A rumour I heard three months ago; substantiated by industry activity six weeks ago is now coming to be reality.

Italy is now front of mind to 'do a Greece'.

But Italy is bigger than Greece, Portugal, Spain and Ireland put together.

Some basic numbers from today: -

Italian debt - 2,500,000,000,000Euros; it is 119% of GDP

Italy needs to repay 360,000,000,000Euros by the end of the year (rumour is that little debt has been repaid over the past two years).

26% of the 2.5trilliion needs to be refinanced in the next 18 months.

The economy shrank 5.2% in 2009 and only grew 1.3% in 2010.



There is not enough money in the system to bail them out - if Italy goes, Europe goes. And the US is more bankrupt than we are.

 

I have a plastic bag full of Euros and Cents. Should I spend them now or wait till December when I go to France on holiday?

Steve

 

Getting very silly now!

 

Why not scrap the currency?

 

****, here we go. Just the other day I noticed Italian yields were creeping up, and now the ten year is near 5.5%, just a week or so ago it was 4 something. How the hell do these things go unnoticed for so long though? I mean, what you've pointed out there is hardly a secret, yet it has been ignored?

 

The CEO of a global bank has built up a 500bn Euro warchest and has been warning of this some time.

Three months ago he said - look our for Italy within four months.

There is a belief that Italy may have been less than transparent with their financial situation!!

 

All that will happen is that the ecb will print the deficit up, destroying normal peoples savings in the process.

Spain after Italy, and then who? Belgium? Uk?

 

Kind of on topic: I can't believe Greece hasn't defaulted yet. It'd probably be better for them in the long run.

 

head in sand syndrome


same reason the NOTW executives did nothing -- as long as the fat monthly salary rolls in, why rock the boat

 

@ Trout - I know, I remember the thread you posted. Thing is, it's a bit difficult to make a decision without knowing the full implications and what the reaction to them is going to be. I'm in mostly defensive stocks... the others do not have a great deal of debt compared to others in the sectors they're in, which makes me inclined to just sit tight. A panic of everybody getting into cash I don't think is terribly helpful, as it's a bit self-fulfilling. Not criticising your post, as I appreciate it, but just throwing another slant on things.

If the worst comes to the worst, what are the policy decisions likely to be (UK govt)?

 

Guess where we're going in 2 weeks...

So should I hold off buying my Euros now or wait until the last minute and/or pack the anti-riot gear?

 

If the Euro does go bang, where does that leave our currency ?

 

I just got rid of my remaining equity a few days ago. Does that make me 'smart money' then Trout?

 

I'm kind of at a loss with what I should do about it...

What money I have is in investments which have a dynamic protfolio that includes european equity funds (as well as US, Asia, Japan and Uk etc ), which is a mix of defensive, cautious balanced and adventurous. Do I pull out of all but the defensive because of that.

And if I do, where do I put it. Under the bed? And could that be worse due to inflation?

 

Like I said, ALi, depends on the outcome really (money printing?). For the goal I have, another crash like 08/09 is not really going to affect me. It really depends what you're looking to do. If you need the money soon and want to preserve the principle, then I would say sell. But if not then why bother? IMO (and going by previous data over the last century) it's time in the market, not timing the market that's important for long-term savings.

So, if you're likely to need to money in the next few years then it's probably not a good idea to be in the market at all. If, on the other hand, it's part of a long-term savings plan, then it might not be such a big deal. Any further purchases (as part of that plan) at lower prices are going to average down, too.

 

Probably best to do nothing then since you seem to have a long term 'buy and hold' strategy. You should only change strategy for a reason IMHO.

Personally I'm trying to get enough cash for a house so that is very much in the foreground for me.

 

I dont get it, who is everybody in Hock to with all these loans that they can pay back now ?

Nobody in the normal world is doing anything that different, people still make stuff, sell it and provide services, the world keeps on turning, this is all numbers on computers !

 

In two weeks there could be a whole new currency in place of the Euro

 

That's kind of my thinking; I did nothing in 08/09 and if anything the returns have been better for it. Its all long term stuff, so hopefully things will be ok in the long run.

Bit like my Sky shares (just a few hundred quid); Probably not a good time to sell at the moment.

 

So you're in bed with Murdoch?

 

Agreed, but the people who own the computers are using it to make billions while we get poorer by the day.

We have been led to the brink of financial disaster by corrupt politicians.

 

For the time being at least

 

When a big bank moves into 500bn Euros of cash then whatever you and I do will have little impact on the already moribund markets. You are right I don't have an answer and take no criticism at all. The smart money is in cash is all.


Long term is relative - there are commentators talking of this being a ten year (long) event.

No more boom and bust.

It is now Booooooooooooooooooooooooooooooooom and

Buuuuuuuuuuuuuuuuuuusssssssssssssssttttttttttttttt tttttttttttttttttttttt!!!

 

The money the Governments are in hock to basically come in two forms.

Us and sovereign wealth funds.

Us through large corporates buying government bonds for our pension funds and savings policies.

Sovereign wealth funds like Qatar, China, Libya who need something to do to get a return on their surplus wealth.

And if those sources run out then the Government just print some more.

But it is a lot more than just numbers in computers.

 

Still dont get it, Green, Portugal and Ireland are all either f*cked or pretty much there, UK is a bit better off, but not by much, US is in Hock for Trillions, Italy about to go under by the sounds of it, so the Chinese and oil rich states hold all the money and we keep borrowing.

How do us and the Yanks have wealth funds if we have to keep borrowing ?

 

We don't!! Hence all of our problems!!!

A lot of the national debt is actually funded by us with our pension funds and savings.

 

I have just implemented my strategy. I have purchased £156m Euro lottery tickets and I am bound to win and make a profit of £10m and I will be set for the year!

 

you are trying to over analyse it

it is just a big confidence trick, the global money markets ceased to have any relevance to the underlying economics of countries years ago