The euro crisis? You bet it's important! | Bleader

The euro crisis? You bet it's important!


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Like other Americans who have read alarmist headlines about the possible collapse of the euro, I have been wondering, “But what does this have to do with me?” The other day I decided to find out. Above my desk at home is a mason jar that contains my international holdings. I turned it upside down and conducted an inventory.

Here is my portfolio in the obsolete currencies of the 17 Eurozone countries:

Italy: 7,400 lire in bills and coins

Austria: 98 schillings

Spain: 105 pesetas

West Germany: 10 pfennig

East Germany: 10 pfennig

In addition I came across 7.42 in euros and three coins that were not immediately identifiable but turned out to be Chuck E. Cheese's tokens.

I'm prepared to write off the East German pfennig as a bad investment, having been issued by a government that has not existed since 1990. The West German pfennig I’m more hopeful about: the German government continues to convert deutsche marks into euros at a rate of DM 1.95583 = €1. A euro, as I write this, is valued at $1.27 and sinking. A pfennig is worth a hundredth of a deutsche mark.

Likewise, the Osterreichische Nationalbank continues to exchange schillings for euros at a rate of €1 = 13.7603 schilling. Consul general Thomas Schnoell advises that schilling notes issued prior to 1983 can no longer be exchanged, but all coins remain convertible. Oddly enough, De Nederlandsche Bank in Amsterdam will continue to exchange Dutch guilder banknotes for euros for years to come, but guilder coins are no longer accepted.

And in Spain, not only may pesetas still be turned in for Euros — €1 = 166.386 pesetas — but Salvaterra de Miño, a town near the border with Portugal, recently launched "Operation Peseta," in which shopkeepers accept the old currency as payment. Business has boomed. Developments such as this are exactly why all Americans should be reassessing their private reserves of foreign capital.

As for the other countries in the Eurozone, it is—alas—hit and miss. Despite my significant stake in the lira, the Chicago consulate informs me that Italy’s national bank ceased exchanging lire for euros just last month. Last I looked, my 7,400 lire were valued at €3.82, or $4.86.

In short, the highly volatile international financial situation in which we find ourselves seemed to dictate my best move as sitting tight and hoping for the euro’s collapse, when a return to the old currencies would bring my entire fortune back into play. Unfortunately, my sources unanimously agree this will never happen. The Europeans insist the euro must not, cannot, and will not collapse. Says Jan Kees de Jager, the Dutch minister of finance, “We must not go back to the Guilder, it is not an option.” Says consul general Schnoell, “The Austrian government is fully committed to maintaining the common currency. Insofar, all the measures taken by the Eurozone members are determined to overcome the current crisis.”

And if they cannot? Says professor emeritus Marvin Zonis of the Booth School of Business, University of Chicago, “Yes, some serious people are thinking of a possible escape from the euro. Unfortunately, I think—and I have asked others—that they will introduce a ‘euro drachma,’ for instance—or a ‘new drachma’—and all the coins from the past will continue to be worthless. ‘Save your Confederate money—the South will rise again’ is still not good advice.”

Optimizing the value of my mason jar could involve emptying the contents into a paper bag and using the jar to store Bisquick.

Read more from Money Week:

"Against all odds," by Kate Schmidt

"An awesome gesture of 'Fuck you, poor people,'" by Mike Sula

"Lessons I learn from Margin Call," by Ben Joravsky

"Five great songs about money," by Miles Raymer

"Obama in town this evening for the usual reason," by Steve Bogira

"'What happened to the U.S. employment miracle?'" by Deanna Isaacs

"Money: What do you want with it?" by Ben Sachs

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