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16 December 2011

5 Ways to Survive a Euro Crash

You may have heard recent mumblings about the possibility of the end of the Euro, that fantastically easy and convenient currency they invented just over ten years ago to help cross-border shopping (amongst other things).

The startling thing I’ve learnt is that if a collapse does come it would come very quickly. It could start by either a bank, or even a country, declaring themselves bankrupt. Because these are fragile times this then could start a dramatic knock-on effect that would destabilize the single currency. Bankrupt countries, potentially Greece and/or Italy as the situation stands, could either withdraw themselves from the euro or be kicked out altogether.

So yes, it could happen. Politicians have said that the currency’s collapse would be nothing short of “catastrophic”. Well why then have they not told us what to do in the event that the Euro DOES collapse? (Sigh) It’s a good thing I’m here, isn’t it?

Gertie's Guide to Surviving the Euro's Final Crash... (Should the worst happen!)
  1. Cash is King. If a country does decide to drop out of the Euro then the government would act to prevent a run on its currency (remember Mary Poppins when the little boy caused chaos at his father’s bank?). Banks would put a temporary ban on withdrawal of cash, and borders would be closed to stop you sneaking the stuff across to, say, Switzerland. Best to stock up in bundles of Sterling and US Dollars, and a small amount of Euros, all taped to the backs of hanging picture-frames. Also to be avoided are the Euro banknotes whose serial numbers start with Z, S, M and V (Greece, Italy, Portugal and Spain). X is best representing Germany, followed by U for France.

  2. Stock up on Supplies. All this talk about Quantitive Easing and governments' unflagging support for propping up failed banks means basically one thing - printing money. And printing money has in some notable historical situations led to hyper-inflation (think Germany between the two World Wars where little old ladies wheelbarrowed cash around to buy a loaf of bread). Hyper-inflation means that if it costs 99 cents to buy a tin of baked beans on Monday, that same tin of beans would cost 9.99€ by Thursday. Your 100€ banknote that you had in your wallet for emergencies would suddenly not go very far. Start stockpiling basic supplies now such as pasta, tinned veg and dried milk. Only stick to what you would realistically want to eat; there’s no point in having piles of SPAM if you can’t stomach the stuff (I on the other hand think “egg on SPAM” is one of our great forgotten culinary traditions). Failing that, you can always go out and secure yourself an allotment for home-grown veg (invest in a pair of gloves, an economic catastrophe is no excuse for grubby nails).

  3. The Midas touch. It’s the Indians who’ve got it right. The amount of gold wrapped around their necks, arms and ankles and pierced through their ears and nose means that they can sail through customs with their entire family fortune on their back and more without the border control so much as batting an eyelid. The price of gold may be going up, but think of the security (and the bling).

  4. Location, location, location. I happened to be sitting next to a Wealth Management banker at lunch the other day and he advised that property, but only in extremely desirable locations, is also a popular choice to safely invest your money. We’re not talking about homes in the desert here. We’re talking desirable London and places that never seem to go out of fashion with the wealthy. Monaco anyone?

  5. A place in the sun. Book that package holiday now! With all the uncertainty over the future of some countries, people are holding back from planning their vacations. But now is precisely the time to book a bargain. Hey, just because you may end up paying for your oozo in drachmas rather than the euro, doesn’t mean the sun will stop shining. Yiamas!


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