anyone’s guess but with this volume of purchases I imagine they are praying for the markets to calm down very quickly.