Greece will default, and with that default the European Union quietly dies. Who are the Germans going to send into Greece to collect their debts - elderly pensioners and Turkish immigrants? Who's going to fight to preserve an anti-democratic, anti-national institution like the EU? The Greek government is giving its people a chance to run on the banks before their deposits are confiscated, or "bailed in." If the Germans want their money, I hope the Greeks tell them, "Molon Labe."While the Greek government believes it may have won the battle, if not the war with Europe, the reality is that every additional day in which Athens does not have a funding backstop, be it the ECB (or the BRIC bank), is a day which brings the local banking system to total collapse.As a reminder, Greek banks already depends on the ECB for some €80.7 billion in Emergency Liquidity Assistance which was about 60% of total deposits in the Greek financial system as of April 30. In other words, they are woefully insolvent and only the day to day generosity of the ECB prevents a roughly 40% forced "bail in" deposit haircut a la Cyprus.
I submitted an article to Return of Kings yesterday about the lessons we can learn from the last time the West experienced total socio-political-economic collapse. Back then, the deposing of the last Western Roman emperor, Romulus Augustulus, is generally taken by historians to be the moment when the Western empire finally died after a century of lingering illness. If current trends continue, the future is not going to be a multicultural wagon train to the stars like in Star Trek. The North American continent will fragment into several constantly warring regional powers and squabbling tribes. Europe will be a mostly Islamic ocean with a few islands of holdout Europeans. That's pretty much the setting of my upcoming series of dystopian novels. It's depressing to imagine it, but Mike Judge's Idiocracy is probably the most prophetic film of our time.