How To Benefit From a Euro Collapse/Hyper Inflation?

Robdude

I keep hearing this is going to happen. Let's assume it is, for the sake of this discussion.

What can we do to make this work in our favour?

For example - if I were to buy a house right now and get a 400,000 euro mortgage - if the euro decreases so would my the value of my mortgage debt. That'd mean a cheap house for me.

Same with credit cards - let's say I max out 10k euro and buy goods I can sell in the future. If the euro collapses and is worthless, it would only take a few sales to repay the credit debt.

What about any savings we have in Euros. What currency should we move it to? USD?

Or is it a hopeless situation where you just can't win.

orourkeda

precious metals

orourkeda

Robdude wrote: »

I keep hearing this is going to happen. Let's assume it is, for the sake of this discussion.

What can we do to make this work in our favour?

For example - if I were to buy a house right now and get a 400,000 euro mortgage - if the euro decreases so would my the value of my mortgage debt. That'd mean a cheap house for me.

Same with credit cards - let's say I max out 10k euro and buy goods I can sell in the future. If the euro collapses and is worthless, it would only take a few sales to repay the credit debt.

What about any savings we have in Euros. What currency should we move it to? USD?

Or is it a hopeless situation where you just can't win.

Whatever gave you that idea

Dr.Silly

Sean Quinn, that you ?

Suryavarman

Buy gold, silver, platinum and mining stocks.

Nuttzz

Robdude wrote: »

For example - if I were to buy a house right now and get a 400,000 euro mortgage - if the euro decreases so would my the value of my mortgage debt. That'd mean a cheap house for me.

Lots of people in Iceland had their mortgages in Euro, when their economy collapsed their currency went through the floor so in effect their mortgages were nearly double

If you had a 400K euro mortgage and we end up with a Punt Nua, the punt nua will have a value relative to the euro, so it could be 2 punt nua = 1 euro so you'd end up with a 800k mortgage.

If the euro collapses you arent going to see your debts written off

Robdude

orourkeda wrote: »

Whatever gave you that idea

How do mortgages work in Ireland? I'll admit I don't honestly know.

But where I come from, you borrow a set amount and agree to repay it based on the agreed upon terms. IE - if you borrow 250k dollars you might have to pay 1050 dollars each month for 30 years.

With inflation, 1050 dollars is worth less than it used to be. The value of 1050 decreases. That makes it easier to pay off.

If mortgages are tied to an exchange rate or something here then I'm absolutely wrong - my apologies.

RichieC

Buy when there's blood running on the streets.....

Robdude

Nuttzz wrote: »

Lots of people in Iceland had their mortgages in Euro, when their economy collapsed their currency went through the floor so in effect their mortgages were nearly double

If you had a 400K euro mortgage and we end up with a Punt Nua, the punt nua will have a value relative to the euro, so it could be 2 punt nua = 1 euro so you'd end up with a 800k mortgage.

If the euro collapses you arent going to see your debts written off

Sorry - I was thinking more in the terms of lots of inflation; not replacing the euro completely. If the mortgage goes from euro to X and my salary is adjusted at the same rate; it sounds like it wouldn't make any difference to me?

knird evol

Nuttzz wrote: »

If the euro collapses you arent going to see your debts written off

There was no mention of any loans being written off.

He said that inflation reduces the real value of loan repayment. Figures like 400k are just numbers, their value is what they can buy. What is the average industrial wage, what is the cost of goods in a shop. If 400k is a days pay or the cost of a loaf of bread then it has little value.

BTW I'm making no predictions on future inflation levels or the future of the euro.

Robdude

RichieC wrote: »

Buy when there's blood running on the streets.....

Or - buy bandages and first-aid kits now and sell them later

Where does all this inflation come from?

John Doe1

We get use to stone tools again(:

Nuttzz

Robdude wrote: »

Sorry - I was thinking more in the terms of lots of inflation; not replacing the euro completely. If the mortgage goes from euro to X and my salary is adjusted at the same rate; it sounds like it wouldn't make any difference to me?

It wont on the day of conversion but once the central bank try to control inflation by sticking up interest rate you'll find your salary wont go up by the same levels, in december 1991 mortgage interest rates were 10.95%, what are they now?

Without the euro the punt nua will depreciate against major currencies, inflation (for example oil priced in dollars) will increase and bank interest rates will follow.

Inflation from a euro withdrawal/collapse will have the opposite effect of what the OP thinks

Killer Pigeon

Buy Gold or other precious metals NOW, this will keep what you've earned at relatively the same price as it is now. Then when the IR£ comes back in and hyperinflation issues (which could lead to the devaluation of certain commodities), wait a little while until everthing hit rock bottom and then start buying up everything left, right and centre. Then wait until markets begin to rise again. When the market gather momentum and things start to reach a relative peak start selling off everything again. It all depends on the severity of the inflation and your timing.

latenia

I read recently that analysts believe a "Punt Nua" will actually appreciate vs a new curency...

Robdude

Deleted User wrote: »

Where does all this inflation come from?

I honestly have no idea - it's just what I've heard is most likely to happen. I do know the Euro has been losing value relative to other currencies and I'm told it's because of the growing financial concerns with the debt/euro crisis/etc...

Chuck Stone

All this talk of hyperinflation
Is getting me down, my love
And the economists, don't work
They just make things worse
But I know they'll get it wrong again.

red menace

Read this OP

http://www.amazon.com/When-money-dies-nightmare-collapse/dp/0718302141

Benny_Cake

Ah, we'll be grand, happy Christmas everyone.

Robdude

red menace wrote: »

Read this OP

http://www.amazon.com/When-money-dies-nightmare-collapse/dp/0718302141

That actually sounds really interesting. Thank you! I think I might do that.

orourkeda

orourkeda wrote: »

precious metals

Hard to trade, shotgun cartridges & beans will trade OK so will good whiskey.

It won't be anything like that of course, more like a repeat of the 1970's with rapid price rises followed by strikes for higher pay.

Initially it will just be a case of replacing the € symbol with a £ (on some of the older stuff, removing the € sticker), then if the Punt devalues relative to the US Dollar the first thing to jump in price will be petrol & diesel, followed by everything else.

hmmm

Buy gold about 6 months ago, then keep telling gullible fools on the Internet that "everything" is about to "collapse" and they need to buy your gold at twice the price you paid for it.

Make sure to keep posting over and over again on Internet forums to generate the fear and panic.

Amirani

If you get have a mortgage in Euro and get paid/save in a relatively strong currency other than Euro (e.g. UK Pound) then large devaluations in the value of the Euro will cause a reduction in the true value of your debt. A full on collapse of the Euro currency will probably create lots of problems for the Pound also though.

Liam Byrne

latenia wrote: »

I read recently that analysts believe a "Punt Nua" will actually appreciate vs a new curency...

Huh? Punt Nua would be the new currency - how could it appreciate vs itself ?

amacca

hmmm wrote: »

Buy gold about 6 months ago, then keep telling gullible fools on the Internet that "everything" is about to "collapse" and they need to buy your gold at twice the price you paid for it.

Make sure to keep posting over and over again on Internet forums to generate the fear and panic.

shush.....my plan, you are ruining it.

it only works because the fear filled don't suspect and are not capable of rational thought during this my window of opportunity...but you have to insist on blabbing don't you?

ilovesleep

Nuttzz wrote: »

Lots of people in Iceland had their mortgages in Euro, when their economy collapsed their currency went through the floor so in effect their mortgages were nearly double

If you had a 400K euro mortgage and we end up with a Punt Nua, the punt nua will have a value relative to the euro, so it could be 2 punt nua = 1 euro so you'd end up with a 800k mortgage.

If the euro collapses you arent going to see your debts written off

But would the same not happen in your wages.
So say you took home 400 euro a week. The euro collapses and 1 euro = 2 punt nua. So you you'd be taking home 800 punt nua.

amacca

ilovesleep wrote: »

But would the same not happen in your wages.
So say you took home 400 euro a week. The euro collapses and 1 euro = 2 punt nua. So you you'd be taking home 800 punt nua.

possibly not



but even if it did the real kicker would be you would have less punt nua available to service debt as the cost of essentials in terms of punt nua would appreciate at a fast clip....you would have to spend more...even acounting for exchange rate due to inflation

+ once the punt nua floats it could devalue (drop like a stone)

ilovesleep

ilovesleep wrote: »

But would the same not happen in your wages.
So say you took home 400 euro a week. The euro collapses and 1 euro = 2 punt nua. So you you'd be taking home 800 punt nua.

In your example the Euro has doubled in value relative to the An Punt Nua, so the effects will only be immediately noticed by those who have retained (unstamped) Euros as their money will go twice as far.

All the cash machines will only be issuing notes with an "An Punt Nua" stamp or freshly printed notes. Short term plan may be to stock up on cash and exchange it later at the new rates.

Celly Smunt

won't happen.

Celly Smunt

also buy lots of chocolate,it appreciates hugely during depressions. (i.e Germany)

pmcmahon

pmcmahon wrote: »

won't happen.

Might happen, nothing is certain.

My guess is there is a 20% chance of at least one country dropping or being thrown out over the Xmas/new year period.

pmcmahon

pmcmahon wrote: »

also buy lots of chocolate,it appreciates hugely during depressions. (i.e Germany)

If the women are stuffing themselves with chocolate, then they'll be less inclined to want sex.

So the depression will be more on the men!

artanevilla

Invest all your money in inflatable hammers with Euro 2012 coming up.

ilovesleep

The Euro won't fail. Germany experienced a lot of this after WW2. They'll do every thing in their power not to let the Euro fail. They are just mickying around to instill some fear in people and nations to push some agendas.

Micky Dolenz

Buy gold, sell gold at "cash for gold", buy more gold, sell gold at "cash for gold", repeat till bored.

Celly Smunt

Deleted User wrote: »

Might happen, nothing is certain.

My guess is there is a 20% chance of at least one country dropping or being thrown out over the Xmas/new year period.

It again comes down to Greece,If there's a Country to get thrown out it'll be the greeks.

tricky D

Robdude wrote: »

How To Benefit From a Euro Collapse/Hyper Inflation?

I'm investing in wheelbarrows for carrying the paper money.

http://education.wallstreetsurvivor.com/images_articles/wheelbarrow_cash_weimar_germany.gif

Nuttzz

ilovesleep wrote: »

But would the same not happen in your wages.
So say you took home 400 euro a week. The euro collapses and 1 euro = 2 punt nua. So you you'd be taking home 800 punt nua.

yep, but everything else would go up, for example in 1993 when Ireland had to devalue its currency in the ERM mortgage interest rates went from 10.95 to 13.95% in the space of a month, considering a .25% increase in rates causes an average of €12 a month increase in mortgage payments an increase like this would be €144 a month (or 288 in punt nua assuming it was 2 for 1). with the hue and cry about knocking €10 a month from kiddie allowance can you imagine what this would cause?