German Chancellor Angela Merkel said euro-region leaders must erect a firewall around Greece to avert a cascade of market attacks.
How this would be accomplished she doesn’t say. The truth is, it’s not possible in our 24/7 financial world to firewall any event. The linkages are worldwide. Greece wobbles, causing French banks to have a liquidity crisis. This blows up a hedge fund in Singapore that was on the wrong side of CDS trades so they liquidate causing margin calls in gold due to traders dumping it to meet other obligations…
You will note that none of this has anything to do with the real world. Karl Marx called it fictitious capital, money making money (or losing it) and creating nothing of value in the process, quite often screwing things up instead.
The sovereign nations that are in trouble should simply default. Screw the banks. Our worldwide economy will never become healthy until the garbage loans the banksters made and the toxic bonds they sold are allowed to take on their real value, which might well be 50 cents on the dollar or less. Merkel and the rest refuse to allow haircuts on these toxic “investments.” But the capitalism they pretend to believe in will force this to happen anyway, soon too.