Hi :8:
I would like an answer, what happens with your account money in EUR deposited at broker, if € hypothetical bankrupt. Do you lose it, or will be changed to another currency automatically?:45:
Thx for any answer.
Kind regards.
If a currency defaults, the account will probably transferred to a currency which substitutes the old currency. Usually not for a 1:1 rate, though. 
Hello.
This is a JOLLY good question is it not??? I’m assuming that the thread starter is referring to the ‘collapse’ of the EURO or the EURO becoming ‘obsolete’ (not sure of what word to use here). I don’t have the answer to be honest but it would be interesting to find out what the correct answer is (NOT that I’m saying that you’re wrong Mr. Gecko but I wonder what the practicalities are)???
Well: here’s some ‘food for thought’ (just ‘taking one step back’ here). What would happen if a country elected to leave the Eurozone (as they are now, per Ms. Merkel, quite entitled to do). Greece is a fine example at the moment. How would the value of the Greek Drachma be calculated if they decided to leave the Eurozone???
From a broker point of view: take Deltastock as an example. Bulgaria uses EURO as well as BGN and there is a EUR/BGN exchange rate. In THIS case I could only assume that the trading account’s base currency, if it were in EURO, would be changed to BGN, and the capital amount would be converted at whatever the EUR/BGN exchange rate was at the time. But would this apply in the case of a total ‘collapse’ of the EURO???
Hmmmnnn… Some food for thought here.
Well (just ‘thinking out aloud’): look at it the other way around. When Germany adopted the EURO on what basis was the Deutsche Mark converted to EURO??? But again: this is not the same thing i.e. the Deutsche Mark hadn’t ‘collapsed’.
Interesting question.
Regards,
Dale.
Hi Dale.
I guess the “practical” outcome would be that the new currency would have more value in relation to the old currency. I’ve never heard that a new currency after a crash/default of an old currency had less value. I’ve read a lot about the topic and if a currency crashes, defaults or whatever we call it, the people don’t like the currency anymore anyways, because of a usually high inflation rate. Which means they have lost already most of the value of their savings in cash or equity drawn in that cash until it defaults. Anyways, after a default there is still more loss in value of the old currency. The new currency can be more stable than the old currency, but this is not mandatory.
In the deal of the DM substituted by the Euro the rate was fixed. Around 2:1. You are right, the DM had not collapsed/defaulted/… This was a merger of several foreign currencies to just one, the Euro.
Interesting topic. I will be ghosting this I never thought about what would happen if a currency was to crash.
For a currency to crash, several things would have to happen. And since the currency in question is the Euro, the impact would be felt all over, affecting other currencies as well. But to answer your question, would think that any funds in account would be changed to another currency - though at what rate would remain open to question and the broker…
So… was your money in MF Global? lol
jk usually I’ve rarely heard of you getting your money back, unless one of the regulatory says you need to pay they take what they can and split. Forex isn’t as well regulated as something like equities, so legally were sort of boned upon that. Anyways active withdraws would be a good counter measure.
Actually I’m wondering is there any insurance in fx like there is for something in options?
Good morning.
I don’t have any answers as yet but I’m going to contact one or two people at Head Office today see what their ‘take’ would be on the subject.
Tansen:
You’re right about FOREX not being as well regulated as equities for example. But as far as customer funds being protected against a BROKER default or collapse: at least that is in place if the broker is regulated of course. What differs is the amount covered e.g. tha FSA in the UK covers a FOREX account for £50 000 whereas MiFID (Europe) covers a FOREX account for €20 000 and so on and so forth. But this applies to a BROKER default or collapse not the collapse of a currency.
But I don’t enough about all of this (yet) to make qualified statements about it but I intend to find out anyway just for interest sake.
Based on my understanding of fundamentals (which we all know is non-existent): I don’t THINK that we’ve got to worry about the collapse of the € so no reason for panic (nowithstanding my ‘disclaimer’ regarding my understanding of fundamentals of course) but it IS INDEED one of the more interesting topics (you know: a few ‘steps up’ from a topic such as ‘which broker is best’)!!! LOL!!!
But this topic could become even more interesting. Our currency (South African Rand) is based on the Gold Standard. In other words: every GENUINE note in circulation is ‘covered’ or ‘backed’ by it’s equivalent amount of Gold. If I’m not mistaken: the USD was also based on the Gold Standard at some point in time. But what about countries that don’t have Gold???
As a matter of fact (again just ‘thinking out aloud’): let’s say I (ME or anyone else) decided to ‘open’ or ‘declare’ a new country with it’s own currency. Where would you start??? Say you chose your currency to be the ‘Atlantis Rotty’ (sorry: it’s the best I could do after waking up and this being my first post of the morning i.e. the country would be called ‘Atlantis’ and the ‘Rotty’ comes from ‘Rottweiler’ so therefore the ‘Atlantis Rotty’. ISO code: ‘ATR’ which oddly enough is the abbreviation for ‘Average True Range’ too)!!! LOL!!! So how would one determine the value of the ATR against, say, the € ‘from the get go’???
Regards,
Dale.
Not bad for the first thread in the morning. On currency value, kinda hard to figure out since most of the value is relative to trade, assets etc. So let’s say that Atlantis does not have much by way of trade [since it’s new and does not import/export anything] and as far as assets go, they’re yet to be determined. So does that mean that the new currency would start at “0”?
Don’t think that would be the case but then again, I’m not an expert…wish someone would chip in.
FYI, do think that any new currency valuation would be determined by assets to start off with…
Pray that any money you had in that currency was converted to gold BEFORE the crash!
Hello,
Well a friend of mine found this sometime today (no idea why I didn’t think to use Google myself but anyway):
Euro - Wikipedia, the free encyclopedia
(The link take you to a section of a much longer article).
Still trying to make TOTAL sense of it. It does ‘sort of’ explain what how many € each country’s currency was worth at the TIME of adopting the €. Oddly enough: you’ll note that there was an exception in the ‘timing’ of the conversion for NONE OTHER than GREECE!!! How ironic!!!
But it still doesn’t explain what would happen if a) the € collapsed or b) what would happen if a country (Greece for example) ‘opted out’ (although I guess through a series of ‘backward calculations’ one could get to what a ‘revived’ Greek Drachma is worth the day they ‘opted out’).
Regards,
Dale.
Not sure if a country can opt out of the zone overnight…but assuming that happens, would think that the currency would be changed to the gold standard/USD or some other form of acceptable reserve currency when it happens. But for what it’s worth, the Drachma may not be valued that highly given the current and future scenarios.
Good (Saturday) morning all.
Well here’s something interesting that arrived in my Inbox this morning. It’s an article in SFO Magazine (Stocks, Futures, and Options Magazine. See. Told ya. Don’t think that the Spot FOREX Market is a little ‘island’ all on its own)!!! LOL!!! It’s an article entitled ‘What Survives a Euro Crash’. I’ve downloaded the article for you (see attached) (am I not ‘nice’)??? LOL!!! Seriously: it’s a great magazine but the way it’s published online is ridiculous i.e. it’s cumbersome, a pain in the ‘you know what’ to read online, and if you want to download the entire magazine it’s HUGE. But for those that want to read or download the entire magazine here is the link:
The Free Magazine for Stocks, Futures and Options Traders
I just thought that the timing of the article was ‘on the button’ given this thread.
And Fxmall:
Well done. So far as I can tell you’re also ‘on the button’ (at least according to the way I understand the article) (or do you ALSO subscribe to SFO Magazine and saw the article before me)??? LOL!!!
Regards,
Dale.
What Survives a Euro Crash - SFO Magazine - November 2011.pdf (1.92 MB)
Good afternnoon together! 
Well, I do not believe there will be an euro crash. The buck as the fiber are there to get inflated over a long period of time. Why?
Politicians who have power don’t think usually in terms of what is nice for the average Joe Sixpack, imho. They think imho like this:
- How can I get elected again to keep power?
- How can I build most of my visions with a debt what is already gigantic?
- How can I reduce this debt?
If it goes to no. 3 there is the one solution by creating a currency which is more or less under control of the power of those politicians. That is with the buck as with the fiber and others. Sure, there is this nice theory from independent (laughing aloud and dirty, lol) central banks and all that. I read 2 days ago how in the ez they now try to circumvent the rule that the ecb can’t buy more junk from Italy/Spain: The iwf could help out, because the iwf can buy without limits. If the ecb just lends something to the iwf and the iwf in return buys, that would be a perfect solution to fulfill no. 3. It’s definitely not good for the tax payers and cash or equity collectors, but it will inflate the debt away. At least a bit of it.
That is how it will imho go with a probability of higher than 90%.
Plus I guess no country will leave the ez. That’s all just rumor to confuse things. Nobody has an interest in leaving. As long as the sheeples believe in the propaganda of a stable currency there is even from this side no need for. Greece would do anything to stay. They did already tune their books in order to join. Why would they want to leave now? They have immense advantages. Because they get money for free from other countries.
Then just looking after the facts, the eur is at ~ 1.35. Even the worst rumor 2 years ago could just push it down to 1.18. Still more paper value than the buck.
It will all happen like it happened in the old empire of Rome. Read about it and how they tuned the coins with lower precious metals. Here is just a start:
Roman currency - Wikipedia, the free encyclopedia
It will happen again (and happens already) with the fiber, the buck, the cable and all other fiat money. If you wanna save your value, buy the mother of all currencies.
It could be answered by your broker, what happens if your account curreny collapsed? Anyone with real account
Hi,
No offense but that would be REAL easy would it not. And just look at the quality of the content of this thread and valuable information posted and found.
And I’ll tell you something else: the brokers will have to ‘grapple’ with the exact same issues in the event of a € ‘crash and burn’ and my ‘bet’ is that they’re doing the same thing i.e. asking the same questions.
But if it’ll make you feel better I’ll ask!!! LOL!!!
Regards,
Dale.
Ahh, thanks! And yes, did review the article - not this one, but something very similar. Remember when Dollar was no longer pegged to gold, this was covered in detail and if you compare some of the articles written to the ones written now, it really makes you bang your head on the keyboard…
Yea, some morning…huh?
LOL
That must be the gold. If I have more capital, it will be my next target.
Knowing Mr. Gecko (Buckscoder): it is Gold.
But don’t just ‘go buy’. Speak to ‘the man’ first!!!
Gold and I dont have a particularly ‘friendly’ relationship so I cannot advise you. Well that being said: my ONLY advice I could give you would be to NOT buy Gold, particularly at these levels, with leverage. Gold has this ‘nasty inherent personality trait’ that causes it to correct ‘violently’ and then ‘hang around’ that level for a few months before moving up in price. I guess what I’m saying is to INVEST in Gold. Don’t try to TRADE it (well that’s ME anyway)!!! LOL!!!
Regards,
Dale.
Edit:
Oddly enough: I received this in my Inbox this morning (before I’d posted the above). It’s from Investopedia. Some good stuff about Gold (and a lot of other good stuff too if you’re interest). How we got from the collapse of the € to HERE: once again I’ll never know!!! LOL!!!
http://lists5.investopedia.com/read/archive?id=6923&e=dpaterson%40deltastock.co.za&x=e2782d79
Good afternoon Dale and all!
Well, thank you! Albeit I am unimportant in this “game”, lol. Your right. Even if it goes down for a time, the long term direction was and is only up. Or to be frank, it’s sideways. Since a couple of thousand years. It’s what goes down, the paper bubble, what makes the mother of all currencies look going up.
So, after some time to invest some of the profits of trading in xau could be a invaluable decision.