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I don't see why a default has to be widely publicised, apart from the fact that it would be difficult to avoid publicity.

From the point of view of the PIGS economies, it is actually preferable if a default is "kept in the family" until some time after the fact, so the money markets don't throw a hissy fit and crash their economies. And if German politicians want to bail out German banks and then lie to their public about it, then that's a matter between the German electorate and Mrs Merkel.

Indeed I can think of a lot of excellent reasons we might prefer her to try to keep it under wraps. Not the least of which reasons would be that such a coverup would make her politically radioactive when exposed (as it inevitably must be - you can't hide a bailout on that scale). Sadly, I think she'll prove to be too politically savvy or too ideologically committed to the fiction that Germany holds some sort of moral high ground to let such a default pass unmentioned.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu May 12th, 2011 at 11:15:13 AM EST
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Especially in the USA, but probably elsewhere as well, I see ongoing damage from the fraud based TBTF banking model with its accompanying regulatory and governmental capture. The longer the system runs the more damage it does. So I would prefer a crash NOW to entropy death later. There are so many unpayable debts out there that the best thing would be an event that would take down enough bad banks that the system could not be saved and it would have to be reconstructed. Of course it could well be reconstructed along similar lines, but, at least, there would be an opportunity for something better to emerge.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat May 14th, 2011 at 08:08:53 PM EST
[ Parent ]
So I would prefer a crash NOW to entropy death later.

Yes, but a country with a structural import dependence on fuel and food and a foreign primary deficit may view things in slightly different terms. Especially if they have neo-Nazis rampaging through the streets, looking to take advantage of any "national humiliation."

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 15th, 2011 at 03:58:19 AM EST
[ Parent ]
I don't see why a default has to be widely publicised

It needs to be publicized to further discredit the system and to force recognition and write down of unpayable debts. If bad debts can be written down a better economy becomes possible. Anything that a TBTF is forced to write down is one more former bad debt that they will no longer be able to use in their ongoing attempts to squeeze blood from stones. And if it takes down the TBTF, that is a good thing.

I don't see how anyone other than the elites can benefit from the current situation and I find it surreal that the elected governments of the chief victims, the PIGs, have been turned into the enablers for the continuation of the torture of their own populations. Guess I just don't have the stomach for serial abomination.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat May 14th, 2011 at 08:19:56 PM EST
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I recognize that such a "moral" position is totally at variance with what passes for contemporary academic economics, so I don't recommend that any that look forward to employment in that discipline publicly join me in my desire for a collapse. I really don't want it either, it is just that I think it is the least worst long term outcome and offers the best chance for a genuine improvement in governance. But, to paraphrase what Lenin said of the Romanovs: We have had 120 years of financial capitalism. Why not another 120 years?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat May 14th, 2011 at 08:25:50 PM EST
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