Euro Exit contingncy plan

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monagt

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Hope fellow tweeters - not citizens of Planet Creighton have a contingency plan to survive euro end-game. When? Sooner than later?
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Jill Kirby. 21/7/12

Rest of pundits, Hobbs, Gurdgiev, Lucey all forecast the destruction of middle class wealth.

Has anyone seen a description as to how this will affect the normal person with a house, savings, etc........other that thro' a devalued Punt.


I rest my case then about you (and all of us) needing a contingency plan for when the €/bankruptbanks/sovereigns really does go pear-shaped.
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If it happened, rampant inflation, salaries rising at a slower pace than consumables.

Local government would likely ramp up local taxes. Property taxes would increase, etc. Government would freeze public sector salaries or rise them at nominal rate below inflation.

Capital controls could come in. Getting goods, services, capital, persons (bedrock of EU freemarket) in/out of country could be made more difficult.

Best protection IMO - gold and silver (hidden and in personal possession!), overseas diversified assets (stocks, commodities, property, bonds, currencies).

Regardless of the EU collapsing or not, I agree with Marc Faber who says that a 50% destruction in peoples wealth in the west over the next decade.

Capital preservation is the name of the game. Investing for income and trying to avoid the prying eyes of bankrupt governments attempting to take one's savings and investments through stealth or inflation.
 
Thx Ring. I'll add: [broken link removed] which is a money week article on currency collapse
 
The ultimate currency collapse was the Weimer Republic. Adam Fergusson has written a harrowing tale of the collapse in his book 'When Money Dies'.

He had an interview with moneyweek a while ago and said he didn't forsee hyperinflation in the West as in order to create hyperinflation you need a goverment truely hell bent on destroying the currency.

It doesn't just happen but takes a concerted effort of the goverment to do away with the principles of sound money to such a large extent that that trust is lost and the fiat paper is passed from one person to another as quickly as possible.

Rather he forsees that the current money printing in the USA, UK and to a lesser extent the EU (Although the ECB will most likely increase their printing press to avoid a Euro collapse at some point) as leading to years of double digit inflation at some point down the line.
 
I have looked at the recent history of currency devaluations and considered how an investor in say Puru or Argentina would have done with US$ Treasury Bills, investing in global equities or a balanced portfolio.

In the extreme cases of Puru and Argentina, investors would have been rewarded with returns in excess of 20 Million Percent!!

The analysis can be found here:

[broken link removed]
 
So Options are:
1. Globally diversified portfolio:
Risk from US - QE, UK- QE and Gilts Collapse and Euro Collapse
Equities overvalued - Mark Faber - western world gonna lose 1/2 of capital wealth
2. Gold:- could go either way?
3. Move to safe currencies - currency risk after poor transfer rates
4. Sterling Account: TX Rate, QE, UK is £1 Trillion in debt
5. Land: now looking overvalued.
6. Property: now looking attractive vis a vis Cost and Return

How do you build a plan to save your wealth?
 
I think you have hit the nail on the head here. There are no risk free options.

The antidote to uncertainty is diversification because none of us know for sure what is going to happen.
 
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