# Euro going bust



## FionaL27 (6 Aug 2011)

Hi,

What are the chances of the Euro going bust? Will we lose the money we have in banks if this happens?


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## Guest105 (6 Aug 2011)

Your query has has been discussed to death on this forum, just do a search, read what's there  and then make up your own opinion on the issue.


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## Marc (6 Aug 2011)

I would suggest that the chances are not zero but the chances are extremely slim such that they are certainly not grounds to be concerned.

For evidence of this you only need to look at the Euro exchange rate recently which has been appreciating against many currencies. 

The markets clearly don't believe that it is time to turn off the lights on the euro.

On a year to date basis at the end of July 2011

The aussie dollar, us dollar,Canadian dollar, hong kong dollar, Japanese yen and British pound have all lost against the euro.

This doesn't look like a currency about to collapse to me.


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## Duke of Marmalade (6 Aug 2011)

Absolutely agree with _Marc_ and as for that silly other theory that the euro might break up explains much better than me that that is next to impossible. And yet Shane Ross tries to start a rumour that the Central Bank are secretly printing punts nua.


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## Gekko (6 Aug 2011)

Marc said:


> I would suggest that the chances are not zero but the chances are extremely slim such that they are certainly not grounds to be concerned


 


Duke of Marmalade said:


> Absolutely agree with _Marc_ and as for that silly other theory that the euro might break up explains much better than me that that is next to impossible


 
I met with two experts on Friday and the general consensus was that there's about a 20% chance of Ireland exiting the Euro and introducing a "Punt Nua".

That's a pretty significant chance.

To say that the chances are "extremely slim", "not grounds to be concerned" or "silly" is just as irresponsible as Shane Ross's scaremongering.


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## Duke of Marmalade (6 Aug 2011)

Gekko said:


> I met with two experts on Friday and the general consensus was that there's about a 20% chance of Ireland exiting the Euro and introducing a "Punt Nua".


Market Research theory would hold that two is an insufficient sample size for assessing the "general consensus" even if they are two experts. Read the link which I posted and ask one of your experts how exactly she would address the overwhelming logic in that note about the total impracticality of exiting the euro.

Come to think of it Shane Ross is incapable of being irresponsible, as people are wise to his buffoonery.  If the CB announced that it was printing Punts Nua there would be the mother of all bank runs.  If the Irish Times editorial suggested that possibility there would be a similar reaction.  Shane must be disappointed that his rumour caused scarcely a ripple.


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## FionaL27 (6 Aug 2011)

Thanks for the people that replied with helpful answers. You have put my mind at ease somewhat as I was worried about my savings. I am trying to save hard at the moment for a deposit for a house


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## Gekko (6 Aug 2011)

Gekko said:


> I met with two experts on Friday and the general consensus was that there's about a 20% chance of Ireland exiting the Euro and introducing a "Punt Nua"


 


Duke of Marmalade said:


> Market Research theory would hold that two is an insufficient sample size for assessing the "general consensus" even if they are two experts


 
What does market research theory say about reading posts carefully?

The general consensus from the meeting was...


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## Duke of Marmalade (6 Aug 2011)

The dictionary definition of "general" refers to the prevailing view.  I stand corrected, you meant that the prevailing view of the two experts was general, to that extent you are of course correct.  Humblest apologies.


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## Marc (7 Aug 2011)

How many experts make up the Market?

The exchange rate for the Euro is surely the consensus view.


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## kdoc (7 Aug 2011)

One of the few men who correctly predicted Ireland's financial crisis believes the euro will be saved:
http://www.independent.ie/national-...all-bad-but-we-have-big-problems-2841949.html


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## Duke of Marmalade (7 Aug 2011)

kdoc said:


> One of the few men who correctly predicted Ireland's financial crisis believes the euro will be saved:
> http://www.independent.ie/national-...all-bad-but-we-have-big-problems-2841949.html


 Yes, and in this article , just below that, Peter Oborne warns people who might be going on holidays on the continent to bring US dollars, just in case "euros suddenly cease to be the legal currency". He also warns not to accept euro notes with the code Y, S or M (being Greek, Italian and Portuguese). Peter Who? Apparently the article was sourced from the Daily Telegraph. Wouldn't the Brits just love to see a euro collapse - they are going to be disappointed.


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## delia (7 Aug 2011)

*Failed States and the Euro*

I am of the opinion that the British were wise to stay out of the Euro.There is no major issue there yet. I would not like to have the Irish have a major input into economic and fiscal issues of the U.K. as the Irish have constantly made a mess of their own country and now have to hit the cattle boats again in the form of cheap airlines to get out of their failed state.
They may know a little about religious myths and paedophilia but after that forget it!! Their politicians are laughable.


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## horusd (7 Aug 2011)

Duke of Marmalade said:


> Absolutely agree with _Marc_ and as for that silly other theory that the euro might break *up **this note **explains* much better than me that that is next to impossible. And yet Shane Ross tries to start a rumour that the Central Bank are secretly printing punts nua.


 

Very interesting article Duke.  Whatever happens I don't see the euro's demise. It seems more likely that euro leaders facing stiff home opposition to rescues, are waiting for the crisis to build enough to warrant the measures needed, and to get them by their electorate.


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## Chris (7 Aug 2011)

Duke of Marmalade said:


> Absolutely agree with _Marc_ and as for that silly other theory that the euro might break up explains much better than me that that is next to impossible. And yet Shane Ross tries to start a rumour that the Central Bank are secretly printing punts nua.



Interesting article, and I agree that moving from the Euro to a weaker currency would not be possible. But one thing that the author of the article gets wrong is the impact of the Euro on German exports. I posted the following in another thread and facts speak for themselves:
There was a very interesting article in the German Wirtschafts Woche that completely contradicts the idea that Germany made bigger export gains after the introduction of the Euro. (http://www.wiwo.de/politik-weltwirts...euro-475574/8/)
You can run it through google translate to get the full text, but here is the important part:
- after the introduction of the Euro, Euro zone exports grew by 5.2% per year
- at the same time exports to non Euro zone countries grew by 7% per year
- from 2000 to 2010 GNP grew by 1.1% annually
- from 1990 to 1999 GNP grew by 2.3% annually

Germany was doing better before the Euro, and after the introduction of the Euro it's exports grew more outside the Euro zone than inside.


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## Jim2007 (7 Aug 2011)

Chris said:


> Germany was doing better before the Euro, and after the introduction of the Euro it's exports grew more outside the Euro zone than inside.



I don't see a reason why switching currency should make any big difference!  At the end of the day currency just facilitates the exchange of goods and services and while it might make a small difference in the consumer market, it's not coming to be a major driving force when it comes to the commercial world, since most players involved are already well skilled in foreign exchange transactions....

Jim.


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## shnaek (8 Aug 2011)

kdoc said:


> One of the few men who correctly predicted Ireland's financial crisis believes the euro will be saved:
> http://www.independent.ie/national-...all-bad-but-we-have-big-problems-2841949.html



But at what cost? The politicians will want to save it. And the Chinese and the US will want us to save it. But the people in the richer countries will not stand idly by while their taxes are being taken to pay for higher wages, welfare and conditions than they receive themselves. 

So what will they do when they are forced into it? Will there be a rise of the right? We are seeing that already. Will the German people take it to court? Probably. Will the spending nations be happy to have a super authority supervising their budgets? They won't be happy about it, but they will have to accept it. 

This will not be a smooth ride, not for many years. Full integration, or full breakup. That is the choice that faces Europe. It's a casino black or red bet. And I'd be holding my money and not betting on either right now.


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## Jim2007 (8 Aug 2011)

kdoc said:


> One of the few men who correctly predicted Ireland's financial crisis believes the euro will be saved:
> http://www.independent.ie/national-...all-bad-but-we-have-big-problems-2841949.html



Yes and even stopped clocks are right twice a day!  At any given time, you'll find an array of economists offering varying views, so it should not be a surprise that at least one of them is going to be right!!!  The fact that they can't deliver a consensus view at proves to be accurate, draws the whole exercise into question.

Jim.


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## Palerider (13 Aug 2011)

Top man Jim 2007, I could not agree more, maybe its just me but there does seem to be a lot of negativity on AAM about this topic...people do need to diversify whether Euro stays or changes, diversification works when it is considered, the do nothing approach with deposits is fine if you are within the State Guarantee, getting on a plane to go to Germany will minimise your deposit returns and at the other end of the scale buying Gold is not for the faint hearted.....but do figure out a way that meets your personal needs to diversify somewhat in a controlled way....whether or not we lose the €.


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