eurodollar future
If they short the contract, that means, in 5 months, they will owe if the price goes up (receive if the price goes down) the difference between the price they sold the future at, and the 3-month Eurodollar interbank rate, times the value of the contract, times 5. If they're long, they receive if the price goes up (owe if the price goes down), but otherwise unchanged. Cash settlement means they don't actually need to make/receive a three month loan to settle the future, if they held it to expiration - they just pay or receive the difference.  This way, there's no credit risk beyond the clearinghouse. The final settlement price of an expiring three-month Eurodollar futures (GE) contract is equal to 100 minus the three-month Eurodollar interbank time deposit rate.
^This.   As we can see with the pending $125b bail-out that Europe will provide. Imagine, if India was in the place of the Spanish? Who would conjure up such a bail-out for them?  As said by 23_47 earlier, the credit rating is a measure of risk. A country backed by a 17-country alliance (Eurozone) is less risky to invest in than a country without such support. The Euro will collapse because Spain, Italy, Portugal and Greece will have to default on their debt. In order to keep up with current payments they have to take emergency loans at the same time that their economies are in recession and demands on social programs are increasing. There is simply no way that they can cut enough spending and raise enough revenue to balance their budgets. That is not opinion, it is arithmetic.   If they cannot pay their loans they will either voluntarily leave the Euro, or they will be forced out.   Next comes France who also has a large and growing budget deficit and a large public debt. It is unsustainable. That which is unsustainable will end.   The last reason that the Euro will fail and that it will be soon is Germany. Up to now, all the bailouts of Ireland, Portugal, Italy, Greece and Spain have come predominantly from Germany. In order to float the Eurobonds that some idiots think might save Europe, the German people have to authorize their government to participate and thereby take on another mountain of debt. The German people will not vote for that authorization.  Is that enough reasons? Because there are more. Lots more. Read [Mike Shedlock](http://globaleconomicanalysis.blogspot.com) For a time period as short as a matter of months, commercial paper or bonds about to mature are the highest returning investments, as defined by Benjamin Graham:  An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative. There are no well-known methods that can be applied to cryptocurrencies or forex for such short time periods to promise safety of principal. The problem is that with $1,500, it will be impossible to buy any worthy credit directly and hold to maturity; besides, the need for liquidity eats up the return, risk-adjusted.  The only alternative is a bond ETF which has a high probability of getting crushed as interest rates continue to rise, so that fails the above criteria. The only alternative for investment now is a short term deposit with a bank. For speculation, anything goes... The best strategy is to take the money and continue to build up a financial structure: saving for risk-adjusted and time-discounted future annual cash flows.  After the average unemployment cycle is funded, approximately six or so years, then long-term investments should be accumulated, internationally diversified equities. My 0,02€ - I probably live in the same country as you. Stop worrying. The Euro zone has a 100.000€ guaranty deposit. So if any bank should fail, that's the amount you'll receive back. This applies to all bank accounts and deposits. Not to any investments. You should not have more than 100.000€ in any bank. So, lucky you, if you have more than that money, divide between a number of banks. As for the Euro, there might be an inflation, but at this moment the USA and China are in a currency battle that 'benefits' the Euro. Meaning you should not invest in dollars or yuan at this time. Look for undervalued currency to invest in as they should rise against the Euro. Its highly unlikely to 'collapse', perhaps there will be  managed defaults, yes, but there is no way they will let it collapse as a global depression would follow.  If the euro collapses it will also bring down most of the global economy including the likes of China and the US (not to mention the Germans) and they are not going to let that happen.  http://www.ft.com/cms/s/0/6cf8ce18-2042-11e1-9878-00144feabdc0.html#axzz1y0lc0hy1  P.s. I am surprised we have not seen more suggestions of buying guns, land and building a commune. theoretically this concept makes sense.  However as recent numbers have shown ( I do not have the source handy but one can simply obtain this information via the ECB's website) banks have tapped this LTRO, something in the likes of 500 billion or so, and instead of buying Sovereign debt, they instead prefer to park this money with the ECB, paying something like 25 bps on deposits.  so instead of using this LTRO money to buy Sovereigns or perhaps lend to other banks, easing the strain on LIBOR, banks have just parked this money back with the ECB, as the ECB has seen its deposits once again reach record amounts (again, see the ECB website for proof).  Just this speaks volumes about the LTRO carry trade and how it is evidently not going to achieve its long term goal of bringing spreads down in Europe.  Perhaps in the short run yes, but if you look at the fundamentals (EURUSD, the EUR Basis Swap and the OIS-LIBOR Spread) they show how the situation in Europe is far from over, and the LTRO is nothing close to a long term and stable solution Crypto will make us all rich when it becomes the new standard highly volatile currency.   As we all know how attractive a highly volatile currency is.   Who doesn't want to save on 1% banking fees for cross border transactions when you could use crypto and potentially make or lose 20%.   /s Gundlach shared a chart that showed how investors in European “junk” bonds are willing to accept the same no-default return as they are for U.S. Treasury bonds. In other words, the yield on European “junk” bonds is about the same—between 2 percent and 3 percent—as the yield on U.S. Treasuries, even though the risk profile of the two could not be more different.  Sounds like a strong indicator to me. How might this play out in the US? These scenarios discuss the period to 2025. They assess the deep uncertainty that is paralysing decision-taking. They identify the roots of this as the failure of the social model on which the West has operated since the 1920s. Related and pending problems imply that this situation is not recoverable without major change: for example, pensions shortfalls are greater in real terms that entire expenditure on World War II, and health care and age support will treble that. Due to the prolonged recession, competition will impact complex industries earlier than expected.  Social responses which seek job protection, the maintenance of welfare and also support in old age will tear at the social fabric of the industrial world. There are ways to meet this, implying a major change in approach, and a characteristic way in which to fail to respond to it in time, creating a dangerous and unstable world. The need for such change will alter the social and commercial environment very considerably. The absence of such change will alter it even more.  The summary is available [here](http://www.chforum.org/scenario2012/paper-4-6.shtml) or at the foot of the link given in the header. The much richer paper is [here](http://www.chforum.org/scenario2012/paper-4-1.shtml).  These scenarios are the latest in a series in a project that dates back to 1995. Over a hundred people participated from every continent, over a six month period. The working documents are available on the web. Cyprus could be *forced* into such a position because the deposits are euro-denominated and the issuing central bank sits outside the sovereign authority of Cyprus. So they could go, hat in hand, to the ECB asking them to backstop deposits. A lender of last resort function that is more or less a given in countries with their own sovereign currencies.  In a country like the US, where deposits are denominated in US dollars and the US is the issuer of the dollar, there would always be a option. Bail-ins are certainly possible as a political choice but they'd never be the only option. Which is why you didn't see them or depositor losses of any kind in spite of hundreds of bank failures in the wake of the 2008 crisis. I don't intend to live in the UK again If you don't intend to live in the UK again, my advise would be to move this back to Germany in EUR in the near future. Generally taking Fx [Currency] risk is not advisable unless the portfolio is large. I don't need the money in the short term As you don't need the money immediately, you can afford to wait and watch a bit. Whether the rate will be more favourable or worse can't be predicated with certainty. So you can wait for few weeks / months and pick up a week when it is slightly favourable and convert them into EUR. "The result would be catastrophic. The almost-reserve currency would collapse which would produce a medium sized depression, perhaps same with with 2008-now, or even larger, since don't forget, that one was produced from a housing bubble existing in only a part of the american economy; imagine what would happen if almost the full size of the economy (Europe) would collapse, even if Europe isn't as much ""connected"". But reality here is, there's no chance to that. The real reason you hear those rumors is that America (along with minor partners like the British Sterling) want to bring down the Euro for medium-term benefit. e.g. Several economists get on Bloomberg announcing they are short selling the Euro. Irony is, all this is helping the Euro since selling and short-selling and selling and short-selling helps massively its liquidity. It's like several nay sayers actually making a politician famous with their spite." "The way I am trading this is:  I am long the USD / EUR in cash. I also hold USD / EUR futures, which are traded on the Globex exchange. I am long US equities which have a low exposure to Europe and China (as I expect China to growth significantly slower if the European weakens).  I would not short US equities because Europe-based investors (like me) are buying comparatively ""safe"" US equities to reduce their EUR exposure." "Google ""forex broker"" and find one of the thousands that allows you to trade on Gold futures.  Then use one of them to short Gold... just watch your leverage. I would certainly wait before you're shorting gold.  Why tie up capital in a bubble that you think will burst in the next few years.  Wait for the price to increase and monitor for actual signs of the bubble bursting.  Right now with the Euro possibly collapsing shorting gold probably isn't your best bet." While it's possible that the dollar could lose its grip as the global currency, it's unlikely that it will be quickly supplanted by another.  The world might simply see a a paradigm shift towards the use of whatever currency suits whichever counterparty at any given moment.