Greece's Choice: Hyperinflation or Colonizatiion

     This seems to be the basic choice for the Greeks. Cullen Roche argued last week that while Grexit made sense in 2011 now it's better to stay in the euro as leaving has a real risk of hyperinflation. 

    http://diaryofarepublicanhater.blogspot.com/2015/07/cullen-roche-on-greece.html

    http://www.pragcap.com/hyperinflationary-lessons-for-greece

    If that really is the risk then that should give on pause before going for Grexit. But when you look at what Germany offered Greece this weekend you have to ask-ok, so a little hyperinflation. How bad could that be?

   Germany seems to like the idea of Grexit. It didn't come out and say it but...

   It helpfully suggested that a Grexit of 5 years could be in order for debt restructuring-and then they can come back. Supposedly EU law doesn't allow restructuring within the euro-though that's not actually true. 

   It did give an idea of the kind of thing the Greeks could do to 'restore lost trust'-they could simply give $50 billion euros-27% of Greek GDP to Germany. You see why I'm beginning to think that a risk of hyperinflation isn't necessarily the worst choice?

  Grexit doesn't have to be a choice. Remember now that we already have had bank runs and capital controls, simply not doing aything-which the EU plans to do at least until Wednesday when Tripas evidnetly is going to ask his Parliament to vote for a worse deal than the Greek people just rejected last week-at some point Greece will run out of euros. 

  Then they will have to either do euro ious or the drachma so Grexit may be here within days. 

   http://diaryofarepublicanhater.blogspot.com/2015/07/a-grexit-in-all-but-name.html

   Krugman seems to disagree with Roche:

  "The thing is, all the wise heads saying that Grexit is impossible, that it would lead to a complete implosion, don’t know what they are talking about. When I say that, I don’t mean that they’re necessarily wrong — I believe they are, but anyone who is confident about anything here is deluding himself. What I mean instead is that nobody has any experience with what we’re looking at. It’s striking that the conventional wisdom here completely misreads the closest parallel, Argentina 2002. The usual narrative is completely wrong: de-dollarization did *not* cause economic collapse, but rather followed it, and recovery began quite soon."

 "There are only terrible alternatives at this point, thanks to the fecklessness of the Greek government and, far more important, the utterly irresponsible campaign of financial intimidation waged by Germany and its allies. And I guess I have to say it: unless Merkel miraculously finds a way to offer a much less destructive plan than anything we’re hearing, Grexit, terrifying as it is, would be better."

   http://krugman.blogs.nytimes.com/2015/07/12/disaster-in-europe/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body