Safest Currency?

Generali

Wookster wrote: »

Its a tough call to say which is the smellier turd out of the Sterling, US$ and Euro.

They all have (significant) risks.

The Euro has a political risk attached which is much bigger than the other two.

What do you think is more likely: France leaving the Euro, Scotland leaving the UK or California leaving the US?

Cannon_Fodder

Generali wrote: »

or California leaving the US?

well, the San Andreas fault does have its moments...

indianropetrick

If this happens:

http://market-ticker.denninger.net/archives/852-Whats-Dead-Short-Answer-All-Of-It.html

which is very plausible, then gold will be the only option.:eek:

Degenerate

indianropetrick wrote: »

If this happens:

http://market-ticker.denninger.net/archives/852-Whats-Dead-Short-Answer-All-Of-It.html

which is very plausible, then gold will be the only option.:eek:

Good luck eating those bullion bars.

purch

The bad news is that you won't have a job, pension, annuity, Social Security, Medicare, Medicaid and, quite possibly, your life

No need to buy Gold then !!!!

Generali

Cannon_Fodder wrote: »

well, the San Andreas fault does have its moments...

I'm not sure they include California becoming some sort of westerly New Zealand! You never know I suppose ;-).

Wookster

Generali wrote: »

The Euro has a political risk attached which is much bigger than the other two.

What do you think is more likely: France leaving the Euro, Scotland leaving the UK or California leaving the US?

I would agree with that, however the US & UK have major risks as well chiefly being around both countries massive trade deficits which will need correction at some point...

How much longer do you think these trade deficits can be sustained?

purch

What do you think is more likely: France leaving the Euro

Or maybe the other way around. :T

purch

How much longer do you think these trade deficits can be sustained?

At least until the "Apocalypse" is upon us......


...which by the sound of that website the loony was linking to will be around about 4.30 this afternoon (GMT not EST !!!)

Generali

Wookster wrote: »

I would agree with that, however the US & UK have major risks as well chiefly being around both countries massive trade deficits which will need correction at some point...

How much longer do you think these trade deficits can be sustained?

Not much longer. Ironically, the big budget deficits both countries are running may allow trade deficits to continue for a while longer as the foreign currency required to sustain them will be raised as a by-product of the massive sales of Gilts to foreigners.

That trade relies on credit means that countries with big trade deficits will be forced to import less at some point - basically that will be when China stops lending people money to buy from her. That moment is very close as unemployment rises.

Ultimately, trade has to come into balance (as you say) as you can no more finance a trade deficit indefinitely than you can a budget deficit or even a household one (aka spending more than you earn).

I still think that the Euro is the riskier of the three reserve currencies mentioned as there is a big political dimension. Italy has been steadily devaluing since the 1950s to remain competitive, Germany is a strong believer in a strong currency. It's just not possible to reconcile those policies.