Financial Fate - Are you in control or being controlled?

Generali

Dithering_Dad wrote: »

The £ is trading at 1.484 to the dollar and 1.1746 to the Euro. It'll be interesting to see where these currencies are in 6/12 months time

Well the USians have a lot of foreign investments and I reckon plenty of that cash will be repatriated causing the $ to continue to rise. Also, the $ is still seen as a safe haven.

The EUR is more interesting. There is a very real political risk surrounding the euro that just doesn't exist for most currencies. The French tried to keep the franc at a high level for many years as a matter of political pride (the Franc Fort policy). The Deutschmark was strong as the German government was very sensible and inflation was pathalogically avoided. On the other hand, the Italian lira and Spanish peseta were slowly allowed to depreciate to maintain the competitiveness of their relatively inefficient industry.

Come a recession, those two desires will come into conflict, possibly fatally so for the EUR. I have my doubts as to whether the euro could survive Italy or Spain withdrawing. I reckon that the merest hint of instability will have the Germans heading for the exit and without Germany the Euro is finished.

purch

without Germany the Euro is finished.

Maybe the U.K. should join up with Spain, Italy, France and Greece and create our own currency............."The Freefall"

plenty of that cash will be repatriated causing the $ to continue to rise

Which must be driving "Helicopter" Ben to distraction, even with the chance of the Fed target going to 0% he can't get the USD to devalue.

JonnyBravo

Generali wrote: »

I reckon that the merest hint of instability will have the Germans heading for the exit and without Germany the Euro is finished.

I really just can't see this happening at all.
Germany is far too Euro-centric to pull this.
IMO.

Generali

JonnyBravo wrote: »

I really just can't see this happening at all.
Germany is far too Euro-centric to pull this.
IMO.

What you say is true. There is also a very strong folk memory that is terrified of inflation. Who knows which is the stronger? My guess is that younger Germans don't feel the same need to be locked into Europe as the older ones did.

lostinrates

Generali wrote: »

Investing with hindsight is so much easier!

My opinion is that the pound has a lot further to fall as the assumptions on public borrowing that the Treasury are working on are very optimistic. I realise that they come out of the economic model that they use but I just don't see it.

Business has been largely starved of credit for the best part of a year. Unemployment must be about to fly upwards and with it the tax take fall and welfare bills rise.

I, sadly, follow this line of thought too.

My reasoning is less...tidy and well informed though.

My feeling is a stable situation has very slightly more good news than bad news, a good market lots more good news, a falling situation more bad news, to rise we need LOTS of good news. Simple and possibly inaccurate reasoning.:o

purch

I really just can't see this happening at all.
Germany is far too Euro-centric to pull this.
IMO.

I agree that it won't happen without a fight ...... but faced with an economic disaster, or collapsing currency they could easily be forced into reverting to the DEM, whatever the political cost.

Gorgeous_George

I feel in control of my financial situation.

I have a mortgage costng about a third of my income but Mrs GG earns almost the same as me. The BTL provides that bit extra. I spend quite a bit on holdays as I like to live as well as save for the future. With 4 weeks of timeshare, my holidays are sorted for the rest of my life. Sat around the pool right now and it's lovely.

I moved most of my savings into fixed rates at 6% and I plan for what I expect will happen. I will consider moving to a fixed rate morgage over the next few months as rates are likely to rise again later next year IMHO.

GG

robin_banks

In control.

Stable job, reasonable salary, renting, more than adequate savings.

Mr_Matey

I spent some time in financial planning and it's amazing how much of a difference re-organising someone's finances to suit their situation can make. A lot of those who feel at the carriage is out of control just don't know how to take the reins.

There are things we can control and things we can't, so it's down to good management and luck. Not smoking, for example, can reduce your chance of cancer but not to zero!

I feel very much in control of my future right now, however there are always unexpected events. The reason I feel secure now is because I; invested time and effort studying to gain a good qualification, have a secure job (they do exist), have looked after my personal finances and physical health, and have a loving partner and family. Also my partner has recently started working so we're saving heaps.

I'm debt and dependent free with a bit of dosh saved, so if I wanted I could quit my job and travel or move back to my old job in Aus.

So long as I don't get hit by one of those big red buses...

Kez100

In the 1990's we wanted to move. We had our place valued and realised we had something called negative equity. We thought soemthing along the lines of 'b***y typical' we had better save our way out of it and did, quite calmly.

This time I'm sat with 15% LTV at peak and I am scared stiff! I am sure it's due to doom mongers on here (and I am sure reading that will give them all an adrenaline rush).

I did spend some time with a very learned guy a few weeks ago who said - what FTSE at the level of post 9/11? So what? House prices falling? Far too high, bring it on. Growth falling by a few percent? So what, growth went up for years and years by double that. Dollar at $1.50 - same as I got in 1990's when I went to the USA and everyone kept telling me it was good.

Whilst he may be a bit too positive (after all the Government aren't panicing over nothing) there has to be a happy medium. I think spending too long on here doesn't help at all.