The Collapse of the Euro?

In this article from the BBC, Lloyd’s of London says they have contingency plans for the collapse of the euro.

We all know that there are severe economic problems in the Eurozone, and that an entire country has gone bankrupt.

And we all know that we could see it coming in hindsight. Turns out that unsustainable financial decisions are unsustainable.

But what effect would the collapse of the euro have on the world? What effect would the collapse of only Greece have?

Who can say? Even Warren Buffett stopped making sense. Three years ago, he said he was going to invest in German, family-run companies. That made sense. But this month he says he is investing in local newspapers (thoughtful commentary here). That doesn’t make sense… financially, historically, logically, or any way.

Apple is the most disciplined and financially-solid company I know of. (More cash than the US government. No debt. Most valuable company in the world. Reasonable P/E. Astonishing EPS. Highest sales of any retail store in any industry. Careful growth.) Did I mention their discipline? More disciplined than an Olympic athlete. They are best suited (more than any other company, or individual) to survive a global financial collapse.

But would even AAPL’s stock survive a collapse of the euro? Would gold? Would commodities? What about an alternative ETF (like UltraShort S&P500 Proshares)? I suppose that those with money diversify across several of these options when a recession (or collapse) looms.

What do you think? What insights do you have?

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One comment

  1. Excellent post and commentary on the consequences of the Euro collapsing. You ask very solid questions that make me wish I had more training in economics. This I do know, though, the commentators will have opinions and probably hotly debate the validity of their own. Ahhh,there is One who does know and He can be trusted 🙂

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