If you had only one option?

howwedoin

With the prospect of the euro failing, if ou had only one place you could move your savings (if any exist), where would it be?

Move it to a foreign bank?
Invest in gold/ silver etc?
Or would you just leave it here and take your chances?

maddragon

I'm leaving my savings where they are. The prospect of the euro failing is too horrible to contemplate. Moving to another currency is only going to guarantee a 10-30% loss. If the euro fails the big worry will be how to feed my family, not where should I have put my savings.

nesf

Gold is horribly inflated at the moment. It was a good choice a few years back but right now it's arguably a bubble market and not something I'd like to buy into. Some of the goldbugs on here may disagree with this though.

Foreign banks are an option but the currency hit is nasty and unpredictable. You get caught going both directions remember and you need to bring the money back at some point.

Leaving it here, well that's what I'm doing. I considered tying up some of the money in a (capital guaranteed) bond scheme but didn't go for it in the end. The thing about the Euro failing is that it would hurt so badly every State in the Eurozone that it's really hard to see Germany etc allowing it to happen.

howwedoin

It's all up in the air really, I would love to know what all the high flyers with the huge bank accounts in France, Germany etc. are doing or planning to do if such a disaster becomes imminent...

daithimacgroin

dollars?
Renminbi?

Nody

I'd move it to a German bank as what ever currency comes after Germany's one is likely to be as strong/stronger.

Icepick

What about shares?

cson

nesf wrote: »

Leaving it here, well that's what I'm doing. I considered tying up some of the money in a (capital guaranteed) bond scheme but didn't go for it in the end. The thing about the Euro failing is that it would hurt so badly every State in the Eurozone that it's really hard to see Germany etc allowing it to happen.

Being the second biggest reserve currency in the world; the ripple effect would go much wider than just the Eurozone. I'd imagine you'd struggle to find a currency which wasn't impacted by the failure of the euro.

beeftotheheels

Just put mine in a house - closed today. It is cheap and I need to live somewhere. Not calling the bottom of the property market or anything, but my house is imminently affordable for me at the moment, no asset is a particularly safe investment in this market, at least this one I can live in.

Cavehill Red

All tangible assets are a good option. The problem is storage.

Among others (despite those claiming a top for precious metals, I don't think we've seen anything near it yet), I'd recommend gold and silver, but also items that can be sold/bartered in the event of a currency meltdown (will take a few weeks to get a new system up and running.)
Such items might include tobacco, alcohol, jewellery, diamonds, gold and silver coinage, collectibles in general.
Another option, as seized by a poster above, is to plough savings into a large tangible asset such as property. Though I too wouldn't be calling a bottom in Irish property.

Godge

The question to ask is, if the euro disappears as a reserve currency, what replaces it? German euros look good and are the safe bet but probably not the best bet. The problem for the Germans is that their economy is tied in to the fortunes of the rest of the EU which will nosedive so the new D-mark will keep value relative to the new punt but it won't relative to the other major currencies. Also if you are not in German euros before the break-up, don't buy them afterwards, it will be a repeat of the Swiss France debacle. I would guess that the day after the break-up a German euro will be worth 2 Irish punts but six months later a German euro will only be worth 1.5 Irish punts.

Dollar I would think, but the US economy isn't great but probably better option than the German euro. Haven't been watching the yen, but that is a possibility.

The other thing to remember is that there will also be interest rate differentials as well as currency differentials.

Say the Irish punt devalues by 20% vis-a-vis the German euro but the German euro saving account only offers 1% interest while the Irish punt saving account offers 10%. After two years there will be little or no difference between where you put your money, in fact if the Irish punt makes back some of the difference you will have been better off keeping your money here.

luckily I don't have that worry, I have little or no savings but I do have a tracker mortgage and I am worried about whether it will be linked to a German ECB or an Irish Central Bank. If the latter, I will see a sharp rise in payments.

Actually, the best thing in uncertain times, is that if you have savings, use them to pay off any debts you might have.

Cavehill Red

The OP was asking about placing savings, but as you say, if you have debts, the obvious thing to do is to pay them down first, as it would be unclear whether they would be much greater (a la Hungarian or Icelandic personal debts) afterwards or if indeed they might be largely expunged by a devaluation of the currency.

hmmm

If you're worried, the classic way to spread risk is to diversify. Don't put it all in one asset class or currency.

Maintain a small cash reserve in case bank accounts are temporarily frozen.

In saying all that, i think the risk is overblown and people are being unnecessarily frightened. The big bazooka of the ECB is lying in wait for use if needed.

hmmm

Godge wrote: »

Actually, the best thing in uncertain times, is that if you have savings, use them to pay off any debts you might have.

I'm not sure about the wisdom of this. Money in the bank gives you options. Some people who have large cash balances may wish to pay off debt which is reasonable, but for those with small savings I would probably stay in cash.

Keyzer

Cavehill Red wrote: »

All tangible assets are a good option. The problem is storage.

Among others (despite those claiming a top for precious metals, I don't think we've seen anything near it yet), I'd recommend gold and silver, but also items that can be sold/bartered in the event of a currency meltdown (will take a few weeks to get a new system up and running.)
Such items might include tobacco, alcohol, jewellery, diamonds, gold and silver coinage, collectibles in general.
Another option, as seized by a poster above, is to plough savings into a large tangible asset such as property. Though I too wouldn't be calling a bottom in Irish property.

A tad over the top imo - sounds like your planning for a nuclear or zombie apocalypse...

The EURO is too big for other central banks and reserves to allow collapse.

alphanine

I would buy US dollars. It is still the reserve currency of the world and has a much more advanced economy than people give them credit for. Their gigantic military spend, in a roundabout way, reinforces the dollar's value.

Cavehill Red

Keyzer wrote: »

A tad over the top imo - sounds like your planning for a nuclear or zombie apocalypse...

The EURO is too big for other central banks and reserves to allow collapse.

Almost all fiat currencies in human history have ended in a short and painful collapse. About the sole exception is the pound sterling, which instead has suffered from a long devaluation throughout its three centuries of existence (a pound of sterling silver is worth somewhat more than £1 today.)
Whatever various institutions may wish to 'allow', the euro in its current form is unsustainable. Either complete fiscal union (involving some or all of the current countries) takes place, or it will collapse, sooner rather than later.

daithimacgroin

i guess the safest thing to put your money into would be government bonds!!!

number10a

Godge wrote: »

The question to ask is, if the euro disappears as a reserve currency, what replaces it? German euros look good and are the safe bet but probably not the best bet. The problem for the Germans is that their economy is tied in to the fortunes of the rest of the EU which will nosedive so the new D-mark will keep value relative to the new punt but it won't relative to the other major currencies. Also if you are not in German euros before the break-up, don't buy them afterwards, it will be a repeat of the Swiss France debacle. I would guess that the day after the break-up a German euro will be worth 2 Irish punts but six months later a German euro will only be worth 1.5 Irish punts.

Dollar I would think, but the US economy isn't great but probably better option than the German euro. Haven't been watching the yen, but that is a possibility.

The other thing to remember is that there will also be interest rate differentials as well as currency differentials.

Say the Irish punt devalues by 20% vis-a-vis the German euro but the German euro saving account only offers 1% interest while the Irish punt saving account offers 10%. After two years there will be little or no difference between where you put your money, in fact if the Irish punt makes back some of the difference you will have been better off keeping your money here.

luckily I don't have that worry, I have little or no savings but I do have a tracker mortgage and I am worried about whether it will be linked to a German ECB or an Irish Central Bank. If the latter, I will see a sharp rise in payments.

Actually, the best thing in uncertain times, is that if you have savings, use them to pay off any debts you might have.

What the hell is the German euro? Is it a snide childish remark about the currency of 17 nations that our oh-so-evil overlords are supposedly imposing on us? Or do you mean specific euro notes with an X on the back and coins with an eagle on the back??