During these days the internet forums are a hive of depositors fearing for their savings. No wonder, when the unpaid insurance Friday we showed a risk of default by Spain of 20%. Indeed, today, following the agreement of European loans to PIIGS still listed Spain with a risk of default of 14%.
First, I must clarify that a country can not fail. You can not break because it is not a company goes bankrupt, default and disappear. A country still exist and function after reneging on a payment, so all you can do is suspend payments to then rearrange their schedule obligations. Something like removed and waiting for a bankrupt company. The country's debt may experience a remission of a percentage, but the country still operating. A few days ago the Greek bond to two years reached a high with a 38% annual interest. It was a great buying opportunity, because although Greece had suspended payments and would have raised a 30% off your debt, yet they made money. Obviously now is much higher, and the interest you pay is much lower. There are other possibilities for a country's debt default, as a postponement of the maturity of the bonds outstanding.
The first option is posed by any saver to protect your money is directly out of the bank and keep it "on the mattress." It seems a logical position, and that the cost of having money outside the bank is just the forgone interest, while keeping the risk assumed within the bank is reportedly the total loss. I really do not know if he has actually taken money from the bank believes its total loss really feasible. I think rather than what is feared is a hypothetical pen. If the yard was just a limitation of provisions in cash and foreign transfers would only be the loss of availability, but not capital. Another hypothesis that is abundant in some forums is that after the hypothetical back yard is the peseta and the devalued without offering the possibility of holding euros. An initial devaluation more than 20% seems excessive, so who actually take the savings in your mattress since 2006 and has been the devaluation "post-yard" in the form of bank interest forgone, that would amount to 4% to 17% .
Who get the money from the bank providing extreme scenarios should therefore consider extreme scenarios. First, there is a risk of fire, theft, rodents, etc. It is true that statistically are 20% lower risk of default risk in Spain, but it is also true that even putting in the worst case and the declaration of a default, it would possibly remove and / or deferral of payments, but in any case "disappear" bank money. It must also take into account client "Bancolchón" that the risk of your mattress is inversely proportional to its discretion. If we have not been mixed and have led the bank a large sum in cash, if the play has told a friend or a relative; Bancolchón danger of fire. And here are worth then claims to Bde.
On with the scenarios: it is Spain, leaving the euro, but German. Our euro is devalued in the bank or outside, only a weaker euro would be accompanied by higher inflation and interest rates also higher, making money outside the banking circuit at top speed would be devalued through inflation.
Has anyone thought about what to do with those paper euros if Spain left the euro? Probably many would actually consider making a trip to Europe and enter it there or change them. If, as we all know, even today, and Greece has banned cash transactions of more than 1,500 €, what would prevent Germany and France to prevent and cash transactions of dubious origin? Each entry should be accompanied by the transaction to which it belongs, and the rest of the paper money could very well serve only to warm his hands. Remember
when we changed our design notes for smaller ones peseta? Something could also make countries also remained on the euro, which the euro would only be Bancolchón colored paper.
The second option that many savers faced is to open an account outside of Spain. To clarify if this means less risk or not, bring the following graph:
If we open that account in a German bank, we see that a total unpaid debt of you would PIIGS German banks to 700,000 million dollars of loss. If we open one French, we see that a total unpaid debt of PIIGS opens to French banks a hole than 912,000 million dollars. Interestingly, in Spain the other PIIGS "only" 150,300 owed millions of dollars in debt, and also in turn owes them U.S. $ 89,400 million. Interestingly too, Spain has 1,300 million dollars Greek public debt, while Germany and France has 45,000 million 75,000 million dollars.
If despite the above we decided to open this regard we note that the Bank of Spain it could request information from European countries on the accounts opened by English citizens. Essential
handled with ease in the language of the country concerned, and of course take into account that for any dispute with the entity, we are forced to resort to the courts of that country. Suppose that one day we enter our online banking as usual and found amazed that our account has disappeared. Would not it be easy, quick and inexpensive to solve a problem on a nearby bench and not in a German? Beware
also
pages Internet that advertise offshore accounts. There are a lot of scammers among so-called intermediaries that facilitate the opening of offshore accounts in tax havens. More than one is going to lose everything because of his own fear.
order of popularity, the following strategy consists of buying fashionable German bonds. Now, with the 2-year German bond to 0.65% and 2.94% 10 years, future losses can say that are almost guaranteed. Monetization of debt will end in the form of inflation, and this in rate hike. The rate hike will bring down the price of old bonds, since the new offer a better rate, which buy now that the German government debt will lose money.
Easier to buy German bonds would buy an investment fund of public debt "safe" countries. In this case we could choose a background of very short-term debt, we do not produce any interest, but at least it would fall in price when interest rates go up. Unfortunately, it's hard to know the actual composition of a mutual fund. Usually the higher positions are posted, but it is in the lower positions where these assets are often concentrated more profitable for the fund, which are often not as solvent as the debt of French and German state we see at the top of your portfolio. It is difficult to know what is actually buying, and find out in time if the composition varies.
We have not mentioned the ultimate haven: gold. I wrote about the gold in gold never drops. I have no interest in buying a piece of yellow metal traded at $ 1,200 knowing that the cost of extraction, a little over $ 400, has barely risen, while gold has increased its price. If so listed at $ 600 could be an option to consider, but not the current price. The
introduced into the stock markets are the clear choice to convert their savings into stocks and shares. It is clear that there actions continue to default or not, with or without a yard, but we must be clear that equity is that, variable, and that the hypothetical 20% devaluation of the peseta hypothetical new, translated into stock market is a bad week , and it has proven far more real than hypothetical.
As these cyber creatures swarm of diverse cultures, there are some who see media like PayPal invulnerable shelter for their savings. There is much to navigate the Internet to find cases of people with money locked by PayPal, the whimsical powerless to impose bureaucracy like the company. Some lost a lot trying to preserve their savings. Decisions have to be taken coldly, not when the fear is the one who decides for us.
Finally, what I do: nothing. Just keep saving distributed among the most creditworthy entities (or less insolvent). If it gets dark black, the bag will quote him. And if so, when the default scenario was a reality and the blood was on the streets, buy shares.
0 comments:
Post a Comment