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Other conservative analysts and euro system apologists think it's coming later this year or next. Disruption will follow. In July 1997, Thailand's baht devaluation was thought too insignificant to matter. The Asian economic crisis followed.
Thailand's economic weakness affected the region. At the housing bubble's peak, so-called experts said it reflects only 5% of GDP. Again they got it wrong. Its decline had a disastrous multiplier effect. Financial instability keeps increasing.
Expect worse when Greece exits. The ECB alone holds 50 billion euros of Greek debt. Default will hit hard. Banks with large holdings will feel it. Breaking up is hard to do.
An ugly divorce seems likely. Ellen Brown suggested five creative alternatives.
(1) "The open marriage." Adopt a dual currency system. Combine the drachma and euro.
Better still, adopt the Argentine solution. It works.
From April 1991 - January 2002, Argentina maintained a currency board. The Argentine peso was pegged one for one to the dollar. Massive fiscal deficits accumulated.
In late 2001, Buenos Aires adopted a dual exchange rate system. A preferential exchange rate peg for exports was adopted.
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