I was listening to a guy on Pat Kenny yesterday saying the liklihood of the Euro going belly-up was increasing. He mentioned that switching out of the Euro involved considerable risks due to FX fluctuations.
He also suggested that :
Ultimately he suggested that the Germans would be forced into a rescue but the price of that rescue would be effectively German control of national budgets & taxes going forward so this never happens again. Personally, I don't know how politically acceptable this will be.
- A solution was printing money (tried by the Yanks/Brits and failing/failed; vehemently opposed by the Germans).
- Eurobonds. Again likely to be rejected by Germans etc.
- Debt forgiveness. ( But the impact of this might be enormous).
Reports in the Telegraph suggests UK contingency plans are being put in place if Greece goes bust and the Euro fails. See here. The more I read about this, the more alarmed I am. I'm really not sure the Euro can survive all this or that savings are safe. Personally I am considering switching more savings into shares.
Just wondering,
If you are self employed and are putting money aside for your tax bill should you be paying it ahead of time to revenue in case anything sudden happens?
secondly, would it not be good exposure to have savings in a strong European Euro bank in a big economy like France or Germany as surely these countries would not have to devalue in event of Euro breakup unlike Ireland ?
What is a strong Euro bank. The biggest exposure to the Greek debt outside of Greece are German and French banks.
Someone told me a couple of days ago that BNP Parisbank are strongest. Is there anyway of accessing these Euro banks balance sheets or their level of exposure? Even better is there a report thats already done this?
I was listening to Peter Brown MD of Irish Institute of Financial Trading , on Pat Kenny yesterday saying the liklihood of the Euro going belly-up was increasing. He mentioned that switching out of the Euro involved considerable risks due to FX fluctuations.
He also suggested that :
Ultimately he suggested that the Germans would be forced into a rescue but the price of that rescue would be effectively German control of national budgets & taxes going forward so this never happens again. Personally, I don't know how politically acceptable this will be.
- A solution was printing money (tried by the Yanks/Brits and failing/failed; vehemently opposed by the Germans).
- Eurobonds. Again likely to be rejected by Germans etc.
- Debt forgiveness. ( But the impact of this might be enormous).
Reports in the Telegraph suggests UK contingency plans are being put in place if Greece goes bust and the Euro fails. See here. The more I read about this, the more alarmed I am. I'm really not sure the Euro can survive all this or that savings are safe. Personally I am considering switching more savings into shares.
thier will be a stock market collapse if the euro dies
I am seriously considering opening a non euro a/c.What are the procedures involved, and has anyone any opinions/advice?
The fact is that the world has never, ever been here before. Comparisons with Argentina just don't stack up. Breaking the peg of the peso with the US dollar is logistical chicken feed compared with withdrawing from a currency union.
I think your interpretation is a little off there. The Euro has weakened every time there was news about the crisis getting worse. Only when there was some sort of intervention that essentially kicked the can down the road did the Euro increase again. And it has only been increasing against other very bad currencies like Sterling and US$ in an ugly contest. Against currencies like the CHF, AUS and especially gold the Euro has been decreasing significantly.There is no way the Euro will collapse. The more this crisis deepens the more the Euro appreciates. Playing tough with Greece (even to the point of default) is good for the Euro as it shows that the ECB/EU are not prepared to print themselves out of this crisis as the US/UK are attempting.
The reason people are buying German Euro bonds has not so much to do with confidence in the Euro, but with confidence in the German economy and the fact that if the Euro failed the Deutsche Mark would once again be seen as one of the go to currencies.10 year, nay 30 year, German Euro bonds are amongst the lowest yielding assets in the world proving the utter confidence the market has in the currency per se.
I agree with your arguments that led to this conclusion. I think that leaving the Euro would be pretty much impossible at present unless there is a significant default on debt.Ireland might restructure, Ireland might even default with EU agreement, Ireland will never unilaterally leave the Euro.
This is true, but remember that the Euro had nothing to do with providing that stability. If anything, you can argue that the EMU has made conflict, at least verbal and political, more likely.Many of my work colleagues are middle aged Germans and French and one point they always make about the EU, is that whatever else it has at least prevented war in Europe for the past 60 years and this is very deeply engrained in their minds - most have heard stories for their parents about what war means. So one should keep in mind that unlike us, it is not just about economics for them...
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