vania-janet/multiturn-rag-retrieval-data huggingface dataset:
If you are really worried your best bet is to move all your cash from Sterling into a foreign currency that you think will be resilient should Brexit occur. I would avoid the Euro! You could look at the US Dollar perhaps, make sure you are aware of the charges for moving the money over and back again, as you will at some stage probably want to get back into Sterling once it settles down, if it does indeed fall. Based on my experience on the stock markets (I am not a currency trader) I would expect the pound to fall fairly sharply on a vote for Brexit and the Euro to do the same.  Both would probably rebound quite quickly too as even if there is a Brexit vote it doesn't mean the UK Government will honour the outcome or take the steps quickly. ** I AM NOT A FINANCIAL ADVISOR AND HAVE NO QUALIFICATIONS AS SUCH **
A lot of smaller (and/or weaker) countries did not have much choice when Germany and France decided to rename the German Mark as the Euro, as most of their trade was already in Marks.  It was even common for their population to have their savings in Marks.   So the question was. Do we wish to have to use the Euro   with or without a seat on the board? It was a no brainer for them at the time... The UK has a lot of trade with the USA and other countries outside of the Euro zone, so we are unlikely to have to join the Euro.    So in the end it comes down to this point -  if the British voters trust a UK government they elected more or less than an EEC government mostly elected by people in the other EEC countries. I don’t think the UK will be joining the Euro anytime soon, but everything can (and will) change with the passage of time.  (After all the USA used to be part of the pound trading zone and please can you pay us all the back dated tax you stop paying after a little tea party!) Update: Given what has just happen to Grease and Spain and the Conservative Party has the most seats in the UK parliament, I don’t think the UK will not be joining the Euro for the next 5 years at least
"The benefit of having gold to trade is that there is almost always someone that will take gold when the fiat currency is in trouble.    The potential downfall of doing this is that when people think the fiat currency is in trouble, they tend to buy up gold, thus driving up the price.  This means that you get less gold for each hour of work you perform (deer-haunch, basket of apples, etc.).    Even more, if the financial crisis is limited to only one fiat currency, you have a situation where that fiat currency devalues but others can gain in value as people try to sell their old currency for the new standard currency.  If people also sell their gold to buy up this currency, that lowers the price of gold in that currency.    For example, let us assume that gold was 1000 dollars an ounce and 1000 euros an ounce.  Suddenly, people start thinking that the euro is in trouble, so they start buying gold.  The law of supply and demand kicks in (more buyers, same supply, so higher prices) and gold is suddenly worth 2000 dollars and 2000 euros an ounce.  If you start buying at this point, you get half as much gold as the person who bought in the beginning.  Suddenly, the euro collapses.  Stores that used to take euros start demanding dollars.  Suddenly, it costs 20,000 euros for an ounce of gold but an ounce of gold will only get you 1,000 dollars since everyone is selling their gold to get dollars.    The people who buy gold in the ""panic"" end up losing half the value of their money if not more.  The ""speculators"" that bought gold at $1,000, sold it at $2,000, and bought it back at $1,000 now have all their gold back plus the $1,000 the other people lost."
**OFC there is more to it than meets the eye!** Its a nice breakdown though.  In my opinion, there are just 2 ways out:  One is to merge the whole European Union into one Nation, much like the **United** States of America. (*United States of Europe*, ehehehe) But i guesss Germany, France and UK are not very interested in feeding everyone else even more.  **OR**  Split.  The thing is, the ones with the most power are not interested in one of these solutions.  And now to come to your question, YES Recession is coming (isnt it alrdy here?)  Greetings from Austria!
I understand how it works very well - as Europes financial centre. I understand that without UKs EU membership those days are gone. I understand that rents in Frankfurt are skyrocketing because banks are fleeing a sinking ship. Without financial passporting rights to the worlds second largest economy London as a financial centre is finished. New York does well because it's part of Americas economy, Hong Kong does well because it's part of China's economy.
Yes, they need expansionary monetary policy to help them with their internal devaluation.   However, this involves leaving the euro. So there are additional costs to the normal costs of inflation, they are experiencing some of these costs right now as capital is fleeing the country and it will get worse if/when they really leave. It's also worth keeping in mind that Greece doesn't have very good institutions (it's why they are in this mess in the first place), so it's hard to say that they'll be able to leave the euro and devalue without also trying out policies that will lead to hyperinflation.  Internal devaluation is possible without expansionary monetary policy, but it takes some time and the capital flight in anticipation of taxes/neo-drachmas means that meanwhile there is also little investment in the economy in the meantime.
That's interesting. So Spain could be back in crisis mode if a crisis were to occur in Latam?  The difference is quite large so it must mean Spain owns a heck of a lot of foreign assets producing significant returns relative to their GDP...
"If the ""crash"" you worry about is a dissolution of the euro, then the main thing you should concern yourself with is liquidity.  For that, purchase the most highly liquid gold ETF or futures contract, whichever is more appropriate for the total amount of money involved.  Any other way and you will lose a significant chunk of your assets to transaction costs. If, on the other hand, the ""crash"" you were concerned about were the total collapse of the world economy, and people around the world abandon all paper currencies and resort to barter as a method of trade, then I can see buying several small pieces being a rational strategy, although then I would also question whether you were a sane individual."
"I think people naturally overreact to crises. And, like you, I'm not really sure what the answer is. Capital requirements were a good start though. It also makes you wonder what would happen if ""mark-to-market"" accounting was not necessary, would the severity of the financial crisis have been muted?   At the same time, maintaining the value of worthless debt seems equally silly (I'm talking to you, Europe!).   Just an interesting time. I don't think things are as broken as people make it seem. 2008-9 was a big check and re-balancing. Unfortunately the consumers haven't been re-balanced like businesses due to poor employment and wages.  Sorry, I'm just talking in circles now."
Very interesting.   I assume a lot of the financial practices of European companies have their roots in Middle Age banking practices, so you'll have to delve into some history.  Also relating the Euro debt crisis to your topic will make your thesis timely and more interesting.  Best of luck!
Given the way people act in reality, I think this would lead to people buying ponzi scheme currencies, or preferring the ones with the best advertising budgets or aesthetic look, or otherwise getting constantly scammed.  I certainly don't think people would usually save in the best reputation currencies, and if they did, I figure those currencies would get new management once they became successful, who would sell them out for short term gain and be just as prone to printing their buddies out of bankruptcy as the government.  If even nation states, who have a very strong long term interest in maintaining good currency, play all sorts of shenanigans with it, I see no reason to expect bodies with shorter term interests would do a better job.
In order to manage the short-term risk, and long-term inflation expectations, it might be necessary to incorporate a lot of tightening, either fiscal (higher taxes and/or lower public spending), or monetary: (higher interest rates, unwinding QE, new requirements for higher core capital for banks) Moral hazard There are risks of moral hazard for individuals: however, as a society, we were prepared to accept the moral hazard for financial institutions and their staff, so that may or may not be an issue: it is likely to be a question of long-term expectations. If the expectation is that this is at most a once-in-a-lifetime occurrence, then the consequential risk from moral hazard ought to be lower. Excess profits to lenders Lenders will typically work on the basis of a certain proportion of defaults, so paying off all loans effectively gives them an artificial boost to their profits. Worsening balance of payments There is to a degree a prisoners' dilemma facing nations here. Pressing the reset-button on personal debt across many of the countries experiencing demand-collapse would benefit all of them. However, if just one such country were to do it alone, they alone would increase domestic demand, resulting in a large increase in imports, but no significant increase in exports.
"What a great explanation! I was familiar with many of the concepts, but I've learnt quite a lot. Do you happen to know any sources for further reading that are just as understandable to a non-economist? And/Or would you mind continuing / expanding this into whichever direction you find worth exploring? I would love to see this explanation ""connected"" to the debt crisis and how/why the US and europe seem to be in different situations there. Maybe that would be too complex to explain in more detail using your model, but maybe it is possible..?"
"No one's worrying about ""GFC II."" A Greek default/exit would hurt banks, but not that much more than is already priced into the market. The capital most big banks have raised would be sufficient to deal with Greece contingency. The real damage would be to GDP figures."
[Monetary Policy Inflexibility](https://en.wikipedia.org/wiki/Economic_and_Monetary_Union_of_the_European_Union#Monetary_policy_inflexibility) &gt;Since membership of the eurozone establishes a single monetary policy for the respective states...  without the possibility to print money as an easy way out.  Italy's options are privatization, austerity, and shifting the burden on to the taxpayer.
Lots of countries *have* printed themselves away from debt. Not all inflation turns into a death spiral like Zimbabwe (or Weimar Germany) did, for that you need to have a really shitty economy that no-one believes in.  The problem with Japan right now is that they are trying to print their debt away, but as they do so, their currency *appreciates*. Gold medal for the first one who manages to explain that one.
See the problem is it's very hard to see how they can leave or ask to leave. There's very little on this in the treaties. They can't be kicked out under any treaty to the best of my knowledge. The only way I can see them getting kicked out is that they are cut off from Target 2, forced to print money/introduce capital controls etc, that breaks the laws of loads of treaties and they then get kicked out of not just the Euro but also the EU.  It's all so incredibly messy.
Well, I didn't know those existed. Author might not either.  I'm also not aware of the trading requirements in Europe. Could be different than US.  In any event, I think most who are concerned are (1) doomsayers who've predicted 30 of the last 1 recessions, (2) don't understand the point of leverage and are irrationally scared of it, or (3) understand leverage can be good but think this will be used in a bad way.
I know this is beside the point, but part of the reason Europe can afford such a strong social safety net is because the USA provides substantial military support.  If the EU nations had to pay the full bill for their own defense, I wonder how that would effect those safety nets?
At some point in 1992, Germany had raised interest rates to curb future inflation. However, Britain wanted Germany to cut rates – Britain was not in as enviable a position, economically speaking, and its currency was under pressure. The currency band system would put Britain in a tighter spot with Germany raising rates. Enter George Soros, the Hungarian billionaire, a.k.a. ""the man who broke the Bank of England."" Soros took a huge short position against the Sterling. He believed the Sterling was overvalued relative to the German deutsche mark, and Britain would be forced to devalue its currency and realign with respect to the ERM. Other traders followed and also sold the Sterling short. With much pressure on the currency, the Bank of England had to buy up Sterling in order to maintain its agreement under the ERM. Of course, they needed to borrow other currencies to do this. Soon the BoE was in over its head defending the Sterling, realizing the exchange rate it needed to maintain under the ERM simply wasn't sustainable. Britain was forced to withdraw from the ERM on Black Wednesday, September 16th, 1992. And so, Britain does not use the euro today – and any talk of doing so is politically controversial. Therefore I wouldn't bet on Britain adopting the euro any time soon – too many of the players are still in politics and remember 1992 well. I think if Britain adopting the euro is ever to happen, it will be when the memory of 1992 has faded away. BTW, George Soros made off with more than US$1 billion. Soros is a very smart guy."
"A falling exchange rate is an indication of falling confidence in a currency.  Countries like Iran or Venezuela, with a managed exchange rate, set their exchange rates at a higher value than the market accepts. Such market expectations may be influenced by poor government management, interventions into markets (such as nationalising businesses) or general instability / scarcity. The governments act to manage that uncertainty by limiting the availability of foreign exchange and pegging the exchange rate.   Since there is an inadequate supply of trusted foreign currency people turn to informal exchanges in order to hedge their currency risk.  This creates a negative feedback loop.  People in government who have access to foreign exchange start to trade on informal markets, pocketing the difference in the official and unofficial rates.  The increasing gap between the two rates drives increasing informal market exchange and can result in speculative bubbles. Driving instability (or economic contradiction) is that the massive and increasing difference between the official and market exchange rates becomes a powerful form of rent for government officials. This drives further state-led rent-seeking behaviour and causes the economy to become even more unstable. If you're interested in a more formal academic study of how such parallel markets in currency arise, ""Zimbabwe’s Black Market for Foreign Exchange"" by Albert Makochekanwa at the University of Pretoria is a useful source."
well, no, i just see some really huge numbers been thrown around, like Spain's banks will need several tens of Bn euros to be rescued... that's a huge amount of money, even if not a large share of the problem, a nation in trouble should not be saving the private sector's ass.
"Like Jeremy T said above, silver is a value store and is to be used as a hedge against sovereign currency revaluations. Since every single currency in the world right now is a free-floating fiat currency, you need silver (or some other firm, easily store-able, protect-able, transportable asset class; e.g. gold, platinum, ... whatever...) in order to protect yourself against government currency devaluations, since the metal will hold its value regardless of the valuation of the currency which you are denominating it in (Euro, in your case). Since the ECB has been hesitant to ""print"" large amounts of currency (which causes other problems unrelated to precious metals), the necessity of hedging against a plummeting currency exchange rate is less important and should accordingly take a lower percentage in your diversification strategy. However, if you were in.. say... Argentina, for example, you would want to have a much larger percentage of your assets in precious metals. The EU has a lot of issues, and depreciation of hard assets courtesy of a lack of fluid currency/capital (and overspending on a lot of EU governments' parts in the past), in my opinion, lessens the preservative value of holding precious metals. You want to diversify more heavily into precious metals just prior to government sovereign currency devaluations, whether by ""printing"" (by the ECB in your case) or by hot capital flows into/out of your country. Since Eurozone is not an emerging market, and the current trend seems to be capital flowing back into the developed economies, I think that diversifying away from silver (at least in overall % of your portfolio) is the order of the day. That said, do I have silver/gold in my retirement portfolio? Absolutely. Is it a huge percentage of my portfolio? Not right now. However, if the U.S. government fails to resolve the next budget crisis and forces the Federal Reserve to ""print"" money to creatively fund their expenses, then I will be trading out of soft assets classes and into precious metals in order to preserve the ""real value"" of my portfolio in the face of a depreciating USD.
Rescuing the private banks has made very little difference. None of the countries in real trouble have large banking sectors. The majority of the problems has stemmed from the totally ridiculous public spending. Greece has a hilarious history of over spending. For example, their civil servants used to be paid for 14 months of the year. They also have comedy tax collection. According to there tax office there is only 324 swimming pools in the entire place..... a quick count on satellite reveals 1000s.  Some data is here: http://www.nytimes.com/2010/05/02/world/europe/02evasion.html?pagewanted=all&amp;_r=0  In reality many nations werent ready for the euro in the first place.   But to be clear, blaming the banks is like blaming a snowball for the sinking of the titanic. The numbers aren't even in the same league.
"Yes, except many, many Icelanders still owe debt on assets they purchased in krona (the Icelandic dollar) before it collapsed.  Now many are stuck with homes, vehicles, etc. on which they owe twice the underlying value.  You'll often see this referred to as ""private debt overhang"" in financial news articles, and it is not reported on nearly enough.  Just letting the banks fail doesn't unwind all of the ridiculous currency speculation that took place in Iceland.  They may be on their way to recovery...eventually...but they're still in terrible shape in the short term."
Is the Euro any better off especially considering problems in Greece, Ireland, etc. Do countries like Switzerland have enough liquidity and available ways to invest there? In order for the US to STOP being the world's reserve currency, you must have something to replace it with, and really, can we realistically think of one country/currency with the capability to become a new 'world reserve currency'??? Secondly, even then should such a shift actually happen, it doesn't mean people will ALL just magically stop buying US debt. Yes the demand would go down, but it would not go to zero. There are after all a worldfull of other countries who's money is right now NOT the world reserve currency, and yet they are able to sell bonds and people and even other countries invest there. (China for example does not invest exclusively in the US), so yeah we might have to start paying more interest to get people to buy US debt, but it's not like the demand will go away. Save your money, save your time, don't buy into this dung.
Currently many countries (and non-government bodies) hold dollars to facilitate trade. If the dollar is no longer used in their trade, then they no longer have a reason to hold those dollars. If every other country starts to dump their dollar holdings into the world currency markets, the number of dollars floating around in those market would shoot up. The massive supply increase of dollars (we're assuming these other countries are holding massive amounts of dollars) would lead to a large drop in value of the dollar - lots more dollars chasing the same amount of goods. Every purchase will become much more expensive for anyone still buying with dollars, including the American government trying to buy expensive military equipment - unless the US government also switches to using something else to purchase military supplies.
"How Italians have a general mistrust in the euro and the ECB makes me crazy.  The country with over 2000 billion in debt, that got its ass saved by quantitative easing done by the European Central Bank (iirc, 46% of bonds bought were of the Italian debt). No politicians says he wants to reduce the debt, no, the problem is again something ""outside"". How about reforming Italian banks and their infamous credits they're still not writing off as losses because of politics? How about reducing the debt?  How each and everyone who has a bank account in Italy isn't grateful to Draghi is a mystery to me.  The consequences of driving a G8 country, the 3rd largest economy in the EU, to the ground because of moronic politicians who can't for the love of their life plan long term are horrible.  It's not like the fucks given by politicians are hidden in this new currency system. FFS.  Quick edit: problem number 1, 2 and 3 of Italy is to reduce its debt. Il resto è noia, everything else is boredom."
About the inflation or low interest rates in both the countries is out of the equation especially since rupee is always a low currency compared to Euro. You cannot make profit in Euros using rupee or vice-versa. It all depends on where you want to use the money, in India or Europe? If you want use the money from fixed deposit in Europe, then buy fixed deposit in euros from Europe. If you want to use the money in India, then convert the euros and buy FD in India.
The free market will determine exchange rates.   But only sort of. If anyone leaves the euro expect and immediate mother-of-all-bank-runs. Then the new currency will begin to trade both officially and unofficially and eventually a market clearing price will be set. Whether that lands on an officially pegged rate or at a discount to that rate is a total crapshoot and not even worth trying to predict.
"While I would be very leery of making any Investments in Greece, and if I lived there might want to strongly consider a larger than average investment in 'international' funds (such as an index fund on the US, UK, or German exchanges) Having debt in Greece might not be such a bad thing... if only it was denominated in local currency. The big issue is that right now, you'd be taking out a loan on property in greece, that would be denominated in Euros.  If worse comes to worse, and Greece is kicked out of the EU and forced to go back to the drachma, then you might be in a situation where the bank says ""this loan is in Euros, we want payment in the same"" and if the drachma is plummeting vs the Euro, you could find your earning power (presuming you were then paid in drachma) greatly diminished.. And since you'd be selling the house for drachma, you might be way under-water in terms of the value of the house (due to currency exchange) vs what you owed. Now, if Greece were currently on the drachma, and you were talking about a mortgage in the same, I'd say go for it.  Since what tends to happen when a government has way overspent is they just print more money rather than default.. that tends to lead to inflation, and a falling currency value vs other countries.  None of which is bad for someone with a debt which would be rapidly shrinking due to the effect of inflation. but right now, safer to rent."