If Italy Tanks, then...

rbaggio said:
I think the rioting seen in Greece will be nothing compared to Italy.
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Hopefully it doesnt come to that. But as an Italian, I can tell you one thing....
























...we beat the Greeks at EVERYTHING :lol:
 
Greece should just default on those bonds they can't pay for.

What's the point of having a standing army if you are going to allow your country to be pushed around by a bunch of fatties who think that money makes them untouchable?

In fact invite the big boys over to "talk" and they can get lynched by the "protesters". Two birds with one stone. You get rid of the creditors and you get to crack down on the protestors.
 
With the EU the way its going I think its only helping the USD, and hiding its problems. The Americans know they are in the shit, but are comforted by the fact that the Euros are looking worse. So the USD is madly being seen as a safe haven currency ( the best of the worste ) but once the EU situation is somewhat sorted, guess where the attnetion will be, back onto the ol USD.
 
opti said:
With the EU the way its going I think its only helping the USD, and hiding its problems. The Americans know they are in the shit, but are comforted by the fact that the Euros are looking worse. So the USD is madly being seen as a safe haven currency ( the best of the worste ) but once the EU situation is somewhat sorted, guess where the attnetion will be, back onto the ol USD.
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I dont think its that easy. I think i read somewhere that the CDS's are backed by US banks, the big ones, they are the only ones with enough mojo to underwrite something of this magnitude. If the greeks default ( and i mean a proper bright as day default) them US banks will need to fork the bill to the french & german banks. This will in essence transfer the problem from greece, to the US cause it will hurt the US banks. Im also not sure how big the payout is but it can't be the full amount backed meaning that the euro banks will loose money too. Greek defaulting is a loose loose for everyone.

They should have just let greece default without the initial bailout ... that would have just been a political issue about whether greece should still stay in the euro or not, it would not have become a political & financial issue ...
 
Thanks for the feedback, ive got more research to do!
Really like the idea of converting some AUD cash into US currency and banking it, so here's another question
If GFC 2 hits, and some Euro banks go under, the depositors would loose their money
HSBC is a Euro bank, and a massive one at that, is it ridiculous to think that it too could go under?
Sorry for all the questions, steep leaning curve moment!
Cheers
Alfie
 
pmstacker said:
opti said:
With the EU the way its going I think its only helping the USD, and hiding its problems. The Americans know they are in the shit, but are comforted by the fact that the Euros are looking worse. So the USD is madly being seen as a safe haven currency ( the best of the worste ) but once the EU situation is somewhat sorted, guess where the attnetion will be, back onto the ol USD.
Click to expand...


I dont think its that easy. I think i read somewhere that the CDS's are backed by US banks, the big ones, they are the only ones with enough mojo to underwrite something of this magnitude. If the greeks default ( and i mean a proper bright as day default) them US banks will need to fork the bill to the french & german banks. This will in essence transfer the problem from greece, to the US cause it will hurt the US banks. Im also not sure how big the payout is but it can't be the full amount backed meaning that the euro banks will loose money too. Greek defaulting is a loose loose for everyone.

They should have just let greece default without the initial bailout ... that would have just been a political issue about whether greece should still stay in the euro or not, it would not have become a political & financial issue ...
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CDS contracts covering Greek/Italian debt have been written by many banks, not just US ones. They are standardized contracts, governed by rules set out by ISDA (international swaps and derivatives association), which stipulate the kinds of "credit events" that will trigger the CDS payout. European CDS contracts (with eu political pressure) permit "Voluntary restructuring" - ie: if banks voluntarily take the 50% haircut, then the CDS isnt triggered. CDS issued over US companies/US govt have no restructuring provisions, so such action would not be possible in the USA. Thats why the Sarkozy/Merkel have been pressuring their banks to take "Voluntary" haricuts... so that CDS isnt triggered (not really voluntary if there is a gun to your head is it?)

Problem with this, is that all the protection the banks have to hedge their Greek/Italian exposure is effective worthless, meaning that the only way left to hedge bond exposures is to short the bonds themselves - exacerbating the problem facing the Greeks/Italians by driving their bond yields even higher.. Stupid politicians trying to meddle in markets - never works.. Markets punish the non-performers.. and a bunch of idiots with a soon to be worthless currency trying to stand in the way will get screwed themselves.

In short, EUR is F*cked in the medium term, and a short EUR strategy is quite a good idea. EUR rates are very low so shorting the currency wont cost very much.
 
jpanggy said:
HoskinsStreet said:
If I decide Italy is going under -

What should I do with Aussie dollars?

What should I do with my silver stack?

Do I buy US dollars with the above?
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Best case is to have a little of everything (etf, aud, usd, gold, silver, RE) if you have the cash to spare. If not, just keep it in cash in high yield account and do nothing with your cash.

If you are struggling or have very little breathing room, then cash is the best thing you can hold.
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I have only got a smallish stack of silver averaging at $33 an ounce, I think I will hold - just cash is tight so I don't think I should keep adding until after the euro tanks. I need flexibility right?
 
@HoskinsStreet

If I were in your shoe, yes. I will continue to build flexibility and liquidity, that being cash at this point in time.

I won't buy silver if I will be forced to sell in case I need more cash to pay unexpected expense (dental, accident, fines, pregnancy).
 
jpanggy said:
@HoskinsStreet

If I were in your shoe, yes. I will continue to build flexibility and liquidity, that being cash at this point in time.

I won't buy silver if I will be forced to sell in case I need more cash to pay unexpected expense (dental, accident, fines, pregnancy).
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thomas_beatie.jpg

Source: Internet
 
So what country is going to have the craziest riots? lol, me thinks Spain or italy

Oh and keep cash on hand, buying opportunities will come, its finally getting exciting woo!
 
So Silvio Berlusconi resigns and all is well in Italy all of a sudden.

Sure the Italians (and Greeks) now have a scapegoat to blame for their current situation and will claim that there will be no more financial issues to be had.

Current debt restructuring only deals with debts due and payable now. Most talk of lowering GDP ratios has only been talk with no specific timetable to reduce ongoing unsustainable spending. Watch how long any Party or Coalition lasts if they make a proper effort at implementing austerity measures. It wont be long before the next "Berlusconi" appears and is swept into power using the same populist methods and Ponzi accounting magic that is coming unstuck right now.
 
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