How to explain "Euro collapse - buy dollars" to freaked out relatives

SupaNova

Scofflaw wrote: »

It means exactly and literally what it says - one euro is worth one euro. If you have ten euro, and exchange it with me for ten euro, the exchange is exactly equal. There is no currency fluctuation.

Sure, ten euro now and ten euro in ten years time aren't equivalent, but you have to add the rider in yourself in order to confuse yourself, as you appear to have done.

amused,
Scofflaw

I'm surprised you would bother make such a post.

Equally amused,
SupaNova

Scofflaw

SupaNova wrote: »

I'm surprised you would bother make such a post.

Equally amused,
SupaNova

Well, absent the slightly surprising confusion over inflation, the point was simply that you should think a bit before incurring a currency exchange risk that may well be needless.

cordially,
Scofflaw

maninasia

maxmo wrote: »

Buy dollars....Make sure they're the silver ones!

Buy silver at what price eh?
If you bought in May you would have lost up to 40% of the value of your 'investment'. It's very volatile.

I've thought about it and if you could buy oil and store it that's what I'd buy. They are not making anymore of it (it's getting more difficult and expensive to extract) but demand will increase for the foreseeable future.

Gold is probably a good option for the moment until the Eurozone/US goes through some type of default.

maninasia

Scofflaw wrote: »

Well, absent the slightly surprising confusion over inflation, the point was simply that you should think a bit before incurring a currency exchange risk that may well be needless.

cordially,
Scofflaw

I've thought about it for 0.00001 seconds and decided I'm going to change my money out of Euros , Swiss Francs, Asian currency, even GBP will do fine. Although there is talk of the US debt ceiling being breached, credit downgrade etc. the situation doesn't seem as messed up as the Eurozone overall.

Can't see anyway out of this crisis other than some of the PIGS dropping out of the Eurozone (which will trigger an attack on the currency and panic) or an enormous debt right off which will also impact the relative value of the Euro vis a vis other currencies.

SupaNova

maninasia wrote: »

Can't see anyway out of this crisis other than some of the PIGS dropping out of the Eurozone (which will trigger an attack on the currency and panic) or an enormous debt right off which will also impact the relative value of the Euro vis a vis other currencies.

It will be an interesting few years, it seems every effort is being made and will be made to keep the euro together until the world gets a new Bretton Woods.

Misty Chaos

One most wonder if all this talk of the repercussions of a global financial collapse is actually really nothing more than fear mongering - Then again, as we all know, the media thrives on fear mongering. People living in fear = being easily controlled.

That said and my knowledge of the markets isn't that great but I know enough that buying dollars is a bad idea seeing that America is practically bankrupt at this stage.

Interesting times indeed.

Scofflaw

maninasia wrote: »

I've thought about it for 0.00001 seconds and decided I'm going to change my money out of Euros , Swiss Francs, Asian currency, even GBP will do fine. Although there is talk of the US debt ceiling being breached, credit downgrade etc. the situation doesn't seem as messed up as the Eurozone overall.

Can't see anyway out of this crisis other than some of the PIGS dropping out of the Eurozone (which will trigger an attack on the currency and panic) or an enormous debt right off which will also impact the relative value of the Euro vis a vis other currencies.

Sure - and the US thing is a bit of a technical issue on a piece of grandstanding.

However, my view of the euro would be that very large market forces like China want there to be an alternative to the dollar, that there is no credible alternative to the dollar apart from the euro, that the eurozone states have invested enormous political capital in the euro and continue to consider it something to be supported, and that eurozone GDP dwarfs the scale of the crisis. So I don't see the euro blowing up over this as the huge certainty other people seem to.

cordially,
Scofflaw

SupaNova

All the euro doom is based on Greece, the worst of the PIIGS. Greece has fiscal deficits as a % of GDP that are similar to the US and a little bigger debt to GDP. In that sense i would consider the US a giant pig. So i would see it as pointless to move money into dollars. And in ways Greece is better off that it doesn't have its own currency to print, no doubt they would be on their way to hyperinflation if they had their drachmas.

Scofflaw

SupaNova wrote: »

All the euro doom is based on Greece, the worst of the PIIGS. Greece has fiscal deficits as a % of GDP that are similar to the US and a little bigger debt to GDP. In that sense i would consider the US a giant pig. So i would see it as pointless to move money into dollars. And in ways Greece is better off that it doesn't have its own currency to print, no doubt they would be on their way to hyperinflation if they had their drachmas.

Which takes me back to the vexed "a euro is a euro" comment. If the US decides to print its way out trouble (or the UK), then those currencies will fall against a currency where that isn't happening. So one would be getting out of the euro (the currency bloc least likely to print its way out of trouble) in order to get into currencies where that's a real risk.

If you're living inside the eurozone, then your money being in euros means that you're not exposed to the kind of fluctuations you would be if you shift your money into another currency. And at this stage, it's really hard to see that that's an option requiring only "0.00001 seconds of thought".

cordially,
Scofflaw

PhatPiggins

n900guy wrote: »

There is no crisis because we are in the Euro. In the ECB's eyes, there are zones of high and low risk in the EuroArea, but ultimately, there is one, single giant euro area. Portugal, Greece and Ireland account for a small % of the overall EuroArea. So, it is far more likely that the dollar or pound would collapse (well, even more than it has already - 50-60% for the dollar and 30% for the pound, both compared to the euro) seeing as the periphery of the UK is also screwed (Wales, northern England) and vast swathes of US states are entirely bankrupt (California for example).

Furthermore, fi the Euro did restructure (literally - a core northern europe vs outside), why would Netherlands, Germany, etc., suddenly be holding useless currencies? They have excellent economies, so naturally will have a stable euro currency.

The only people that want the euro to disappear are wall street and city of london, because the EuroArea is one of the biggest economies in the world, and they cannot profit out of it unless it's picked apart. This is why the "crisis" exists in primarily english-speaking newspapers, but you rarely if ever get the anti-euro sky is falling hysteria here in Holland or Germany.

How refreshing. Have you got a blog/website I could subscribe to?

srsly78

All savings in euros = eggs in one basket.
All savings in dollars = eggs in one basket.

Holding savings in dollars, sterling, euros, and swiss francs = minimise risk.

irishh_bob

maninasia wrote: »

Buy silver at what price eh?
If you bought in May you would have lost up to 40% of the value of your 'investment'. It's very volatile.

I've thought about it and if you could buy oil and store it that's what I'd buy. They are not making anymore of it (it's getting more difficult and expensive to extract) but demand will increase for the foreseeable future.

Gold is probably a good option for the moment until the Eurozone/US goes through some type of default.

gold was certainly a good buy had you bought at the begining of last week , it was at 1030 per ounce , its now at 1120 per ounce yet such is the level of nervousness within the single currency , it could be 1220 within another week

maninasia

My problem is with countries like Italy and Spain, I don't think they can go through a crisis and the Euro remain unscathed. Both of those countries are looking extremely ropey at the moment.

http://www.boards.ie/vbulletin/showthread.php?t=2056323161&page=2
http://www.irisheconomy.ie/index.php/2011/07/11/fasten-your-seat-belts/