The Daily Telegraph’s Ambrose Evans-Pritchard is out with a fascinating analysis this morning of what a Greek exit (“grexit”) might mean. Default, for starters. But the immediate implications for Germany in particular are much more dire than anyone is talking about – perhaps $600B dire. It could also trigger a run on the euro, and with it the collapse of the EU. Yes, this would undoubtedly have extremely bullish consequences for U.S. Treasurys (Go, TLT!). But we should be careful what we wish for, since the T-Bond rally might mark the massive flight of capital that would set deflation’s endgame in motion. To access Pritchard’s analysis, click here.
