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A financial collapse due to voter rebellion in Greece and France, if it comes, would weaken - if not destroy - the forces that are benefiting from and driving the current policies. Such a collapse is unlikely to be confined to the EMU or Europe, but would also impact the USA. I would find such an outcome superior to acquiescing to the current self defeating policies of increasing privation in the name of austerity, driving economic activity straight into a debt-deflation death spiral.

Were this to lead to the collapse of a number of TBTFs it would either show that they are not too big to resolve or it would force what until now has been avoided - writedown of bad debt. Either outcome would be a positive. It would be highly ironic were Germany's aversion to allowing the ECB to print money were to lead to the writeoff of large portions of debt held by German banks, among others. Even were TPTB to manage to temporize the problem once again, even that would be illuminating.

I hope that Alexis Tsipras and others in Greece forcefully make the point to the Greek electorate that the bailouts are not of Greece, but of the lending banks and the the bank making a loan is always in a better position to know the quality of a loan than is the borrower. This is especially true when the banks making the loans are also massively involved in orchestrating attacks on currencies and the ECB refuses to deal with that problem - among a large list of willful failures.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue May 1st, 2012 at 01:00:27 AM EST

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