Another Way to Protect the Euro

There are billions of euros on the bank accounts in the European Union. For three years, as the death of the euro is often being announced, it would be irrational not to care and the question is what to do in that case.

perperzona856euroThe resolving of the problem should be initiated by turning away from pretentious lecturing about the certainty of the process, since these made-up certainties in the economic and financial field are more generally the imitation in any matter within the human factor. There are no more financial laws in the sense that the term “law” is in the field of exact sciences than they exist in the economic or historical. As one of the possible positions and currencies, in a suspicious and not pure assumption, there is a distinction that all this should refer to, as it seems. In an ideal world, a money-defense, or hedge lies at the convergence of two lines of thought. For example, several months ago financial experts have been recommending an investment in one of the Scandinavian crowns, on the grounds that the euro seemed hopeless and that it seemed rational to look for a safe haven. Today, none of those positions have been reported.

Regardless how prosaic it might seem, in my honest opinion there should be a venture in the Chinese currency, the Yuan, first of all because of the difficulties of the euro, but also of the undervaluation of the Yuan, combined with the Chinese authorities’ aspiration to internationalize its currency gradually. After the period of six months, the investment that was reported is 15%, so in case one puts 100,000 euros, one gets 115,000 back, which is well enough for a self-protective investment. In times of crisis, a self-protective money market investment seems to meet a variety of conditions. For example, it should be provided for examination of the trade press, but should not be limited, reassembling as high as possible, as the source of the underlying economic and financial information. There should be understood that it is not required to be an insider to achieve smart placement, since the public information is sufficient in this case, but it takes time to collect all necessary data. These data should be integrated into an overall understanding and flow. The action should be taken only when there is identified a possible placement that lies on both previously mentioned arguments – difficulties of the euro and objections of Chinese authorities.

Then, there should be distinguished bank risk and currency risk, because a good investment of money in a failing bank one does not earn much. Lastly, there is a need to state in advance a threshold outside which the possessions will be sold automatically. Since these ideas came inspired by the advices given by Warren Buffet to be applied to the economy of the United States, it seems that in times of questioning the further existence of the European currency it is the EU that is the priority.

Posted in ENG

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