If The Euro Fails?

[thaimate]

What do you think will happen if the Euro fails? just reported that Belgium is also in trouble And to be honest it seems that the contagion really is spreading,what will this do to the pound especially against the Baht.

[roamer]

There has to be a real possibility of a run on the Irish Banks, now that's what could prove to be contagious.

[Ozzy]

Where did you find this message about trouble of Belguim ??

[roamer]

Where did you find this message about trouble of Belguim ??

Do a news search. The costs of servicing the Belgium debts has rose sharply and the fact they have no effective government in place exacerbates the situation, aside from that its believed that the exposure of Belgium to the Irish banks might be around 5% of its GDP.

[aussiebebe]

There has to be a real possibility of a run on the Irish Banks, now that's what could prove to be contagious.

I don't think there will be a run on the banks as I think the Irish government foolishly guaranteed bank deposits before realising the full horror of their liabilities. Lenihan - the Irish finance minister - formed the 'National Asset Management Agency' which initialy paid banks £50 billion for outstanding loans which had a face value of £70 billion but the quality of the loans was nothing like what the banks had said - only half were likely to be repaid - so the government is trapped in a black-hole of debt which threatens the entire country.

Instead of the Euro failing, there is speculation that there might be two different types devised; one for weaker, and one for the stronger economies.

[thaimate]

but what of the pound?

[H2oDunc]

Belgium's debt reaches 100% of annual national income

Link to the article is here

http://www.dailymail.co.uk/news/article-1332686/Spain-Portugal-Belgium-set-follow-Ireland-debt-crisis-threatens-euro.html

Spain and Portugal probably next.

Why should the pound be in trouble if or rather when the Euro fails. It is not linked to the Euro and if anything I would have thought it would only make it stronger as it has proved the weakness of having a single currency for various countries.

Lets hope that along with the Euro it brings an end to the failed superstate as well.

[cloudhopper]

Lets hope that along with the Euro it brings an end to the failed superstate as well.

[Naam]

why do i find the saliva spitting EURo-Land haters amusing?

[thaimate]

why do i find the saliva spitting EURo-Land haters amusing?

I dont know Naam ,but i am sure you have some doom and gloom to spread to the rest of us,you usually have.

[bartender100]

So how do we hedge off a collapse of the Euro and possibly the western banking system while living in Thailand? what would be the effect? is stashing gold a good idea?, or possibly keeping very liquid in Baht, it seems something big is going to happen in the next few months one way or the other, or are we getting paranoid, one day are we going to the ATM or bank and no money appears.

I wonder if countries like Germany kept their reserves of Deuchmarks hidden somewhere ready

[Naam]

why do i find the saliva spitting EURo-Land haters amusing?

I dont know Naam ,but i am sure you have some doom and gloom to spread to the rest of us,you usually have.

i have never been a doom&gloomer T-Mate and i hate to make forecasts, especially when they concern the future

but we should be prepared for a global financial tsunami, which will affect most assets and a bunch of currencies as well, should the €UR implode.

p.s. although it wouldn't benefit me financially, i'd really like to see some of PIIGS and of course some of the banks run by banksters go bankrupt

[Berkshire]

Where did you find this message about trouble of Belguim ??

Do a news search. The costs of servicing the Belgium debts has rose sharply and the fact they have no effective government in place exacerbates the situation, aside from that its believed that the exposure of Belgium to the Irish banks might be around 5% of its GDP.

I wouldn't worry about Belgium too much. But if Spain goes, the Euro and EU are in big trouble.

[thaimate]

Where did you find this message about trouble of Belguim ??

Do a news search. The costs of servicing the Belgium debts has rose sharply and the fact they have no effective government in place exacerbates the situation, aside from that its believed that the exposure of Belgium to the Irish banks might be around 5% of its GDP.

I wouldn't worry about Belgium too much. But if Spain goes, the Euro and EU are in big trouble.

the Euro already is in big trouble ,but the question again is ,will it affect the pound?

[Naam]

the Euro already is in big trouble ,but the question again is ,will it affect the pound?

i think it will affect the Pound in a negative way.

my reason: investors will draw parallels looking at UK debt and think what PIIG debt has "accomplished".

[cloudhopper]

the Euro already is in big trouble ,but the question again is ,will it affect the pound?

Undoubtedly. And every other currency plus gold. Unpredictable geo-political policy changes and unpredictable events will guide this market in a totally unpredictable way.

Sooner or later though...

[Naam]

some soothing news for the British friends here. the econ eggheads and their followers make a big hoo-hah when pointing to UK's debt/gdp ratio which, by the way, is better than the one of Germany or France. hardly anybody mentions a ratio which is much more important, i.e. the ratio debt/revenue.

anals and eggheads seem to forget that a country's debt is not serviced or paid back by GDP but by REVENUE. UK's ratio Debt/Revenue is 169.2, for comparison Germany's ratio is a wee bit better at 165.3

i ask "where's the beef?"

[churchill]

the Euro already is in big trouble ,but the question again is ,will it affect the pound?

i think it will affect the Pound in a negative way.

my reason: investors will draw parallels looking at UK debt and think what PIIG debt has "accomplished".

I think GBP will trade lower short term along with the Euro but not to such a degree / Longer term I think it will strengthen and if the Euro does break up GBP will trade along with the stronger half IMO /

[cloudhopper]

the Euro already is in big trouble ,but the question again is ,will it affect the pound?

i think it will affect the Pound in a negative way.

my reason: investors will draw parallels looking at UK debt and think what PIIG debt has "accomplished".

I think GBP will trade lower short term along with the Euro but not to such a degree / Longer term I think it will strengthen and if the Euro does break up GBP will trade along with the stronger half IMO /

IMO it will depend on how badly UK banks are affected by multiple PIIGS sovereign debt defaults and what the UK government does about it (should that happen) and/or how much money the ECB is willing to print in the attempt to prevent a PIIGS sovereign default (should that happen). The national political pressures for a PIIGS sovereign default and separation from the EU could be sudden and enormous, overwhelming the political power wielded by stock and bond holders. The UK and Germany would both like to stick it to Bernanke by weakening the EUR in the face of the latest QE2 attack policy. Everyone has an incentive to ratchet up the money supply and no government can survive a policy of austerity. Every currency cannot devalue against every other simultaneously, (but they can against gold!) so battle lines FX rates will change erratically. The first zephyrs of WW3 IMO.

Chaos is unpredictable and exponential phenomena become apparent only quite near the end...

http://www.youtube.com/watch?v=RO8aa9PGxvU

PS Naam has never been a doomer unlike myself and a few others on this board. I prefer the term "neo Malthusian" however.

[Naam]

Naam has never been a doomer unlike myself and a few others on this board...

for a short time i was gloomy. when the crisis was at its height i flew to Germany for an overdue open heart surgery, knowing that it is quite difficult to trade / issue instructions to my bankers when wired up and connected to hoses and pumps in an intensive care unit without the assistance of a bottle of portwine.