German Bank Deposits & Euro Breakup

arbitrage

I have heard speculation that in the event of a euro breakup or an Irish exit that it is not guaranteed that Irish resident deposits in German banks will stay in Euro or revert to the DM and may actually be converted to the Punt Nua.

Is there any clear official guidelines on what happens in the case we revert to the Punt Nua?

Who makes the final decision?

christeb

I haven't heard anything like that but what you're saying doens't sound legal. Surely we have rights to have savings abroad, untouched by anything that happens in this country?

Personally I've got a good chunk of my savings in DKK, so I hope you're wrong.

arbitrage

I have assumed to this point that the savings would stay in German currency in the event of a breakup. I will contact the CB, ECB and a couple of German banks to make sure otherwise I will have to adjust my savings strategy, possibly buy bunds or look outside the eurozone. I will post the answers I get back.

hmmm

There's no law in place anywhere that details exactly what will happen in a breakup. So any answers you get is all speculation.

arbitrage

Thats not at all reassuring. The majority of individuals who have gone to the trouble of opening foreign eurozone accounts, some having travelled to the respective countries, are under the impression that its a certainty those funds won't be converted to the Punt Nua.

hmmm

arbitrage wrote: »

are under the impression that its a certainty those funds won't be converted to the Punt Nua.

That's what happens when someone gets all their financial advice from Liveline.

justforgroups

hmmm wrote: »

That's what happens when someone gets all their financial advice from Liveline.

100% agree. People who have gone through the cost and hassle of going abroad opening accounts and such need their head examined!
Personally, I've made thousands on interest from Irish and Ireland-based banks (EBS, PTSB, UB, KBC, and NI) over the past 3 or so years - a huge opportunity cost on those who have moved money overseas earning pennies in interest.

And for what? You are not even sure your money is any safer overseas then in Ireland! :P methinks someone should not have been following the herd and instead, like me, done their own research! ;-)

arbitrage

justforgroups wrote: »

100% agree. People who have gone through the cost and hassle of going abroad opening accounts and such need their head examined!
Personally, I've made thousands on interest from Irish and Ireland-based banks (EBS, PTSB, UB, KBC, and NI) over the past 3 or so years - a huge opportunity cost on those who have moved money overseas earning pennies in interest.

And for what? You are not even sure your money is any safer overseas then in Ireland! :P methinks someone should not have been following the herd and instead, like me, done their own research! ;-)

what research did you do?

arbitrage

I have been trying to find an answer to the question how to maintain wealth in the event of a euro break up and there seems to be no consensus at all.

There are 4 main areas that people seem to be attracted to:

1. Gold
At present gold is trading at equal in real terms to its historically high levels in the 1980s and I believe buying gold is now more of a gamble than an investment.

2. German deposits
There is no guarantee our deposits won't be converted to the Punt Nua.

3. Swiss Franc
The Swiss CB has said it will take measures to curb what it views as a massively overvalued franc.

4. German government bonds
This is not a bad safety bet. Opportunity cost is you make about 3% less than having money on deposit in Ireland. In November only 2/3 of a German bond issue was purchased. Why?


If the Euro breaks up what 3 places would you want to have your money in?

SyntonFenix

arbitrage wrote: »

1. Gold
At present gold is trading at equal in real terms to its historically high levels in the 1980s and I believe buying gold is now more of a gamble than an investment.

If the Euro breaks up what 3 places would you want to have your money in?

Gold is about $500 off it's 1980 high in todays money. So it should be around $2300.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a3w9OGzFRe3Y

Cavehill Red

arbitrage wrote: »

If the Euro breaks up what 3 places would you want to have your money in?

Depends how crazy it gets.
Option 1 (ie civilisation continues): Silver, basket of currencies (mostly sterling - I have a good feeling about sterling), and property (not in Ireland; location, location, location!)
Option 2 (looks like Europe is going completely tits up): Gold, silver, high-value portable collectibles.

bopbuddy

OK
I have a feeling and have had one for some time that Greece is gone.
Then I'm not sure, i think we may go to the punta nua and i really don't think that any euro foreign deposits will be guaranteed.
I have gold and silver investments i have some shares through work (American) in the pipeline but know think that some non European currency would go well. I have identified the Brazilian real as the one to go for but here is where I am falling short.
How would i get some, i have to say i wouldn't trust an on-line currency trader if the Greece goes bang and would like to get hard currency?
Any any thoughts?
Pessimistic

books4sale

arbitrage wrote: »

Is there any clear official guidelines on what happens in the case we revert to the Punt Nua?

Who makes the final decision?

No, there isn't.

Certain posters have been spouting on here about the break up for the past 4 years often at times calling it as only a matter of weeks. I saw one thread last year claiming it was going to be at the end of that particular week.

All lies, propaganda and scaremongering, the Euro is still with us and will be for a long time.

Its your money and your call.