As Greece moves closer to a sovereign debt default, the issues raised by the following reader represents the concerns and fears of many of you.
This is a slightly abridged version of her question and the answer I sent her last Sunday morning:
“Hi Jill, I am a 30-something working woman and currently trying to save a deposit to buy a house.
“I’m pretty confused at the moment by all the speculation surrounding the euro and am aware that prominent financial advisors have been warning of a potential imminent collapse of the euro.
“I have heard several recommendations to buy gold or convert to safer currencies or German bonds and I can’t make head or tail of it all and am honestly very unsure of what way to turn.
“My savings are not extensive but are nevertheless very important to me and I want to safeguard them as much as possible.
“I have considered putting my savings into gold but don’t know how best to go about it. So what to do? I have even considered taking out a Canadian dollar bank draft – probably a bit crazy, I know!
Yours sincerely, a very confused Anne.”
I in turn replied to Anne: “You are quite right to be concerned about the sanctity of your savings if they are exclusively in euro (or any other fiat currency) especially because they are backed by governments that are in such dire economic straits.
“I’ve been saying (and writing) for my entire career that we should never leave all our savings, investments – our wealth generally – in a single asset.
“Too many of us, during the Celtic Bubble years, put everything we had and much more in the form of borrowings or ‘leverage’ – into property. Earlier some people (though not as many in Ireland) lost everything they had by borrowing money to buy dot.com shares.
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