Greece should allow the full and painful liquidation of the paper money excesses, it should let the government default, exit the euro and be the first to reintroduce a proper gold standard. This would give the country instantly much needed credibility. It would not only keep Greek savings in the country, it would attract savings from around the world, potentially making the country a magnet for savers everywhere who are increasingly concerned about aggressive monetary policy and are desperately looking for safe places to park their cash.
The world is facing the worst financial crisis since at least the 1930s, “if not ever,” the governor of the Bank of England said last week, when he explained to an increasingly sceptical and weary public the bank’s decision to print yet more fiat money and use it to buy yet more government bonds. I doubt that his words or his actions will do much to restore confidence. And they will not mean an end to this crisis.