Friday, Apr 06, 2007
Club Med and Ireland v Germany
The Telegraph: Rising euro nears danger level as politicians round on ECB
The euro is rising because it is the only serious alternative to the USD.
What happens when the club med countries and Ireland start to bail from the euro.
Just like when the UK bailed from the ERM in 1992, they will wait for their economies to be in a right mess before exiting.
The perfect storm will be starting in 2008
Stocks will be tumbling - everywhere
Property will be tumbling - everywhere
The USD and EUR will be tumbling
The carry trade would have imploded
There will be all sorts of currency crises going on
Where will all the money go?
Could it be gold???
Posted by sold 2 rent 1 @ 06:06 AM (141 views) Add Comment
14 Comments
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3. Nohpc said...
lol you have got to be joking. If the EUR and the USD collapse at the same time they will still be equivalent value against each other. Do you really think people are going to pile money into gold when everything else has collapsed? Gold is more likely to plummet than any other investment. I have recently pulled out of my gold isa and put it into a simple mini isa.
4. Yoyo1 said...
How do you buy gold? At the jewlers / derivatives / futures / mining stocks / bullion. Anyone got any ideas?
5. harold said...
Could it be gold??
Well, yes it could be gold, but I wouldn't be too certain about the demise of the euro. For the euro to collapse would require total financial Armageddon. Things will be bad for sure, but with economies like Germany backing the euro, its unlikely to go the same way as other fiat currencies - despite the wishes of euro-sceptics. The main sufferers will be £ and $, i.e., countries with huge trade deficits and high inflation.
6. tyrellcorporation said...
C'mon Harold our inflation rate is perpetually low and interst rates will never again rise above 5.5%...
7. confused76 said...
I believe the strength of the Euro is here to stay (backed by large growth potential eastward). Countries that now complain about single currency used to pay 10- 15% interest rates on their debt (Sarkozy, Berlusconi are talking b/s). Noone has an interest in weakening the dollar further, but it will take a change of leadership in the White House to regain the US its global role (...increase influence in South America?). Energy dependency is the other big issue the US needs to sort out (maybe buying uranium now more sensible than buying gold?). Major currency swings up/down for speculative currencies in "island" economies: Pound, Sweden, Iceland, Japan, AUS, NZ...? Of course major crises can always happen...
8. royston said...
The one thing that bothers me about gold is that central banks around the world have been steadily divesting themselves of gold over the past decade, i.e. there has been and continues to be a steady increase of supply. Now, maybe they will reverse course but IMHO that is a gamble. Personally, I prefer non-gold commodities, other metals, etc.
9. inflation is eating my savings said...
Gold? It's pretty functionless really. You cannot eat it, you cannot smoke it, you cannot shelter under it.
The safest place for your money is something essential, like a house, or a large truck load of single malt.
As for economic cycles- these things are an overstated myth. In physical and biological systems, there are patterns, cycles, order- but these are exquisitely regulated by other underlying simple phenomena. Economics cannot be predicted like this- there are underlying chaotic phenomena meaning all predictions are largely meaningless. It is only usually possible to see "patterns in hindsight". yes booms lead to busts and busts lead to wars which lead to more booms. But booms often lead to gentle slow downs, or inflation. To insist that there is some kind of overwhelming order to this process is equivalent to invoking a god. Economic predictions are predictions, and must always be taken with a pinch of salt.
I was in the US last week, a friend is managing the legal stuff for some bankruptcies in the sub-prime sector. She said the shit had not yet hit the fan yet, however, the major cities will be largely untouched. The targets of sub-prime lending are not the types of people likely to be buying condos in Manhattan, for example. The damage is limited to the last fools, but the market is still ticking over reasonably. The situation is better here, as the interest rate escalation has been minor compared to that in the US. My feeling is that the crash is nowhere in sight. There is too much new money entering the country. These are only predictions, so take them with a pich of salt.
I cannot believe I fell for this website. Who exactly is behind it? The agenda is to stop us buying houses, therefore containing the boom. It is not in our interests.
Goodbye everyone and good luck.
10. sold 2 rent 1 said...
When every last bear turns bull....
11. Ticktock said...
Ref- Gold? It's pretty functionless really. You cannot eat it, you cannot smoke it, you cannot shelter under it.
But just might prevent inflation eating your savings?
Ref- there has been and continues to be a steady increase of supply.
Where from? Most mines have been reducing supply for some time. Yes Central banks have been big sellers (Gordon sold 50% of UK gold at about $250 oz!!!!) but not so now. For example, Germany won't sell an oz. of their gold (much to the frustration of Washington)
12. harold said...
"She said the shit had not yet hit the fan yet..."
Indeed.
13. dohousescrashinthewoods said...
Sorry to lose you, inflation is eating my savings, it's been good.
14. Shipbuilder said...
Inflation is eating my savings, unfortunately this isn't all about you.
I've been following this site for a while, contributed a few posts and generally kept coming back becuase of the entertaining variety of people and views here, including the interest in the wider economy it has inspired in me. Everyone's entitled to their views, but it seems that there's just as many greedy and unpleasant people on here as in the housing market, the difference being that they have a house and you don't, they took the gamble and you didn't.
Tough. If you lost out, don't blame anyone else. It's all part of the sacred free market everyone seems to espouse - in reality the deeply unpleasant and soulless 'i'm alright jack, f*ck everyone else' attitude of the capitalist consumer. You're simply a victim of that free market - don't whinge when you're on the wrong end.
The reality is that we have the most right wing US and UK governments in living memory engineering a massive transfer of wealth from the young to the old, the poor to the rich that will cost this country dear in the long term.
Until recently, a working class man could be educated for free, work hard and eventually buy his own house on a single wage, while his wife could spend her time bringing up the family, if she so wished. They could look forward to a long and happy family life.
That's over, possibly forever, and yet we wonder why there are ASBO kids and 'scroungers'. Where's the future to look forward to?
Perhaps if we in the UK were a little less obsessed with ourselves and our money and status, this whole sorry circus may never have happened. I hope it comes to an end soon. Go for a walk, paint a painting, write a book, whatever, live your life - it's too short.