Mad question

6541

Hi folks I would like to get a few opinions here on strategy. Now what I believe loads of you will probably disagree with it, however I believe it.

I believe another Euro crisis will break out in 2015.
I believe that the UK will leave the EU very soon, with massive consequences.
I believe that house bubble and growth rate of Ireland will crash next year.

So from my premise I need to get my cash out of Euro and to a stable currency, two questions 1) What currency (US) ? 2) How do I go about it ?

Maybe I am completely mental.

ABC101

You require to open a currency account with your bank, to be nominated in a foreign currency.

There are charges for this service...and the offer rates can be rather unfavourable, but if you are talking about large amounts of money i.e. 10K or more... then it could be worth the hassle.

The euro is expected to depreciate against other major currencies such as USD... but that is by no means certain.

euroboom13

6541 wrote: »

Hi folks I would like to get a few opinions here on strategy. Now what I believe loads of you will probably disagree with it, however I believe it.

I believe another Euro crisis will break out in 2015.
I believe that the UK will leave the EU very soon, with massive consequences.
I believe that house bubble and growth rate of Ireland will crash next year.

So from my premise I need to get my cash out of Euro and to a stable currency, two questions 1) What currency (US) ? 2) How do I go about it ?

Maybe I am completely mental.

I agree property will take knock over the next few years.
I believe $$ is the currency to avoid.
Europe is in a stronger position than Asia and dollar.
European Debt is selling very well at near zero return, which would not happen if there was not a collapse risk else where.
I expect EU to have a good year if oil prices stay low, unlike US/mid east.

Good luck

Nino Brown

6541 wrote: »

So from my premise I need to get my cash out of Euro and to a stable currency, two questions 1) What currency (US) ? 2) How do I go about it ?

Maybe I am completely mental.

You're definitely not mental. Opening an account in another currency isn't easy, Have you considered assets priced in another currency ie. Gold/Silver. No currency is really safe in my opinion, and hard assets protect you against all of them.

CashMoney

Nino Brown wrote: »

Opening an account in another currency isn't easy.

You can walk into PTSB on Monday morning with a passport and a utility bill and have it opened in about 15 minutes. Probably less if there's no queue.

jon1981

The Danish or Norwegian kroner could be another option?

Nino Brown

CashMoney wrote: »

You can walk into PTSB on Monday morning with a passport and a utility bill and have it opened in about 15 minutes. Probably less if there's no queue.

I meant in an foreign bank. I guess it depends on just how much faith you have in the eurozone banking sector. I would be thinking more along the lines of having the money out of the eurozone completely. I'm not sure of the mechanics of a foreign currency account, but in case of a eurozone bank crisis would foreign currency deposits be immune from bail-ins, or bank runs etc?

ABC101

Yes... I think foreign bank accounts i.e.. non resident accounts can be expensive.... i.e.. high annual costs and costs for transactions etc. But then again .... what is expensive.... paying 120 quid / year for a foreign Non Resident account may be expensive or cheap to others etc etc.

In addition if you do open a Foreign non resident account i.e.. HSBC etc ... you will be required to inform the Irish Revenue Commissioners..... especially if you earn interest on the deposit.

I am open to correction... but you may be obliged to tell them anyway even if you do not earn any interest.

IMO.... I think opening a Irish based currency account with AIB or BOI would be safe enough..... at least until the General Election in 2016.... after this event.... I'm not sure what will happen to investment / capital in Ireland... there could be a run for the door.

6541

Thanks for all the replies, so I am really interested in your opinions, am I mental? do you think the Euro will crash ? Do you think the UK will leave the Euro zone?

Nino Brown

6541 wrote: »

Thanks for all the replies, so I am really interested in your opinions, am I mental? do you think the Euro will crash ? Do you think the UK will leave the Euro zone?

Well the way I see it,

1. The euro is inherently unstable due to the imbalance of it's economies
2. Money printing on this scale has always ended badly going right back to Roman times. I think monetary policy is suicidal, at best it's experimental, we are in uncharted territory here.
3. Roughly every 40 years, the world gets a new currency system. Nixon basically ended Bretton Woods in 1971, so we're overdue.

None of this means anything is definite, but IMHO, you would be a fool not to at least partially hedge against a currency crisis. No need to go nuts either though (Doomsday bunkers and bug out plans are OTT), the worst case scenario rarely ever happens.

My plan is this, have a bit of cash (some euros/some other currency) under the mattress (Not literally). Buy some gold, think of it as an insurance policy, not an investment, don't worry about price fluctuations. Have enough food in the house for a couple of weeks (2-3). Keep a drum of deisel/petrol in the shed and rotate it regularly.
Basically have what you need to get by for a couple of weeks should your money become worthless, currencies/economies collapse all the time, the world doesn't end, society doesn't break down. The first few weeks are the worst, so having a plan for them will make your families life that bit more comfortable.

tralalala

The Euro has no reason to crash that much. It has big economies with important companies. There can be a euro crisis but it should do fine more or less. It represents a market of 300 M people. Other currencies have problems as well, Yuan, Pound, Rouble, Yen, even Dollar they all have their own issues so it would be difficult to find a safe heaven. Norwegian or Swiss currencies are good but the fluctuation with the Euro can be crazy and you could loose or win a lot.
If the UK leaves the EU it should have no consequences on the Euro.
If you want to avoid being in Euros just get into shares. Companies will still make money whether the currency is Euros or Seashells. but in case of crisis they will drop too. Or do nothing and buy shares if the Euro crashes.

ixus

You're not mental OP. They all have reasonable probability. One option is to set up a bank account with say HSBC in the Isle of Man in USD or the Pound. This is perfectly legal as long as you inform Revenue so it doesn't look like tax evasion. The thing is, you're talking of a 20/25k minimum for such an account.

No harm in doing your research on this.

soirish

6541 wrote: »

So from my premise I need to get my cash out of Euro and to a stable currency, two questions 1) What currency (US) ? 2) How do I go about it ?

By definition paper currency that's not backed by commodity can't be stable. It's actually ironic that you mention $.
If you are bearish which you seem to be go for precious metals, collectable items, hedge funds and cash which gives you flexibility to act fast.

no_coverage

The Euro will weaken v the dollar in the next year no matter what happens

If the eurozone remains near recession or if the ecb decides to engage in QE

euroboom13

no_coverage wrote: »

The Euro will weaken v the dollar in the next year no matter what happens

If the eurozone remains near recession or if the ecb decides to engage in QE

In your opinion.

Wouldn`t like to see anyone put the house on that!(so important not to make your statement sound like a predetermined fact)

In my opinion the euro is going to strengthen / dollar decline.

no_coverage

euroboom13 wrote: »

In your opinion.

Wouldn`t like to see anyone put the house on that!(so important not to make your statement sound like a predetermined fact)

In my opinion the euro is going to strengthen / dollar decline.

Disagree strongly

euroboom13

no_coverage wrote: »

Disagree strongly

Good ,its nice to see strength of conviction ,even if I strongly disagree.

Why is European bond market having such a good time of it?

If the euro was in danger of collapse there would be no market for it, but what we have now in Europe is unreal, we could sell any debt to foreign currency investors. why ???(They expect European growth above all else,even above the value of there own currency).

Good luck!

ABC101

euroboom13 wrote: »

In my opinion the euro is going to strengthen / dollar decline.

What would be thinking for this? I mean .... all the data coming out of the US is positive... and has been positive for most of 2014.

In addition the Fed has stopped QE....whilst Europe is on the verge of implementing some restricted form of QE etc.

Europe has numerous problems... particularly France and Italian economies ( or lack of economies).

Europe has another issue... the rise of political parties which are different to the incumbent center right, center left ones. WRT Ireland, there have been a increasing number of articles in mainstream media that after GE 2016.. Ireland may be ungovernable due to the rise of flaky Socialist parties.

This issue is also present in various European countries, however extreme right issues seem to be more of an issue i.e. Syriza in Greece.

Add into the mix the 'aggro' which is going on in Ukraine. Some weeks ago there was great jubilation that the EU had helped broker an agreement between Ukraine and Russia over gas prices and payments. Now there is talk of 'Total War'.

All this adds to uncertainty... which investors don't like.

Back in June... the Euro was worth 1.34 USD.. now it is down to 1.24 USD approx.

I'm not saying the euro will go to parity with the USD... but for the medium term I would be personally surprised that the euro would strengthen.

But then again... there are so many strange things happening on the stock markets... where effectively anything might happen.

Bateman

Once the square mile harnesses its vast lobbying budget, does anyone honestly believe that the Brits are going to leave the EU?

euroboom13

ABC101 wrote: »

What would be thinking for this? I mean .... all the data coming out of the US is positive... and has been positive for most of 2014.

In addition the Fed has stopped QE....whilst Europe is on the verge of implementing some restricted form of QE etc.

Europe has numerous problems... particularly France and Italian economies ( or lack of economies).

Europe has another issue... the rise of political parties which are different to the incumbent center right, center left ones. WRT Ireland, there have been a increasing number of articles in mainstream media that after GE 2016.. Ireland may be ungovernable due to the rise of flaky Socialist parties.

This issue is also present in various European countries, however extreme right issues seem to be more of an issue i.e. Syriza in Greece.

Add into the mix the 'aggro' which is going on in Ukraine. Some weeks ago there was great jubilation that the EU had helped broker an agreement between Ukraine and Russia over gas prices and payments. Now there is talk of 'Total War'.

All this adds to uncertainty... which investors don't like.

Back in June... the Euro was worth 1.34 USD.. now it is down to 1.24 USD approx.

I'm not saying the euro will go to parity with the USD... but for the medium term I would be personally surprised that the euro would strengthen.

But then again... there are so many strange things happening on the stock markets... where effectively anything might happen.

I agree, if I was listen to the news like you are, I couldn`t fathom a strong euro either.

But if you make your own mind up on these things, it is obvious that the dollar is the one, that needs to weaken, and will.

Don`t mean to be a broken record here, but oil has and will have, a big impact here.

ABC101

Hmmm.... I just don't know... there are a lot of strange things going on in the markets at the moment. Hard to make sense of it at all at times, sometimes it seems like there is manipulation going on. I just don't know.

If Europe is so dysfunctional, uncertain, feeble, etc... why as you say are the bond yields so low? Some months ago... I was listening to a chap talking about the European bond markets ...... he was flabbergasted at what was happening... in his twenty or 30 years he never saw anything like it...... basically saying it was 'Herd mentality' where the market was investing in euro bonds regardless of fundamentals, just get into Europe regardless.

Market fundamentals don't seem to count anymore....

I think the price of oil will remain low for the next few months... perhaps around the 80 USD mark... but this will force the Frackers to suspend operations, which will then cause a slight shortage of gas... which will then drive up the price of oil.. perhaps by spring 2015.

But then again... I just don't know... Europe might be at war with Russia by Christmas!!!!

Nothing seems to make sense anymore... seems to be more psychology rather than fundamentals.

euroboom13

ABC101 wrote: »

Hmmm.... I just don't know... there are a lot of strange things going on in the markets at the moment. Hard to make sense of it at all at times, sometimes it seems like there is manipulation going on. I just don't know.

If Europe is so dysfunctional, uncertain, feeble, etc... why as you say are the bond yields so low? Some months ago... I was listening to a chap talking about the European bond markets ...... he was flabbergasted at what was happening... in his twenty or 30 years he never saw anything like it...... basically saying it was 'Herd mentality' where the market was investing in euro bonds regardless of fundamentals, just get into Europe regardless.

Market fundamentals don't seem to count anymore....

I think the price of oil will remain low for the next few months... perhaps around the 80 USD mark... but this will force the Frackers to suspend operations, which will then cause a slight shortage of gas... which will then drive up the price of oil.. perhaps by spring 2015.

But then again... I just don't know... Europe might be at war with Russia by Christmas!!!!

Nothing seems to make sense anymore... seems to be more psychology rather than fundamentals.

Strange times indeed, but bond market is what has convinced me, also Ireland would have had inflation last month only for a 40% increase in oil imports,.

An education for those watching closely

Nino Brown

There has never been a time in history when money printing on this scale was happening all over the world. So attempting to predict or model what is going to happen is just guessing as far as I'm concerned. Nothing makes sense anymore. Take Japan, the government are trying their best to increase inflation to 2% at all costs, the 10yr bond yield is 0.5%ish. It makes no sense for anybody to buy those bonds, but they do because there is so much printed floating around,.
Japan is in recession, so will probably print even more. Draghi is talking about buying bonds, ie money printing. And the fed have stopped direct QE for now, but I wouldn't be surprised to see QE4 early next year.
I don't think the US is any better off than Europe, they're economy is seeing a slight benefit benefit from the fed's $4 trillion balance sheet, but it hasn't worked, unemployment is basically the same as in Europe, and they have several bankrupt states with a lot of municipal bonds on the brink of default.

alb

As a hedge against currencies dependent on governments and central banks, gold is the traditional choice for decentralised fixed supply currency, but Bitcoin now provides an emerging alternative also. Gold has history on its side, but Bitcoin provides many advantages over it (and different risks). The Cyprus bank bail-ins were said to largely have influenced the run up Bitcoin had in spring 2013. If QE or other factors lead to hyper inflation in major currencies, it's likely Bitcoin will act as at least a partial safe haven.

soirish

Years ago, an elderly, frail Japanese martial arts master - Kiai Master Ryukerin once boasted a 200-0 record against his opponents.

He claimed to have a unique power that allowed him to inflict serious injury on people without actually laying a finger on them.

Was it Chi? Magic? None of the above. It was a total scam. But that didn’t matter.

You see, the legend of the master’s powers turned out to be far more powerful than reality.

His core following of students believed in the master so much that they would fling themselves across the dojo whenever he raised his pinky finger.

And anyone who saw the display would become transfixed by the perception of the mater’s extraordinary abilities. It was an incredible case of mass delusion.

Everyone believed it, including the master himself. He was so confident in his skills that he put up a $5,000 challenge that he could beat any fighter in the world.

A mixed martial arts champion accepted the wager, and the result wasn’t pretty. http://youtu.be/gEDaCIDvj6I.

stevedublin

soirish wrote: »

Years ago, an elderly, frail Japanese martial arts master - . http://youtu.be/gEDaCIDvj6I.

okay, but what has that got to do with investing?

soirish

stevedublin wrote: »

okay, but what has that got to do with investing?

This has everything to do with investing.

jungle_hostage

euroboom13 wrote: »

Good ,its nice to see strength of conviction ,even if I strongly disagree.

Why is European bond market having such a good time of it?

If the euro was in danger of collapse there would be no market for it, but what we have now in Europe is unreal, we could sell any debt to foreign currency investors. why ???(They expect European growth above all else,even above the value of there own currency).

Good luck!

just because the soverign debt market in several eurozone nations is insanely overvalued , doesnt mean things are hunky dory , japan is in recession yet their bonds are also insanely expensive

a strong euro doesnt suit anyone right now and no one is working towards it

its a contrarian bet to bet on a strengthening euro

jungle_hostage

stevedublin wrote: »

okay, but what has that got to do with investing?

a case of someone trying to appear like they have it all figured out when their simply floating gobledegook

euroboom13

jungle_hostage wrote: »

just because the soverign debt market in several eurozone nations is insanely overvalued , doesnt mean things are hunky dory , japan is in recession yet their bonds are also insanely expensive

a strong euro doesnt suit anyone right now and no one is working towards it

its a contrarian bet to bet on a strengthening euro

I know, I am a contrarians investor.

Japan has growth issues over the past 20yrs