What Would a Euro Collapse Mean for Investors?

August 13, 2012

Germany‘s largest news magazine has just published an important story on what is seen as the impending collapse of the euro.

Investors need to examine what this means for their portfolio.

First of all, you should not assume that because the euro is a European currency that the side effects of its collapse would be limited to Europe. In today’s globalized, interconnected world, finance moves literally at the speed of light. What happens 10,000 miles away may as well be next door.

As we have seen in the periodic flare ups of the ongoing economic and financial crisis in Europe, the initial beneficiary of weakness in the euro has been the US dollar. Should the euro collapse, the initial reaction would probably be similar. But this would be short-lived for two reasons:

1. Historically, currency crises benefit gold, which is a counterweight to the US dollar.

2. Those who flee the euro for the dollar will soon realize that the systemic and fundamental debt problems that have led to the euro’s demise also exist in the US–only worse. As a result, investors need to find alternative safe havens.

There is no silver lining for this cloud in terms of world stock markets. A collapse of the euro would send shockwaves across the oceans.

This is all the more reason why investors should seek to accumulate gold investments now, before a euro collapse.



The Contagion Set to Hit Germany–Hard

July 24, 2012

Germany is viewed as the bulwark for European economic health. While the rest of Europe, particularly Greece, Spain, Italy, Portugal and Ireland, has set the continent on a path to ruin through irresponsible welfare state policies, Germany has largely been viewed as the one responsible nation in the European Union.

Unfortunately, with that responsibility comes a heavy burden. Germany is increasingly being asked to provide the bailout money in the vain attempts to fix what ails Europe. Now, international investment and credit rating firms are beginning to see the impact of that burden. Not even Germany can carry all of Europe’s load by itself.

And, as a result, Moody’s Investor Services has changed its outlook for Germany to “negative,” the first step toward a credit downgrade. This is not to be taken lightly. AAA-rated investment nations are dropping like flies because they are in the uncomfortable position of having to save their irresponsible neighbors.

This situation is unsustainable and will eventually result in an unprecedented financial and economic crisis for which investors must be prepared.

Historically, gold investments have provided the most effective safe haven for investors in times of crisis. Today’s investors have the benefit of being able to act pro-actively and to begin accumulating gold investments before the crisis reaches a dangerous peak. Contact CoinTrader and find out more about the various alternatives available to gold investors.