Following WWW's point, I was wondering how a crash in the Euro would impact upon anyone with a loan in Euros? I would presume (perhaps wrongly) that the loan would reduce, but surely the bank would have some contingency plan in place for this? I doubt they'd be happy with hundreds of customers suddenly having to pay less every month
If your loan is denominated in €uros, and the €uro crashes against your local currency (in which you earn / live), you pay comparatively less every month in your local currency terms.
It matter not what the bank thinks, as they receive the same repayment stream in €uros.
This is how the recession will pan out:
- Company results will be patchy for the remainder of the year
- Full year results 2009 will be bleak (January 2010 announcements onwards)
- Once all the bad news is out, people will pause for thought
- Investment on delayed / essential capital expenditure will start incipiently in Q1 2010
- Company results mid-year will start showing improvement
- Confidence returns late 2010
- High inflation ensues in early 2011 as excess capacity reductions cause large price rises.
- Late 2011, we all forget we were ever here.
Barring any further bad news / corporate disasters, I feel it unlikely to happen quicker, based upon my professional financial judgement. If currency crises / wars follow (which I feel is highly unlikely), add a year or so to the above programme.
Avoid flight training until January 2010.