The what if's that maybe

engworldcup66

Anyone out there wise enough to know what happens if we have lengthy lock downs and crash spectacularly out of Europe? What happens and what can be done to come out of it the least damaged? I would assume we all know we are in uncharted territory where anything can happen so what if we do get everything crashing what happens? I know it's most common to say no one can predict etc.
I will though ask - What happens if the pound crashes? what would be the things that happen? it has happened in other countries where the currency crashed and money was used for fires it was just useless. Is it really a case of you have savings you lose them until the new currency comes in then we start again from scratch? I mean look at what is happening it's just unheard of and no one wants to talk about it. It's almost like we are all in denial. 
I can't get my head around what would happen if the pound crashed. Say you have £5,000 then crash so your money is worth nothing. What happens in that interim period? Presumably if you have a job you stay employed but what do they pay you with and when it's all back again is it as simple as tough luck it crashed we re set and now you start from scratch? 
Anyone?

dunstonh

 What happens and what can be done to come out of it the least damaged?

Same as usual. Diversification.

I would assume we all know we are in uncharted territory where anything can happen

How is that different to any other period?    

I will though ask - What happens if the pound crashes? 

In the isolation of other factors, your global equity holdings will increase in value.  Some UK large cap holdings will as well.   

it has happened in other countries where the currency crashed and money was used for fires it was just useless.

I wouldn't go worrying about that.   

 I mean look at what is happening it's just unheard of and no one wants to talk about it. It's almost like we are all in denial. 

What do you think is happening and why do you think we are in denial?  What are we denying?

I can't get my head around what would happen if the pound crashed. Say you have £5,000 then crash so your money is worth nothing. 

Why would it crash to nothing?

I think you are getting to excited on scenarios that are not going to happen.

engworldcup66

"How is that different to any other period?"

When did we last leave Europe in a bad way whilst having a global pandemic?
Last pandemic of this magnitude was 100 years ago. and we were not leaving Europe at same time.

"In the isolation of other factors, your global equity holdings will increase in value.  Some UK large cap holdings will as well."

A lot of people just have savings only.  

"What do you think is happening and why do you think we are in denial?  What are we denying?"

No one I talk to will entertain anything bad is going to happen or even close to bad. No where online even comes close to discussing situations like crashes where pound collapses etc. Not even close.



I admit I am no expert or even knowledgeable over this so asking for advice.
It would seem to me though that having had a lock down which caused major damage to economy and now it looks like we are having another that it is going to be catastrophic.
At same time we are leaving Europe and breaking a deal with most probably Joe Biden as American president for one who will not want to trade with us.
Surely things are just going to crash as we are also printing money and pumping other money into furlough when business are going to close now because of 2nd likely lock down.  
Denial as no one will accept that things could go super wrong.
Also what if someone just had savings of £5,000 nothing to diversify do they just lose their money? 

What would happen if pound crashes?

What can you do to help save yourself other than stock market diversification? 

I am not excited at all by this either.

dunstonh

"How is that different to any other period?"
When did we last leave Europe in a bad way whilst having a global pandemic?
Last pandemic of this magnitude was 100 years ago. and we were not leaving Europe at same time.

The events are different but every generation has something going on that did not happen before (or has been a long time between them.    Although maybe not that different. The 1957 pandemic killed 20,000.  You had the suez crisis at the same time.  The 1968 pandemic killed 30,000 and came just after Harold Wilson devalued the pound.  Relative to population, the death figures are larger than the CV today.

No one I talk to will entertain anything bad is going to happen or even close to bad. No where online even comes close to discussing situations like crashes where pound collapses etc. Not even close.

That is because we are not in that situation.  

It would seem to me though that having had a lock down which caused major damage to economy and now it looks like we are having another that it is going to be catastrophic.

How old are you?  I may help us understand what your experiences are.     How do you think previous generations got through the world wars, devaluation, the oil crisis, the three day week, the basket case economy of the UK  in the mid 70s,  the recession that followed in the early Thatcher years and the economy was reblanced and public finances put in order,  The 90s recession , the credit crunch etc? (plus the many many smaller but still significant events that occurred in between).

Financial crisis happen on average every 7 years.

At same time we are leaving Europe and breaking a deal with most probably Joe Biden as American president for one who will not want to trade with us.

We are not leaving Europe.  We have left the EU.   Joe Biden doesn't get to decide if people and companies in the US trade with the UK or not.     There is no trade deal with the US whilst we were in the EU and there wont be one when we leave the EU until one is eventually put in place.   So, that is status quo.

Surely things are just going to crash as we are also printing money and pumping other money into furlough when business are going to close now because of 2nd likely lock down.  

What is your definition of crash?  You come across as if you think it is armagedden.  

Denial as no one will accept that things could go super wrong.

Life goes on.     There are plenty of solutions. Many of them will be uncomfortable for some. Many will be uncomfortable for some in the distant future.

Also what if someone just had savings of £5,000 nothing to diversify do they just lose their money? 

They wont really notice it gone then will they as £5k is insignificant in the scheme of things.

What would happen if pound crashes?

What is your definition of crash?

What can you do to help save yourself other than stock market diversification? 

tin foil hat?

I am not excited at all by this either.

I'm guessing you are relatively young and have not gained the life experiences to realise that it is just another event in a string events that occur.  Each one different but causing some in society to suffer more than others but we carry on.

RG2015

There is some merit in both sides of this debate.

What is unprecedented is not the Covid 19 pandemic, but the response. The cost of lockdown(s), furlough, business failures, possible city centre demises, unemployment etc. cannot be comprehended.

The scale is so immense that a market crash dwarfing the 1930s cannot be dismissed out of hand.

On the other hand, it may never happen.

I guess I would worry if my IFA said he agreed that we were all doomed. 

Malthusian

What can you do to help save yourself other than stock market diversification?

Your expressed fear is that the UK economy goes tits up, so as far as long term investment goes, diversification, i.e. not investing in the UK solves all your problems. (Or even just avoiding the UK FTSE 250 as the FTSE 100 gets most of its revenue from outside the UK.)
Your thread is like saying "I'm scared of travelling by plane" and when someone says "So take the train" replying "Yeah even if I take the train there could still be a plane crash, so what can I do to help save myself other than taking the train".

What you are actually scared of is the market going up and down, which you are then trying to make tangible by associating volaility with UK-specific bugaboos, even though only a tiny sliver of global stockmarket volatility has anything to do with Brexit or how the UK copes with the effects and aftereffects of the lockdown meme.

Peter314

https://giphy.com/gifs/xBqg5gAf1xINizpek6/html5

Sebo027

RG2015 said:

There is some merit in both sides of this debate.

What is unprecedented is not the Covid 19 pandemic, but the response. The cost of lockdown(s), furlough, business failures, possible city centre demises, unemployment etc. cannot be comprehended.

The scale is so immense that a market crash dwarfing the 1930s cannot be dismissed out of hand.

On the other hand, it may never happen.

I guess I would worry if my IFA said he agreed that we were all doomed. 

Quote:

Unemployment Rate in the United Kingdom averaged 6.91 percent from 1971 until 2020, reaching an all time high of 12 percent in February of 1984 and a record low of 3.40 percent in November of 1973.

Source: https://tradingeconomics.com/united-kingdom/unemployment-rate

It is currently quoted at somewhere between 4.1 and 4.9%. It was around 8% following the 2008 crash. While we can't predict the future it is possibly settling to dig deeper than what you read in the tabloids and "online news" outlets. Even "trading insight" styled media outlets (seeking alpha, motley fool etc.) will ramp up the drama. 

This is a good read, perhaps to give some insight: 
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/september2020
I quote the main points from the article below:

Early indicators for August 2020 suggest that the number of employees in the UK on payrolls was down around 695,000 compared with March 2020.

Figures for May to July 2020 show an increase in the unemployment rate; despite this increase and an increase in the number of redundancies, the employment rate was up and the economic inactivity rate has fallen.

Over the quarter, there has been a large decrease in the number of young people in employment, while unemployment for young people has increased.

While redundancies were still historically low, both the quarterly and annual changes are the largest seen since 2009.

The number of people who are estimated to be temporarily away from work (including furloughed workers) has fallen, but it was still more than 5 million in July 2020, with over 2.5 million of these being away for three months or more. There were also around 250,000 people away from work because of the pandemic and receiving no pay in July 2020.

Total hours worked was still low but showed some signs of recovery in the three months to July 2020.

Vacancies continued to show increases in the latest period, driven by the smaller businesses, some of which are reporting taking on additional staff to meet coronavirus (COVID-19) guidelines.

The Claimant Count reached 2.7 million in August 2020, an increase of 120.8% since March 2020.

The rate of decline in employee pay growth slowed in July following strong falls in the previous three months. For the sectors of wholesaling, retailing, hotels and restaurants and construction, where the highest percentage of employees returned to work from furlough, there was a slight improvement in pay growth for July 2020.

• May to July figures show an increase in the unemployment rate; despite this increase and an increase in the number of redundancies, the employment rate is still not falling.

• Though still large, the reductions in total hours worked both on the year and the quarter are smaller than last month, with the May to July period covering a time when some of the coronavirus (COVID-19) lockdown measures started to be eased.

• Early estimates for August 2020 from Pay As You Earn (PAYE) Real Time Information (RTI) indicate that the number of payroll employees fell by 2.4% (695,000) compared with March 2020.

• The Claimant Count increased in August 2020, reaching 2.7 million; this includes both those working with low income or hours and those who are not working.

• Vacancies in the UK in June to August 2020 were at an estimated 434,000; this is almost 30% higher than the record low in April to June 2020.

• The rate of decline in employee pay growth slowed in July following strong falls in the previous three months; growth has been affected by lower pay for furloughed employees and reduced bonuses; with some employees returning to work, nominal regular pay growth is back positive for May to July 2020 after being negative in the three months to June 2020.

As for the "possible demise of the city centres" you could perhaps rephrase that to read "possible resurgence of marginalized communities, and with it the high street and local economy." 

engworldcup66

I think that losing £5,000 would be a catastrophe. I am also unable to place money in the stock market. I am as I have eluded to no expert so please try not to keep quoting me if possible. I am just someone saying some pretty unique things are happening. Last year I may have come here and said what if there is a global pandemic and we are doing a no deal brexit in a strange way etc. No one would have thought it possible yet here we are.

I am just trying to get to understand what happens to a country when there is a huge crash. I have tried looking at history but they never say what happens to the average person. How can we possibly be doing ok with businesses shutting etc. People staying at home not spending but saving whilst government prints more money. What about deflation then inflation etc. No one able to pay off loans. Pound crashing etc.   

Say it crashes what happens to you while you are working. As the pound is worthless what do you get paid. What will happen to benefits.

Is it as harsh as you lose your savings and then start from scratch again?

cloud_dog

I think what you may be missing is that most of the things are not 'unique', as you put it, and so people are trying to put some context around your paranoia, sorry, concerns.

Voyager2002

engworldcup66 said:

I think that losing £5,000 would be a catastrophe. I am also unable to place money in the stock market. I am as I have eluded to no expert so please try not to keep quoting me if possible. I am just someone saying some pretty unique things are happening. Last year I may have come here and said what if there is a global pandemic and we are doing a no deal brexit in a strange way etc. No one would have thought it possible yet here we are.

I am just trying to get to understand what happens to a country when there is a huge crash. I have tried looking at history but they never say what happens to the average person. How can we possibly be doing ok with businesses shutting etc. People staying at home not spending but saving whilst government prints more money. What about deflation then inflation etc. No one able to pay off loans. Pound crashing etc.   

Say it crashes what happens to you while you are working. As the pound is worthless what do you get paid. What will happen to benefits.

Is it as harsh as you lose your savings and then start from scratch again?

Most of us experience things that are far worse than the loss of £5,000.

Anyway, there is plenty of history about what happens to ordinary people when currency loses most of its value. Read about Germany before the rise of Hitler, for example. Or the final days of the Soviet Union (not that Soviet roubles were ever worth very much...). Or Zimbabwe at more or less any time over the last twenty years.

Thankfully, it is very easy for us to invest our savings in shares of companies around the world (outside the UK), meaning that our savings would not be affected by a crash in sterling.