In the event of ... Irish pound

Trompette

Hi there,

Could someone explain with arguments what could be the value of a new Irish pound currency in the event of the € collapse ?
Short question, but I'd guess hard to answer.
Thanks for your answers

Edit: Please move this thread if not in the good topic

dxhound2005

Whatever people are prepared to pay, when exchanging it with other currencies. Which, if it behaves like other currencies, will vary. From memory our Punt exchanged in a band of about 75 pence to £1.05 with Sterling, during it's approx 20 year existence.

Since the Euro came in it has been exchanged at as low as 90 US cents and and high as $1.47. The exchange rate with Sterling has been anywhere from about 60 to 90 pence.

dubrov

It can be initially set to whatever the central bank want it to be.

Trompette

Thank you for these info.

Roughly:
Today € is 20% above US$
Sterling pound is 30% to 40% bellow US$ and Irish pound could be 25% bellow Sterling.
=> Irish fall could be 55% bellow US$.
If I compare to now with €, Irish pound could fall maximum 75% bellow current €.
In the mean time, French Franc will fall 15-20% to 1FF=1US$
I am right?
As you certainly guessed, I am French living in Ireland.
Can I say?; If I buy an house today in Ireland and the event happen, I could loose 55-60% compare to if I buy in France.

I am not very skilled in the matter.

Geuze

It is extremely unlikely that Ireland would leave EMU.

phantom_lord

Geuze wrote: »

It is extremely unlikely that Ireland would leave EMU.

Ever?

Trompette

Geuze wrote: »

It is extremely unlikely that Ireland would leave EMU.

I agree entirely with you and I never wrote Irish country will leave.
I just mean € will collapse and disappear and EU will follow.
The question is "when?" and it could be closer than a lot of people think.
I'd guess you know why.

Thargor

Trompette wrote: »

I'd guess you know why.

You guess wrong then, why?

Geuze

Trompette wrote: »

I agree entirely with you and I never wrote Irish country will leave.
I just mean € will collapse and disappear and EU will follow.
The question is "when?" and it could be closer than a lot of people think.
I'd guess you know why.

By collapse, do you mean the euro to depreciate against GBP, USD, etc.?

Or do you mean EMU to collapse, and each member to return to individual currencies?

Trompette

I mean, € will disappear and counties will return to there own currencies.
Moreover in this case, EU will break up and countries will rediscover there own democracy.

Why:
If you switch off you TV and read good Internet web sites (I don't know in English), you will find out all the signs of the above.
First find info about "Target 2" and have a look on the figures for Germany and Italy.
Few weeks ago, a meeting in Berlin between Germain economists happened; Title was (my translation) "Can € survive, if not, what will happen?"
https://www.welt.de/print/die_welt/finanzen/article174565168/Top-Oekonomen-zweifeln-am-Euro.html
Comments in French
https://www.upr.fr/actualite/france/des-economistes-de-renom-doutent-de-leuro-un-article-paru-dans-die-welt-traduit-par-vincent-brousseau-confirme-les-analyses-de-lupr
See election results in Italy, Germany.
Citizen and governments in countries are more and more against EU, Poland, Hungary and now Germany, Italy
http://www.dailymail.co.uk/news/article-5501621/Polish-president-compares-EU-occupation.html

I can say in France, the economical and social situation goes from bad to worse. Even democracy is gone.

If you need more explanations, I can provide but will be longer.

oceanman

Trompette wrote: »

I mean, € will disappear and counties will return to there own currencies.
Moreover in this case, EU will break up and countries will rediscover there own democracy.

Why:
If you switch off you TV and read good Internet web sites (I don't know in English), you will find out all the signs of the above.
First find info about "Target 2" and have a look on the figures for Germany and Italy.
Few weeks ago, a meeting in Berlin between Germain economists happened; Title was (my translation) "Can € survive, if not, what will happen?"
https://www.welt.de/print/die_welt/finanzen/article174565168/Top-Oekonomen-zweifeln-am-Euro.html
Comments in French
https://www.upr.fr/actualite/france/des-economistes-de-renom-doutent-de-leuro-un-article-paru-dans-die-welt-traduit-par-vincent-brousseau-confirme-les-analyses-de-lupr
See election results in Italy, Germany.
Citizen and governments in countries are more and more against EU, Poland, Hungary and now Germany, Italy
http://www.dailymail.co.uk/news/article-5501621/Polish-president-compares-EU-occupation.html

I can say in France, the economical and social situation goes from bad to worse. Even democracy is gone.

If you need more explanations, I can provide but will be longer.

It has to collapse because it was always build on sand, I think what we are now seeing is the start of that collapse.

Cute Hoor

While the Euro is built on sand, it cannot be allowed to collapse, it's collapse would lead to the world's financial systems collapsing, perhaps irrecoverably imo. Think about it and what it would mean. When the euro was created hundreds of thousands of person years of IT work went into developing/amending IT systems to cater for a new currency that was to be implemented in January 1999, the sector had 4 years to work on those systems with the certainty of clearly identified exchange rates for each currency while they worked on it. Try to imagine the challenges that would face the sector with a decoupling of the currencies into unknown exchange rates and without a definitive timescale. It would be complete chaos.

Every single day probably trillions of goods and services are criss crossing Europe, north south, east west, all of those goods and services have been bought and sold at fixed prices with both buyer and seller comfortable with the trade price. With a euro collapse and the associated uncertainties around the relative strengths and weaknesses of the new currencies it would surely have a shuddering impact on trade for a significant period of time.

It won't happen imo, the euro will have to be made to work.
Time will tell

Trompette

I agree, it could be chaos for few months, it's why every citizen should have enough banknotes at home in € and other currencies, here Sterling or $ for the leaving and gold, silver metal for insurance if you have some savings. Minimum in the bank, think about bank-run and the new EU law regarding bail-in.
BTW, why do you think this law has been added ? You are more convinced about the permanence of € that the bankers and politics...

Currency union break-ups is something happen at regular time. I understand euro zone is bigger than previous and we are both in.

All your arguments are peanuts compare to economic issues. As EU politics are blind and narrow-minded, they will try to keep € as far as possible increasing the bad result.

Funny thing; I have a bank account in France. My statements are still in € AND in French francs... 16 years after € union.

Time will tell and we will see this time

BrokenArrows

I think we should avoid calling it the pound.

Lets come up with something new. I vote for Spondulix.

Hey sham, lend borrow me some spondus will yiz? (****in hate when people say borrow instead of lend)

Cute Hoor

Trompette wrote: »

I agree, it could be chaos for few months, it's why every citizen should have enough banknotes at home in € and other currencies, here Sterling or $ for the leaving and gold, silver metal for insurance if you have some savings. Minimum in the bank, think about bank-run and the new EU law regarding bail-in.
BTW, why do you think this law has been added ? You are more convinced about the permanence of € that the bankers and politics...

Currency union break-ups is something happen at regular time. I understand euro zone is bigger than previous and we are both in.

All your arguments are peanuts compare to economic issues. As EU politics are blind and narrow-minded, they will try to keep € as far as possible increasing the bad result.

Funny thing; I have a bank account in France. My statements are still in € AND in French francs... 16 years after € union.

Time will tell and we will see this time

When do you think it will happen, and what will be the catalyst for it, and how do you see it happening from a practical point of view, all countries going back to their own currency on 1st January 2019, some countries going back to their own currency on 1st January 2019 and some staying in the Euro, or the eurozone collapsing and every country going back immediately to their own currency next week/next month.

Edit: Why would you have € banknotes at home, would they not be worthless (or at best only as good as the rate your new currency is pitched at) in the event of a Euro collapse.

Trompette

Cute Hoor, I am glad you ask questions, it shows me you are interested open-minded and you think (at least) it could happen.
Two years ago I opened a thread on similar subject and readers did not believe me.

First of all, I am NOT an expert on that matter, just I read a lot and I don't have TV broadcast at home.

The easier question to answer:
When it will happen?
Let say you have a pan full of water on the fire. You cover it with a lid and press hard with you hands on the top to avoid steam to get out. All of us know steam will get out but when it will happen?
Both questions have the same answer.
Easy isn't it?

Today there are some symptoms that could lead to € collapse.
First "Target 2". You can do a search on it and see the figures.
Second, only 1 country has a benefit with € for his population, Germany. But this is a dubious advantage. As far € stays, good for them but if it collapses, it will be harder. And German people have a very bad memory of devaluation, they don't want to happen again. (This is why ECB is in Frankfurt)

I can't say for Ireland but France looses a lot of money due to €. France is net contributor for about 9 b€/year (9 000 000 000). All the payment from EU is paid by French people in fact, not by EU. Moreover EU point out where to spend this money.
€ is too high around 20% today for French economy. The best balance for French economy is 1 French currency= 1US$.
For example, few days ago France had partial election for ~TD in Mayotte island (Indian Ocean). Mayotte is very poor and get about 35M€ each year from continental France. Government says it can't give more, restriction. In the same time EU will give 2b€ the next 2 years to Turkey, France assists with about 170M€/year (Turkey is outside EU!).
With a high €, France can't export industrial and farming stuff. Every year export reduces, this leads to unemployment and poverty and more.
In France, an average of 1 farmer commit suicide every 2 days!
This situation can't last long.

FYI, you can use on-line translator. See bellow the page in bold.
http://bfmbusiness.bfmtv.com/monde/subventions-europeennes-le-palmares-des-gagnants-et-des-perdants-850298.html

"practical point of view" Hard to say. But what is for sure is, if a country by referendum/election want to quit €, all other countries will try to punish it. In fact, I think it will be more chaotic, not planed long before.

"Why would you have € banknotes at home" You will need money for your living. Remember what happened in Cyprus. First, banks will close, usually Friday evening and you can't withdraw at the ATM. Few days later, you can withdraw only a small amount. But remember now banks can take the (not your in fact) money in your account. This can last few weeks or months. Better to have banknotes at home than no banknote at all.
€ at home is for living
Other currencies for exchange for living, Sterling, Swedish krona... if needed
If you are a bit wealthy, gold, silver metal, Yuan, Rouble... banknotes as insurance
Bank account in NON € country (Sweden, Switzerland...)

For sure it will have a big mess for few weeks/months but after economy will start again stronger.
Have a look on what says Joseph Stiglitz about €.

Hope this will answer a bit your questions

Cute Hoor

Anything is obviously possible, but I don't believe the Euro will collapse, I don't believe it will be allowed to happen, it's my opinion, time will tell.

Not sure about the letting off steam bit.

'With a high €, France can't export industrial and farming stuff. Every year export reduces, this leads to unemployment and poverty and more.'

This is the statement that intrigues me. From what I can gather, France's exports hit an all-time record of €41.9bn in December 2017 (they dropped back a bit in January), over the last 5 years France's exports have gone from around €36bn to over €40bn.

Unemployment rates in France, at 8.9%, are at a 9 year low. Unemployment rates in France were around 10% when the Euro was introduced, so the unemployment rate has reduced during the lifetime of the Euro, fairly significantly before the WWR, maybe they would have fallen far more dramatically outside the Euro, maybe they wouldn't have fallen at all, who knows. The unemployment graph (not the %) for the UK (outside the Euro) is reasonably similar to France's over the same period.

Trompette

Regarding import/export, from official web site (gouv.fr)
http://lekiosque.finances.gouv.fr/fichiers/etudes/thematiques/A2017.pdf
Trade balance (milions €) Table 1 (figures are negative = deficit)
2013: -61781
2014: -58484
2015: -45103
2016: -48340
2017: -62264
See graph 2 as well easy to translate and understand.

De plus, le déficit manufacturier s’accroît et atteint un nouveau record à 40,6 milliards en 2017, après 35,3 milliards en 2016

In addition, the manufacturing deficit grows and reaches a new record at 40.6 billion in 2017, after 35.3 billion in 2016

Have a look page 4 graph 9 to compare with other countries.

Unemployment: There are official and non-official figures.
To be able to tweak the figure, government splits unemployment in 5 categories, A to D.
https://www.agoravox.fr/actualites/economie/article/vrais-chiffres-chomage-janvier-201916
Is the definition of unemployment the same as in the statistics?
And what about people out of the statistics?
You value is official, not real live.
Anyway, poverty is increasing, people have now to get 2 jobs, etc.

Cute Hoor

The shape of your ball is changing with each passing post, I'll pass.

We'll see what happens.

Charles Babbage

Trompette wrote: »

Thank you for these info.

Roughly:
Today € is 20% above US$
Sterling pound is 30% to 40% bellow US$ and Irish pound could be 25% bellow Sterling.
=> Irish fall could be 55% bellow US$.
If I compare to now with €, Irish pound could fall maximum 75% bellow current €.
In the mean time, French Franc will fall 15-20% to 1FF=1US$
I am right?
As you certainly guessed, I am French living in Ireland.
Can I say?; If I buy an house today in Ireland and the event happen, I could loose 55-60% compare to if I buy in France.

I am not very skilled in the matter.

Explain why the Irish pound should be less than Sterling?

Thargor

I have a feeling we'll be seeing a lot of new accounts posting "analysis" like Trompettes from now on with the expulsion of all these Russian diplomats.

Trompette

Charles Babbage wrote: »

Explain why the Irish pound should be less than Sterling?

This is from the answer in post #2 for my initial question.
He said

From memory our Punt exchanged in a band of about 75 pence to £1.05 with Sterling,

I took almost the lower value, 20% instead of 25%.
If you have another answer, please let me known and add some evidences.

Cute Hoor wrote: »

The shape of your ball is changing with each passing post, I'll pass.

Sorry I can't get it, my English is basic as you can read.

Thargor wrote: »

I have a feeling we'll be seeing a lot of new accounts posting "analysis" like Trompettes from now on with the expulsion of all these Russian diplomats.

This is not "analysis", it only what happen in France and what French citizen are thinking more and more, same in other countries.
I don't understand the relation between EU economy and the expulsion of all these Russian diplomats.Is it a joke?