Because USD aren't legal tender in the Eurozone, so you couldn't actually buy anything with them. You could change your euros into pounds and move to Britain, except your job, family, friends, and so forth are still back home (and once everyone gets that idea, it's not going to work for a million reasons).
Now if you're talking about people with investments in EUR who could switch that over to USD, well yeah, the exchange rate doesn't seem to have crashed. Hm, can you short a currency somehow?
Now if you're talking about people with investments in EUR who could switch that over to USD, well yeah, the exchange rate doesn't seem to have crashed.
With all the doom and gloom about the Euro, why hasn't it crashed against other currencies?
What effect would a breakup of the Euro zone actually have on the Euro?
Of course you will need Euros for day to day expenses. The idea would be to move your savings onto USD or GBP before the exchange rates spike and convert them back into $local_currency after things in europe settle down.
...can you short a currency somehow?
If you have the right brokerage account you can trade currency futures and options but be careful. Such trading is generally very leveraged and the possibility of losing all of your principle is very real(1) so be sure you understand the risks.
It's a lot easier to keep your money in a foreign currency these days. You could, say, put all your euros in a dollar denominated US bank account and then just use an ATM to convert only what you're about to spend back into euros.
Just a note: Short and leveraged ETFs are designed to match intraday movement and are poorly suited for long-term holding. It says as much on the website.
To wit: YTD EUR/USD is down .2% and that ETF is down 5%.
Yes, exactly what I'm getting at. That's the point of my parent...people should do it now BEFORE mass-inflation so that they can convert it to a more stable currency (USD/GBP/CAD).
I agree that once everyone starts doing it there isn't a point, but now...geezz..I don't see what you have to lose.
If you believe that currency market are somewhat efficient, the chances of a catastrophe happening are already priced in. For example, the Eur vs. Swiss Francs historically hovered around the 1,50 mark for a long time; now it's at 1,23. The swiss franc is considered clearly overvalued and there is speculation that their national bank wants to push it back up to 1,30.
Anyway if the Euro problems get solved, you would probably lose at least 10-15% of your assets. Of course maybe such an "insurance" is worth it, but it is by no means an easy decision.
Now if you're talking about people with investments in EUR who could switch that over to USD, well yeah, the exchange rate doesn't seem to have crashed. Hm, can you short a currency somehow?