Voters yesterday rejected a referendum requiring the Swiss National Bank hold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold. Had it been approved, it would have led to purchases of at least 1,500 metric tons. What does this mean for Switzerland? It’s basically now riding a currency pegged to the Euro and will fall if the Euro falls.

This is a devastating blow for the Swiss and one wonders how they could have reached such a terrible conclusion. With the new pressures to violate their own laws and report American tax dodgers, which have in effect forced bankers to refuse to do business with Americans in many cases, Swiss becomes like during WWII largely a banking haven for Germans.

It’s a sad state of affairs and long term this vote is going to hurt the nation. One can only hope that soon they will try again with more wisdom and succeed. And perhaps they can increase their gold requirement to 30% and un-hitch to the Euro at the same time. Once the Euro starts to fall, there is little that can happen to save Switzerland otherwise.