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Lately, I'm hearing a lot of talk about the euro's impending demise (I don't know how true that is by the way). And it's making me a little bit worried about my savings.

I don't have a lot of savings, and I don't earn a lot of money. But still I would like to ensure it's safety (because it would still be catastrophic to me to lose my savings, even though some wouldn't think it's a lot). Would it be smart for me to move such savings to another currency?

I'm asking this, because obviously there is a risk in moving my savings to a different currency (fluctuation of the value), and there are transaction costs (which are high compared to my total amount of savings).

But if something were to happen to the euro, this could save me a lot of money and ensure my financial safety. So my question is; what would you advise, how do I weigh the risks/benefits and should I be worried about the future of the euro? Or is transferring money to a different currency only something that's useful to investors and people with vast amounts of money?

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There's no need to move it to a different currency, but if your bank is in Portugal, Ireland, Italy, Spain or Greece, you might consider moving it to a different Eurozone country. Finland, Austria, Germany or the Netherlands seem safest at present. There's a small risk of a forcible Eurozone exit followed by redenomination of bank deposits into a new currency that will immediately collapse.

  • Right, well it's in the Netherlands right now, so that's not a problem. But isn't there also a risk in the euro losing its value (which if it would occur, would affect all countries)? – user6973 Aug 14 '12 at 12:03
  • Are you planning to spend this money in the Eurozone or elsewhere? If you plan to spend it in the Eurozone, why do you care what may happen to the value of the Euro compared with other countries? But in any case, if one or more of the weaker members are forced out the Euro is more likely to appreciate than depreciate against other currencies. – Mike Scott Aug 14 '12 at 14:46
  • @MikeScott: what makes you think that Euro would most likely appreciate in case weaker members are forced out?! Overseas investors would not like to be stuck with their investments into a currency that one day might exist and another day might not, they would run into panic selling of whatever is denominated in Euro, and the Euro currency would suddenly be worth nothing! – Marco Demaio Aug 17 '12 at 16:55
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On contrary of what Mike Scott suggested, I think in case of EURO DOOM it's a lot safer if your savings were changed into another currency in advance.

Beware that bringing your money into an EURO CORE country (like Finland, Austria, Germany, Nethereland) it's useful if you think those banks are safer, but totally useless to avoid the conversion of your saving from Euro into your national currency.

In case of EURO CRASH, only the Central Bank will decide what happens to ALL the Euro deposited wherever, single banks, even if they are Deutsche Bank or BNP or ING, can not decide what to do on their own.

ECB (European Central Bank) might decide to convert EURO into local currencies based on the account's owner nationality. Therefor if you are Greek and you moved your saving in a German bank, the ECB might decide that your Euro are converted into New Dracma even if they sit in a German bank account.

The funniest thing is that if you ask to a Finland bank: "In case of Euro crash, would you convert my Euro into New Dracma?", they sure would answer "No, we can't!", which is true, they can not because it's only the ECB (Europe Central Bank) the one that decides how an ordered Euro crash has to be manged, and the ECB might decide as I explained you above.

Other Central Banks (Swiss, FED, etc.) would only follow the decisions of the ECB.

Moreover in case of EURO DOOM, it's highly probable that the Euro currency looses a tremendous value compared to other currencies, the loss would be huge in case the Euro Crash happens in a disordered way (i.e. a strong country like Germany and their banks decides to get out and they start printing their own money w/o listening to the ECB anymore). So even if your saving are in Euro in Germany they would loose so much value (compared to other currencies) that you will regreat forever not to have converted them into another currency when you had the time to do it.

Couple of advises:

1) If you want to change you savings into another currency you don't need to bring them into another bank/country (like US), you could simply buy US Shares/Bonds at your local bank. Shares/Bonds of a US company/US gov will always be worth their value in dollars no matter in what new pathetic currency your account will be converted.

2) But is there a drawback in converting my saving into another currency (i.e. buying dollars in the form of US treasury bonds)? Unfortunately yes, the drawback is that in case this Euro drama comes finally to an happy ending and Germans decide to open their wallets for the nth time to save the currency, the Euro might suddenly increase its value compared to other currencies, therefor if you changed your saving into another currency you might loose money (i.e. US dollars looses value against the Euro).

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