Greece, The Euro and Gunboat Diplomacy
Karl Whelan

It’s most definitely about debt and power! As a lay person, who has studied modern money, it seems to me the debt issue is a small one. Greek T-securities in the ECB are actually savings accounts, not debts as such. Paying them off is just a question of reversing the transactions at maturity. The only money involved is the interest. The ECB can refuse to do this [as you pointed out] but it only worsens the situation. Any bank involved in loans to Greece would have used credit creation to advance funds. Therefore no real assets are threatened and the banks accounts can be simply adjusted to reflect the lost wager.

Political cowardice is a world wide affliction. The Eurozone is just typical. The other lacuna is the abysmal ignorance of politicians and conventional economists about money. There is nowhere free in todays world from this ignorance. It is leading to a great deal of trouble because the world is in deflation and there will be no more boom timesor even good times to catch up on the credit fuelled economic mess we have made since 1971.