Euro collapse-proof currency ?

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So Freece could bring down the euro. And that could have a knock on effect for Italy, where I live(and bank). British banks are horribly exposed to Italian debt making them a bit of a dubious choice.

America is not looking brill economy wise so the dollar isn't exactly a sure bet.

But up the road from me is Swizerland, could I stash my, not spectaular but important to me, savings there ?

Do they have the last non wobbly, euro collapse proof currency left ?

I'm not yet running around like a headless chicken, but the headlines are gettting to me and I can't digest my toast this morning.

Even if it is just theroy I'd like to have "a plan"

It'll make me feel better.

that would be Greece, not Freece, (the love child of France and Greece?)

Nope, Switzerland won't do it - they recently effectively devalued their currency.

The whole reason why Greece might vote to leave the Euro is that then they will be free to devalue their currency and so give themselves a boost to their economy at the expense of everyone else's.

There is no currency that I would put my bets on. Nor most investors. This is why Gold has rocketed to the highs it has - everyone is putting their money there instead of in currency.

If I had money to invest I would be buying silver and investing in land and other finite resources such as this.

Devaluation, by the way works thus (very simplified)

1. Country prints extra money and announces loads of new public spending plans to be paid for with the free money it has just printed
2. Too much money in economy means that supply of money goes up. Because you need to have supply and demand of money in equilibrium the only balancing factor that works is value of that money (is conversion rate against other countries) so price of money goes down.
3. Because isolated country now has more money in bank it employs more people and then there is a very high risk of inflation as everyone puts their prices up. This risk is compounded also be fact that because currency is worth less companies find export demand increases and that they can sneak in soem price rises and still be competitive on the global market.

So devaluation is generally 'good' for Joe Blogs in the street of that country - he has work again, company exports are up and govt is spending money on public services. The downside is (a) risk of inflation, (b) all foreign investors in the country will lose money and that = mistrust, (c) nationals in that country won't be able to afford to go abroad on holiday or invest abroad which = isolation, and (d) if all other countries do the same the devaluation doesn't work.

British banks may be exposed to Italian debt but they are far more diversified than one country and they have safety-nets in place since further bail-outs are unlikely to be approved. Sterling is looking pretty stable.

So I should take say half, whip it over to the uk, and bung it in a bank there as a "eggs not all in one basket" measure keep the rest here....and try not to let the papers scare me too much?

S'just...well if the euro has to fail I wish I wasn't going to e doing it under the cloud of the new lira...the old one and it's millions doesn't bode well for future anti inflation stratagies.

I have all my cash, investments and pensions in UK banks and other institutions so I'd be a hypocrite if I said to put it elsewhere. :) The FSA scheme means that all deposits in UK banks up to £85,000 per organisation (important as some banks are in the same company) are covered. Straight deposits are not paying more than about 3% which isn't quite keeping pace with inflation, but better than keeping it under the proverbial mattress.

No, don't let the papers scare you too much but the 'eggs in baskets' adage is always wise one when it comes to money. Recommend you seek out Stephanie Flanders' blog on the BBC as there's someone that genuinely knows her stuff and is not prone to alarmist rubbish.

Recommend you seek out Stephanie Flanders' blog on the BBC as there's someone that genuinely knows her stuff and is not prone to alarmist rubbish.

Off to read her.

Am tired of reports that seem to measure their sucess in how much of a stressed tummy they give readers.

Today some of the appear to be infering that the Greek issue could result in war. Either that or somehow the call for a refurendum is only similar to the shot that heard around the world in a very abstract sense.

S'all very scary making when you live in a country with a fascist histroy.

Erm, Squiffy, should I keep my savings in my bank in Norway, or bring it in to the UK?

Now that's an interesting one, Quint

Norway has always been slightly more stable, simply because (like Switzerland) it has always kept the whole EU thing pretty much at arms' length. Unlike Switzerland it is not very heavily dependant on a highly volatile FS workforce made up of many multinationals.

I would imagine that the diversity of the sources of GDP in Norway means that it would see no reason at all to indulge in any kind of devaluation, but that would depend on the state of the economy there (you probably know more than I). I know that there were many links to Slovakian/Slovenian toxic banking debts but I imagine that the fallout from these has largely passed through the system now (although I am sure there is still quite a high level of interdependancy there).

Standing by and watching other companies devalue can give you quite an advantage long-term if you are able to withstand the short-term hits. I am sure Norway's preferred position would be to avoid devaluation, but it rather depends on what the rest of the Eurozone do.

So, if I were (for example) Norwegian and living in the UK, I would keep most of my stuff on deposit in Norway unless I was reliant on that income funding my day to day spending in the UK. so long as you can leave it there I think there is a higher risk of £ devaluing against the Kroner medium/long term than vice versa.

BUT I would also be watching it all like a hawk.

Isn't the Australian dollar more or less on a par with gold (if you graph it over a five year span)? Though I think it is also inescapably linked to the Chinese economy, so that might not work.......(I'll get my coat).

I'm pretty happy to be paid in Australian dollars these days!

Having been a currency trader at one time (now reformed!) here is a truism: There are no 'safe' currencies. There are safer, possibly, but as soon as the speculators starts (read traders) they will target whatever currency to make a buck. (both NOK and CHF have been targeted in recent times)

If your income and expenditure is Euros....I'm afraid your are stuck as you will probably loose out every time you change money. You may get lucky and make a turn, but currency trading is a form of addictive gambling and the casino always wins in the end.

Your only alternative is to diversify and buy 'real' things. This has it's problems too. Do your homework and spread it about.

Stephanie Flanders speaks lots of sense.

Good luck!

HB

Thanks Squiffy, I think I shall keep my savings in Norway for now, and keep an eye on things. No point moving anything across from here, as the exchange rate is currently really awful.

consider gold as it used to be a very good hedge in times of trouble.
etfs (not physical)