What happens in case of an actual EURO-doomsday?

Trading Discussion
1

Last weels drastic measure and the subsequent pulldown for the euro across all pairs shows europe aint really climbing out of it yet imo. It wasnt a 2008 level reaction (only about 150 pips on eurjpy in one day i think) but it got me thinking.
And this is a question only someone with a serious academic background AND years of experience might be able to answer.

What happens if, let’s say greece, italy, ireland , portugal AND france decide to frexit, the brits decide to exit the union and well, lets say they join forces with norway and switzerland, subsequently germany, as a powerhouse joins the ‘new bloc’ as well and the euro breaks.

?

In terms of daily life from what i hear about greece at its darkest moment what would have happened first is a total lockdown of all banks so people couldnt run to the dollar right before (which would actually hasten the process) and they would in fact be left with half their money’s worth of money after being back on the drachme.

Now, this is something i read at a time when they were pulling rabbits out of the hat, taxing everyone who would have like anything that even a small business owner could easily gather if business goes well as if they were all mafiosi. It didnt touch me since im more or less poor compared to most people. I have no way of proving this with numbers or facts, i have no reason to disbelief the author either.

BUT, however, to the delayed point. This would only afftect people living in europe, normal people, hoarders who have savings stuck in fiat Euro.
Now what what would hit all around the world is forex? What happens to open positions containing the euro ?

For instance i had a long position on eur/jpy at the moment of mister Draghi’s latest intervention and that obviously didnt go well. Now, since all pdf’s by major players i can find for september still put the euro at 140-141 by the very last next year (vs. yen) i can hedge it with a short if need be (i dont know if every broker allows that, thats not the issue here just say money locked is not necessarily money lost)

But, im left with the question of the ultimate scenario. What would happen to forex tradex containing the euro? Whats the contingency in case of the unthinkable happening? Is there a contingency other than to avoid trading any pair containing euro until its clear that its consolidated ?

very much obliged if people who know what they talk about would take the time to answer this

thanks in advance

J

2

Maybe sell until it reverses?

3

I think it would be a field day for most of the people who could buy the Euro. It would drop to pretty much nill, then bounch back up later.

4

It should be interesting to see the different course of events that may take place in case the Euro disappears

5

well, in fact i did and ended the day with a plus but my concern (not that i think it will happen anytime soon for real given mario draghi’s commitment to saving it at any cost as well as the huge consequence for about everyone living in europe).
I was just wondering what would happen if the euro would completely break up to forex trades containing the euro in the pair.
It’s like, how should i phrase this…
i dont know of any other currency talked about as if it could actually disappear, back into the respective currencies where it came from. I know it probably sounds more like science fiction but i never heard or read anything about a ‘dollar breakup’ whereas in the past years i have heard several times, too many times to my liking about 'the possibility of a euro-breakup’
Whatever it would be it would be disastrous. They can hardly just ‘flip’ the trades to FFR/USD or BFR/USD OR DM/USD overnight. Everything would be on lockdown or just disappear. I think, personally, the scenario is so horrid nobody ever actually gave thought to a contingency plan as to what forex brokers would do if the unthinkable happened. Separatism rises high, the last EU elections showed that and i dont know the mastodon of the EU-bureaucratic machine is taking the signs seriously. Im almost afraid the americans will have to come save us from the nationalists here like they had to do in the 40s, like they have been coerced into intervening in iraq against reliqious fanaticism (which is at base level not that different)
But what would a fx-broker have to do if the euro were to just disappear for lack of support IF (its still a big if) all anti-EU parties grow so much in power that it becomes an actual possibility
its more than just scary