Protecting Savings

stimpson

seamus wrote: »

Prices of commodities generally regress towards inflation, so over a long-term of sample points you can show that almost anything tracks inflation, even if it's suffered spectacular ups and down in that period.

That is exactly my point. Now you can't store thousands of euro worth of cotton or sugar or oil in a safe, but you can do it with gold.

As Milton Friedman said:

Inflation is always and everywhere a monetary phenomenon.

The more dollars printed, the higher the prices of commodities priced in those dollars. Be it cotton, oil, sugar or gold.

With this in mind, what do you think is going to happen considering the .6 Trillion dollars printed last week?

maninasia

Gold is probably a good bet to protect it for the time being, due to the extraordinary nature of current times. Asian currencies and stocks are also a good bet.

P. Breathnach

stimpson wrote: »

... Here's a great chart to illustrate how well Gold tracks inflation:

So we should put our money into chocolate bars (best not to stash them under the mattress). Chocolate has the advantage that if all else fails, at least you can eat it.

seamus

stimpson wrote: »

That is exactly my point. Now you can't store thousands of euro worth of cotton or sugar or oil in a safe, but you can do it with gold.

OK, but to look at the OP's situation, he's looking for something that's safe over the short-medium term.

By the same above point, you can "store" your money in land and you'll be fine....over the long term. But I would be especially wary of storing your money in commodities, when the price of that commodity is undergoing massive changes, upwards or downwards, because that will always be short-lived blip before it regress to the mean.

Now, obviously a person could do their research/sums to identify when a commodity is coming out of a dip (as opposed to peaking), but if you're looking for a safer commodity over the short to medium term, you want something which has shown little real change in recent times.

digme

P. Breathnach wrote: »

So we should put our money into chocolate bars (best not to stash them under the mattress). Chocolate has the advantage that if all else fails, at least you can eat it.

It's wise to have a diverse portfolio.

stimpson

seamus wrote: »

By the same above point, you can "store" your money in land and you'll be fine....over the long term. But I would be especially wary of storing your money in commodities, when the price of that commodity is undergoing massive changes, upwards or downwards, because that will always be short-lived blip before it regress to the mean.

Timing is everything, and I personally wouldn't buy at the moment as there is likely to be a dip in the no too distant future, but you have no guarantees that prices will drop to below their current level.

As for property, that is simple supply and demand. If you think gold is in over supply you really should do your research.

Now, obviously a person could do their research/sums to identify when a commodity is coming out of a dip (as opposed to peaking), but if you're looking for a safer commodity over the short to medium term, you want something which has shown little real change in recent times.

Like what? Bonds? Stock market? Post Office?

Psychedelic

What about the credit unions, are they safe? Or just safer than BOI and AIB? Over the last 5 years I have managed to save over €10k in a BOI account. Would it be safer to move this money to my credit union account? I'm not interested in trying to make more money through investments or anything, just want to protect my savings.

I have been very careful not to blow all my wages on crap I don't need and I have no debts, so if the shit really hits the fan next year I would hope that at least my savings would be secure.

jank

seamus wrote: »

Oh....where have I heard a similar hackneyed phrase before. Wasn't it something like, "They're not making any more land"....?

Gold, like land, has a value underpinned by people's desire to buy it.

If it gets too expensive to purchase for day-to-day applications, people will switch to cheaper alternatives and your money is boned.

It's a commodity like any other, and if nobody wants it, it's worthless.

Graph

The red line is the one you want. Look at 1980 - height of recession. Over the next five years, the price collapsed and it lost 75% of its value.

Don't fool yourself into thinking that gold cannot lose. It can and it has.

Sorry but it is not a commodity, it is a currency hence why people sell notes and buy it in uncertain times. Of course there will be peaks and troughs but gold over years and years will hold its value.

Did I read somewhere that gold has the same value today as in roman times?

newman10

Psychedelic wrote: »

What about the credit unions, are they safe? Or just safer than BOI and AIB? Over the last 5 years I have managed to save over €10k in a BOI account. Would it be safer to move this money to my credit union account? I'm not interested in trying to make more money through investments or anything, just want to protect my savings.

My question would be if the Govt defaults on it s Debt how good is the Bank Guarantee and at what Bond Rate (eg 8.75-9.10%) should we become concerned about Bank Deposits

irishh_bob

its a tough one , does one withdraw thier savings and protect thier own interests yet at the same time , contribute to the destabalisation of the banks , i mean if everyone withdraws their savings ,will we have a functioning economy of any kind

Donal Og O Baelach

Well OP, I hope things are a lot clearer for you now.

digme

irishh_bob wrote: »

its a tough one , does one withdraw thier savings and protect thier own interests yet at the same time , contribute to the destabalisation of the banks , i mean if everyone withdraws their savings ,will we have a functioning economy of any kind

Your enabling the banks to destabilize our country if you loan them your money.

ART6

irishh_bob wrote: »

its a tough one , does one withdraw thier savings and protect thier own interests yet at the same time , contribute to the destabalisation of the banks , i mean if everyone withdraws their savings ,will we have a functioning economy of any kind

That's a point that's been bugging me. I have savings on deposit in AIB, and am seriously considering moving them out of the Eurozone and particularly out of the AIB, but if a lot of people start to do that we could have a run on the bank situation (mine bit won't make any difference mind!). It seems to me that the trick is in deciding when to do it before everyone else does, and given enough bad news it could occur at any time without any warning.

Given the state of our economy, what I wonder could our government do about it? They are already flat bust.

Mad Benny

ART6 wrote: »

I have savings on deposit in AIB, and am seriously considering moving them out of the Eurozone

How would you go about this? Say you have €20,000 to put on deposit.

Can Joe public fly over to Switzerland and open a bank account with 20k? Going up north is an obvious one but Sterling is not a safe bet either as the British are engaging in quantitative easing like the US.

The Valley

by the time we face up to the huge problems the banks are in our accounts will be frozen overnight, a limit on withdrawls will be in plave to stabilize the banks and stop a run on each institution.

It is not a straightforward option to just open an overseas account and hope this protects your deposit, there are loads of thread on this..

To protect your savings the decison boils down to this.

1) Do I trust the current govenment to protect me
2) Will my action by removing my deposits in fact add to the problem and if so am I being unpatrotic

Gold / land for me is not an option......

For me Cash is king.

Do I chance the burglars or the bankers

irishh_bob

Mad Benny wrote: »

How would you go about this? Say you have €20,000 to put on deposit.

Can Joe public fly over to Switzerland and open a bank account with 20k? Going up north is an obvious one but Sterling is not a safe bet either as the British are engaging in quantitative easing like the US.

thier may be ways round it for people in the know but should you head up to newry tomorrow and walk into a barclays bank or even ulster bank branch and ask to open an account , expect a short sharp rebuff , you have to be a uk resident to open an account

as regards opening an account in swiss francs , HSBC offshore account is an option , someone provided a link to thier site on another thread and thier was a virus of some sort in it btw

gizmo555

Without going to the trouble of opening offshore accounts, you could deposit money with:

• Rabobank (Dutch parent, AAA rated, Dutch guarantee scheme covering, I think, €50k or €100k for a joint account);
• Northern Rock (wholly owned by the UK government with a 100% unlimited UK state guarantee on deposits);
• National Irish Bank (subsidiary of Danske Bank with the Danish deposit guarantee of €100k as of 01/10/2010).

Fags are Evil

gizmo555 wrote: »

Without going to the trouble of opening offshore accounts, you could deposit money with:

• Rabobank (Dutch parent, AAA rated, Dutch guarantee scheme covering, I think, €50k or €100k for a joint account);
• Northern Rock (wholly owned by the UK government with a 100% unlimited UK state guarantee on deposits);
• National Irish Bank (subsidiary of Danske Bank with the Danish deposit guarantee of €100k as of 01/10/2010).

What about Ulster Bank? Are they not a British institution?

Chris_5339762

AFAIK Ulster Bank (in Ulster, not down here) are a special case in a sense and you can open accounts with them if you are UK or ROI resident.

ardmacha

thier may be ways round it for people in the know but should you head up to newry tomorrow and walk into a barclays bank or even ulster bank branch and ask to open an account , expect a short sharp rebuff , you have to be a uk resident to open an account

There isn't a Barclays Bank branch in Newry. But, I expect the Ulster Bank would be happy to help you. Among other things they helpfully point out that a ROI driving licence can be used as proof of address
http://www.ulsterbank.co.uk/ni/personal/daily-banking/current-accounts/useful-information/identity-proof.ashx

AFAIK Ulster Bank (in Ulster, not down here) are a special case in a sense and you can open accounts with them if you are UK or ROI resident.

Any bank in Newry will open an account for you, but you may wish to avoid Bank of Ireland and First Trust if you are trying to flee the Irish banks.

NIB will introduce you to the Northern Bank and they have good arrangements for transferring money to and fro.

gizmo555

Fags are Evil wrote: »

What about Ulster Bank? Are they not a British institution?

Yes, missed them, but they don't have the unlimited UK state guarantee that Northern Rock does, as they are not in UK state ownership. They are covered by the same Irish deposit guarantee as the main Irish banks.

ravendude

Personally, I think the risk to deposits from bank bust or is very, very low. I just can't see the EU allowing it to happen. The damage it would do to the euro would just be too much. There IMO is a risk (a very small one I think) though of a run on Irish banks and exchange controls being introduced for a time (not necessarily with the intention of us leaving the euro or anything).

With that being said, probably a euro account is safer than a sterling one, - as the risk of Sterling being devalued is probably more than the euro going bust. In this case you would lose significant money if your account is denominated in Sterling and you live/purchase in Euro.

So, its safer (probably) to open a euro denominated account outside the state if you're really paranoid.

You can open a euro denominated offshore account over the internet in most major UK banks. Eg. Barclays
http://www.offshore.barclays.com/

The Keytrade online bank (based in Belgium) is also a popular one.
http://www.keytradebank.com/en/banking

I still think the risk to deposits is very low, - I just can't see the EU allowing it to happen as it would cause severe damage to the big players in Europe via euro instability.

Sticky_Fingers

If you have problems opening an offshore bank account I would also suggest signing up for one of the online gambling sites, while not a bank there is very little chance they will go bust, just choose a big name reputable one and you should be set. You won't gain any interest on your money and it will be usually kept in Euro's though there are options to change what denomination your money is kept with some of the big name ones by using certain payment methods. Just another option for people to consider and remember, stay away from the tables:cool:

ArtSmart

seamus wrote: »

Honestly have no idea. When you consider that BOI and AIB's loans are underpinned by other foreign banks and massive lenders, there's the obvious cascade effect to BOI and AIB defaulting on their loans.

When Iceland's banks collapsed, between them they owed about €80bn (afair). The collapse of these banks and the subsequent default on this debt was felt badly by banks outside Iceland. AIB's loan book alone is about €120bn.

Tbh, there are all sorts of other problems here. A national default would effectively make Ireland's euro worthless - our cheques would be no good, in other words. I don't know what implications that has for the rest of the euro - it's a common currency so Ireland's euro can't be worth less than Germany's. It would appear in that case that the ECB would have to write all of our cheques for us in order to maintain the value of the euro, in which case they would need to near-total control over our fiscal policy because they're the ones writing the cheques.

Economic collapse, 30% unemployment, food queues, wheelbarrows full of euros...
Worse case scenario of course.

phew. am i glad they took us in all those years ago.

THE FOOLS!!

yha ha ha, yha ha ha. etc.

szjon

tails_naf wrote: »

I just want to say upfront this it a totally serious question, though perhaps it might seem I'm being a chicken little here. Morgan Kelly's article and track record of being right scared the bejesus out of me.

My father has his life savings in various accounts in BOI and AIB, etc. Its not huge money, but is a nestegg.

My question is should he move this out of Ireland, into foreign banks?
For example, if we are kicked out of the the EU, or the Euro, then with our own interest rates and inflation, money will soon be worthless, as happend in Argentina and countless other countries - or if AIB and BOI really do go bust with the mortgage defaulters, if push comes to shove the bank guarantee for deposits will mean nothing, sure it's guaranteed with our own money (i.e. taxpayers).

The more I think of it, the more the guarantee was some cod - all deposits are 'safe', only because future taxes will be used to pay them out if the banks can't - nice one - my future taxes will fund my bank deposits. The only people who it worked out for is the people who had money in Irish banks who aren't paying tax here. Nice one lads.

Anyway - long story short - if the above comes to pass, AIB/BOI go bust, mortgage defaulting, out of the Euro, would it have been prudent to have moved any savings we have out now, rather than wait?

First. no bank is safe.
Second. Paper money has and always will be devalued, it's called inflation. no interest rate will ever keep up.
Third. Stop asking others opinions. You are currently trusting a bank, this is folly. Trust no-one when it comes to your money.


Do your own due diligence, instead of asking on here use that powerful tool you have in front of you and make your own mind up.

Personally, I'm in precious metals, maybe you've missed the boat on that, maybe not. Hard assets are your friend.

Educate yourself, it's free. Look to history. Best of luck.

szjon

Swiss banks can be accessed throught the internet, google swiss bank account, euro accounts or francs, they will even give you a numbered account for around 110euro and it is accessed through a forex account, very secret and completely pointless but some like the subterfuge. Swiss banks are just as exposed to this too though, anyone who thinks Ireland is going down alone is sadly deluded, it is just one of the dominoes.

Cavehill Red

irishh_bob wrote: »

thier may be ways round it for people in the know but should you head up to newry tomorrow and walk into a barclays bank or even ulster bank branch and ask to open an account , expect a short sharp rebuff , you have to be a uk resident to open an account

This is not true. Non-resident accounts have always been available.

Kumejima

In business if you see that a company is going bust do you place an order with them and pay them up front? Do you send them stock and give them 3 months credit? Not if you want to keep your business.

I think there will now inevitably be a run on irish banks. I'd already been thinking of opening an account in Sweden but Morgan Kellys article sealed the deal. Its probably a trickle at the moment but it will turn into a flood as people simply wont be willing to take the chance that our political masters will look after us. I can already hear Lenihan insisting "there is no need for this panic, the deposits ARE secured, there is a legal obligation there ON the government, our EU partners ARE supporting us in this, etc etc.
Who can have faith in anything that comes out of his mouth now when every single statement over the last 2 years has revealed itself to be false.

They drove us willfully into the iceberg when voices were warning of its possible emergence, then instead of reversing as they were urged to, ripped along the side of it causing maximum damage. Now the water is pouring in, the engines are about to be flooded and the ship cant be saved anymore. People are going to start grabbing their valuables and looking for the liferafts. And could you blame them when the crew seem hellbent on scuppering the ship.

Yes it may hasten the inevitable but if some people manage to get a few lifeboats in the water, theyll at least be able to haul out some of the poor masses left drowning in the freezing North Atlantic.

Otherwise we're going down with all hands.

BeeDI

Fags are Evil wrote: »

What about Ulster Bank? Are they not a British institution?

For those of you who have stashed your euros off shore in euro accounts in case of AIB and BOI collapsing and state unable to deliver on it's guarantee, the following article from Bloomberg, might make your sense of security, a little less secure :eek: http://www.bloomberg.com/news/2010-11-16/euro-dominos-will-fall-until-currency-is-split-commentary-by-matthew-lynn.html

Those off shore euros, may not hold value too long if you believe the article.

Yitzhak Rabin

What are people's opinions on company shares? Are they "safe"? If you buy shares in a company that is denominated in Chinese yuan(not sure if you can), or US dollars, in, say the silver mining industry, would they be safe?