run on a currency

MyPeopleDrankTheSoup

Anyone have any links to info on currency runs and how they work, and how Ireland was saved from default by being in the euro. I can't seem to get my head round it, bit slow

derry

georgiecasey wrote: »

Anyone have any links to info on currency runs and how they work, and how Ireland was saved from default by being in the euro. I can't seem to get my head round it, bit slow

Its more like musical chairs .There isnt eneough chairs for all the players when the music stop.There isnt eneough real money when the joe soap plebs cop on that the well heeled have raided the liquid cash and are long gone to off shore climes .So then there is mad feeding frenzie rush from the remaining suckers to get thier hands on real cash.Think of the Euro as a sort of echo chamber that gives the impression that the music is still going when in fact it stopped ages ago.
If you money is still in a bank yeah then your right your a bit slow



links

http://www.infowars.com/run-on-the-bank-americans-could-lose-their-deposits/

If punters feel money is bad they try to take it out so as to buy gold

http://www.getoutofdodge.net/bullion-sales-hit-record-in-rush-to-safety/



Derry

MyPeopleDrankTheSoup

so where's all your money, tucked under the matress

derry

georgiecasey wrote: »

so where's all your money, tucked under the matress

I wish .Me I am another joe soap no big depts no big saving roughly cancells out each other self employed and only barely keeping abreast of bills and small 2 bedroom economic house and ten year old smalll car due for NCT soon . But I ant stupid to hope that this regime who darn well knew what was coming down the track as they lined thier pockets that eventually we would see the king had no cloths and that maybe printed paper is only printed paper

Oh yeah check out this link

http://business.timesonline.co.uk/tol/business/columnists/article5729034.ece

reprinted for legitmate education reasons

timesonline.co.uk wrote:

Jon Moulton, the private equity chief, warned a City lunch this week that he feared serious civil unrest. There was, he said, a 25 per cent chance of one of the 15 member countries of the eurozone pulling out of the currency club.

check out the punters comments left at the bottom of the times artical very interesting

so one of the 15 EU zone countries is shaky who wants to hazzard a guess which one "eani meany miny mo Greece Portugal Spain Italy ROI?? catch a hot potatoe by the toe.
It might fit with my link today which they closed down claiming it was rubbish

http://boards.ie/vbulletin/showthread.php?t=2055488933

seems the times can say things and it isnt rubbish but if I say it its a risk that the Euro will fragment thats rubbish

go figure



derry

Time Magazine

derry wrote: »

There isnt eneough real money when the joe soap plebs cop on that the well heeled have raided the liquid cash and are long gone to off shore climes .So then there is mad feeding frenzie rush from the remaining suckers to get thier hands on real cash.

Georgiecasey, as you might have guessed, derry doesn't really know what he's talking about. Currency speculation is not comparable to a game of musical chairs.

On a simple level, think of it as one big company muscling out the competition by selling below-price for a while. It's much harder to do that when the competition is most of Europe.

derry wrote: »

seems the times can say things and it isnt rubbish but if I say it its a risk that the Euro will fragment thats rubbish

There's a big difference between saying there's a 25% chance one member of the EMU will pull out and saying you think the Irish government are already printing punts.

I've been asked several times to improve the signal to noise ratio on this forum. You know where the Conspiracy Theories forum is. Last chance, derry.

nesf

I'll just try to give some explanation of the problems of having a thinly traded currency, like what Iceland has or what we would have if we still had the Punt.

The first is the vulnerability to currency runs. If a currency is thinly traded (i.e. not much of it being exchanged on any given day) it does not take many speculators to drive it down. A large currency of reserve like the Euro or the Dollar are very heavily traded, something like 3 trillion US dollars exchange hands daily. This means you need enormous groups of speculators to drive a currency down. Think of it this way, it's far easier to make a small group of people very negative about the future of something than it is to do that for thousands of people.

The second point is linked to the first. The Icelandic central bank for instance could only give loans in the Icelandic currency to its banks. Banks in a country generally have foreign exchange liabilities (i.e. they owe money to people and it has to be paid back in a currency other than their home currency). The problem here is, if a bank needs to pay off a huge loan in say Sterling, and they need to get a loan from their central bank that is in Icelandic Krona, they need to exchange all those Krona for Sterling to pay back the loan. The problem with a thinly traded currency is that there won't normally be that much traded in a day, so it'll distort the market. When you have more sellers than buyers the price generally drops. Speculators can drive down a currency value in anticipation of this happening. Even the suggestion that a central bank might have to do such a thing can drive the value of the currency down as people who hold Krona in this case try and sell it off before any of the banks need to sell off Krona to buy Sterling in our example.

In a heavily traded currency like the Euro or the Dollar, the volume being traded each day is so huge that it'd barely be noticeable if say an Irish bank had to convert a billion Euro into Dollars over a week. The currency that your central banks can give loans in makes an enormous difference to the stability of a small country because of factors like these.


There are other aspects to this but one of the other guys can go into more detail on the technical aspects of a currency run and people shorting currencies etc.

MyPeopleDrankTheSoup

Cheers nesf, that made perfect sense.

derry

georgiecasey wrote: »

Cheers nesf, that made perfect sense.

confused

the original question is???

georgiecasey wrote:

Anyone have any links to info on currency runs and how they work, and how Ireland was saved from default by being in the euro. I can't seem to get my head round it, bit slow

If you want to know about the subject Nerf spoke about that's more like what is currency exchange value a currency but not much about bank runs there??? that I could see

In that case what Nerf shows the numbers are huge.All the total reserves of all the governments and government agents in the world combined would only match 1% of the volume of the money that is traded world wide in one day.It sorta like a flea ( the government and government agents )trying to stop a train or dictate which direction they want the train to go( and the train is the vast sea of cash from all sorts of investors out there tring to guess where the proifits are )

(The term governments shall be used loosely to mean government and central banks and banks who follow government policy and other agents that tow the government policies .That is in the real world where the dividing lines are exactly isn't clear when your talking about more liberal economic countries like USA and more controlled regimes like China all who buy and sell major currencies using agents and proxies and thats not before we factor in hidden agents in the worlds currency markets and sympathetic nationistic private investors)

So if the world figures the USA dollar is bombing all the governments bodies combined cant stop the rush for the exit and the USA dollar will bomb.
In the face of that tsunami the government bodies wait their time to see where the bottom is .With strategic purchase of the USA dollar they can test andd sometimes see if they can slow down the decent or arrest it or even reverse the trend ( if the policy is to save the dollar)Some speculators private and and other governments bodies may also be apposed to that and will counterattack by seeling the dollar so as to drive the currency buyer feeding frenzie herd onwards to bombing the dollar past it real bottom.

Its called floating the currency it will tend to find its true value in a open market so they tell us .

For countries like China wanting to keep selling its exports to the USA they might sell their currency the Yuan to bomb it value and buy dollars to keep the dollar up as a low dollar isn't good for their exports .
For the Euro as it gains value then exports and services like expensive BMW and French wine or tourism etc can falter and cause massive unemployment there .This can later maybe lead to a collapse of the Euro as some weaker countries like Greece and Spain cant take the heat and exit the euro . Higher unemployment especially if tourism or major industries go belly up from being too costly with a high Euro can possibly force a break up of the Euro if the Ultra high Euro continues for too long.Some figure ROI is above the threshold that make Greece and Spain more shaky.I am not one the some . But higher up economist types with impecable abilties to predict future trends will debate that I am wrong.


Along side that there is other things like gold sales or bonds whatever which might increase if every body figures paper money of any sort is a bad bet so all currencies can bomb together as the market rushes to convert money into gold diamonds property whatever

All nice stuff but wont tell you when to run to the bank to get your money out and convert it to something else like the USA dollar or gold or just stuff paper money under your bed which was the question you asked originally.

If you changed your mind on the question err it helps if you let us in on it

Ultimately of the many many reasons the most often reason that can cause a regional run on banks is punters have lost faith with the local currency or the local regimes ability to control the finance whatever.

For whatever reason weather its Argentina in the 1990s or the the Rotchchilds in USA 1913 it always seems the cute whores at the top have long gone with the loot as the masses at the bottom figure the paper in the bank is a bad bet and rush to convert it to something else.

Some would call that ability to figure the future trends smart money and others call that a rigged market and some go further and call it conspiracy.

All nice stuff but wont solve the joe soaps problem at the bottom to know when to rush the bank to get his wad out.

The joe soap as long as he believes in the magic trick that a piece of printed paper is money is OK until something ruins that dream and he enters a nightmare like Wiemar Republic or Zimbabwe event and hyper inflation .

For us joe soaps to get the real picture it helps to have a easier picture Its called the sea shell issue and invest in sea shells.An African tribe deep in the jungle of Africa one months walk through deep jungle used sea shells for money .This was because it had value it was a real commodity so deep in a inaccessible jungle as only few seashells on backs packs on the backs of locals could ever get there . A smart ass European on the coast got wind of that and filled a truck up with sea shells.Then he employed a lot of natives to cut a track through the jungle for the truck until he got to the seashell currency land .With sea shells he bought up everything like elephant tusks and gold whatever for buttons err seashells.The next day sea shells were not worth a toss and the sea shells currency collapsed overnight .I assume they went to the gold standard or something else as a measure of wealth after that.

Now there in Africa at the time there was no sea shell banks but in our case ROI we got for want of a better word sea shell banks where we store our sea shells in the form of paper money.If the government prints a bucket load of money we will get a sea shell crash event namely rampant inflation and we need barrow loads of money to buy a loaf of bread.The clear picture is now more confused with lots of high teck tricksters called investment mangers and economists whose real job is to make sea shell investing err paper money look like a good bet.

Frank Hall from the Frank Hall pictorial weekly with the help of minister for misery and Benji summed it best.An economist can tell you where you went wrong when its too late.Right now economist prediction abilities and credentials as a real science are in the gutter from total lack of ability to predict the recent tsunami events.You will probably have more prediction luck with your local witch doctors theme kill of all the banana trees to make bananas a valuable commodity

As long as we joe soaps believe in our heart and souls that the regime wont print bucket loads of money we can try to sleep at night and let our sea shells err paper money rest in the banks.

If however the the government dreams up a new way to circumvent the strict rules that limit the amount of paper money in the system we might lose confidence and rush in to get our money out before some perceived crash take place either to convert the money or or stash it under the bed depending the type of con trick we think the three card tricksters are pulling

Now in the world of economics and banks as long as you can wave a magic wand and convince the joe soaps that their sea shells err paper money is safe in the banks they wont all rush in to grab it all back.If they do get a whiff of something maybe true or not true and they all rush the banks the problem is banks have only got 10% of the deposits actually stored in the vaults .That is because they loan out 90% of the deposits .This means the other 90% of the depositors get pissed because they get locked out form getting their sea shells err paper money back.

A good link is wiki and Fiat money which explains why banks have only about 10% of the paper money in there

http://en.wikipedia.org/wiki/Fiat_currency


Now it all simple stuff really The government isn't going to tell you nice things like rush in and get your money out while you still can as they need you to continue to need the joe soaps to believe in this magic stuff call printed paper fiat money and that it represents your wealth.They got all sorts of ways to erode your wealth from extra taxxes to inflation with printing extra money and prefoer to do it slowly over time as your less likely to spot a small leak in the system than a dirty big in your face con job .Because the present regime is caught between a rock and a hard place the one they built and knew would one day happen they are limited in the ability to manoeuvre in with the Euro .So they cant just print more money like they could in the good old punt days. So taxxes and pay cuts is we are led to believe only the theme in town .This is because the Euro is perceived to be in good hands namely the German Bunders bank control via a EU monetary control.All is rosy in la la land.

If however as some figure the Euro itself might implode then the major plank that keeps the joe soaps all across Europe from rushing the banks is removed and the risk they might decide to withdraw all their hard earned saving is increased. A statement like the Government will guarantee say up to 1 million euros will keep most of them from doing that for some time maybe for decades.
That's why most banking systems have a government grantee of between 50,000 to say 1 million depending on the local needs. In reality if only one bank collapses lots of countries opt to go above the limits in effect often in the real world its unlimited in small cases so as to keep the confidence in the whole system of fiat paper money up.

Our ROI regime threw a wild arsed curved ball into the Euro system when they opted to guarantee all the deposits some €400billion

If we were in the Punt they might not be able to pull of that trick but because we like a small flea and the rest of the world would just laugh itself stupid at that stunt .However the flea is now riding the Euro horse the stunt got swallowed for a while.The fun stops if horse the euro ride is overloaded and trips or stumbles .Then its a problem is it fixxable or is it it gun to the head time . So if the Euro goes bad and the dollar is bad and the yen is bad and err all sea shells are a bad bet then what??

If ROI as 0.3% of the GNP of EU did collapse the combined force of the Euro could rescue ROI from that mess without a blip to the EU as we are just a small irritating flea who might have to eat humble pie for while after getting rescued

However if there are 7 regimes in 15 Euro members in the EU all over printing money exceeding limits and generally doing whats governments tend to do pushing the envelope it makes the Euro shaky .If there was several collapses at the same time the shaky tree risks to drop big fruit and the ability of the Euro and the EU to patch up the fissure line in confidence might not work. Then a battered euro might cause a rush to grab all lose money in the banks and a rush from investors to sell out of Euro if they twigged the Euro was dead meat

When cracks open up behind the scene fixxes are going on and trying to guess how big the cracks are is tricky.So nowadays a lot of economists are employed to watch the new cracks opening up and try to predict what solutions may exist.It a sort of solution to the sea shell problem you see the truck coming bearing something maybe sea shells so do you ditch your sea shells for something else or do you wait to mop up the fall out from the event or do you kill off banana trees and make bananas the new currency



By the time joe soaps rush the banks its often months after the government knew it was in the pipe line and they may have have decided to do something like make a new currency bananas to replace the sea shell economy that collapsed

Between crack watchers and sea shell counters they are now more adapt at ensuring the government and the super rich are long gone before the plebs get taken in the three card trick and we get left behind to slip on the empty banana skins


Or sometimes given time and serious cracks opening up the government might opt to introduce a similar but parallel currency to the internal one such as South Africa once did .There they had the Fin Rand (financial Rand )which was for outside investors worth the double than the local Rand inside Soth Africa .That way they can get speculators to buy their junky currency in the hope to make some sort of profit such as buying up south African goods at half price and selling them somewhere else for more real money.

So the ROI regime can introduce a Punt which is worth half the value of the Euro and make the Euro a sort of like Fin Punt .Then all us plebs will have our full wages in punts eg get a 50% pay cut .Then the regime could wing it way to EU gravy train on real EU money dressed in new skirt called Fin Punt (Euro).The ROI stays within Euro and joe saps get in ROI get funny money.The Euro is a bit tarnished but struggles on
There is a gazillion different ways to feck us joe soaps at the bottom up and the best magic trick tricksters work for the banks and the regime.

So you see you can stretch money ,you can inflate money, you can bomb money ,you can if your the regime sometimes reinvent the money eg change the punts to Euro and the bit they don't tell you if necessary maybe even change euro back to punts.Its called magic in the regimes inner circle but to us plebs its dressed up in nice touchy feely words like unlimited government guarantee and sure its the Euro safe as houses or in some circles funny money.


Now if your a mega investor with money in the bank say like €100,000,000 then the present situation is more like the Titanic event .The ships hit the iceberg and everything is rattled .The captain got the word the ship will sink and not enough life boats.He knows that the rich super class got included in the tickets a rock solid guarantee of a seat on the life boat and non of this women and children first crap.So he has got to keep the masses below decks happy with fairy stories as he off loads the big swingers as he expects the kick backs to go back to his family even if he doesn't survive the event .But unknown to the rest the captian has got a golden parachute which fly him off at the last moment so his risks are low.So he maddly employs fairy story tellers and magic trick artists namely junk bonds type investors and economists whoever to convince the steerage class that the water oround your ankles is the ships swimming pool sprang a leak and the mess will be mopped upsoooooon very soooooon

If however your are like the small guys and there is a few life boats left over when the big players were long gone then as the steerage class twig its only one place in the boat and 9 must remain behind its probable there will be a mad rush to get those seats.

That helps explains a bank rush


But that's a bit dramatic in these spoooky times so I think musical chairs sums up best the complex high fluting crap the economists spout so as to confuse us .Its also why econminists detest noise because it ruins the magic act of the tree card trick(What that you say musical chairs under water its a greatttt drinking party game ,get out of it )

So next time you think about it think of sea shells and musical chairs and those two pictures paint a thousand words and might save you from the three card tricksters and me having to do a big speeeel on the econonomy to keep wannabe economists feathers unruffled

Derry

Firstly, its nesf not nerf.

Secondly, ''well since there are nuclear weapons in the world, and there are bad people in the world. Well then its a only a hop skip and a jump to the world being destroyed by these weapons and people''. This is essentially what you are posting.

Also, I am very adept at the tree card trick. Its great fun at parties.

nesf

derry wrote: »

If you want to know about the subject Nerf spoke about that's more like what is currency exchange value a currency but not much about bank runs there??? that I could see

I didn't give any explanation for how a currency exchange values a currency, so really mate you've no idea of what you're talking about.

Time Magazine

The Economist wrote: »

I've been asked several times to improve the signal to noise ratio on this forum. You know where the Conspiracy Theories forum is. Last chance, derry.

Derry has just lost this game of musical chairs.

MyPeopleDrankTheSoup

derry wrote: »

confused
the original question is???
If you want to know about the subject Nerf spoke about that's more like what is currency exchange value a currency but not much about bank runs there??? that I could see

</snip>

I didn't ask about bank runs, I asked about currency runs. I didn't read the rest of the post, way too long and your command of English isn't the greatest.