Europe is snared in its own web of false narratives. The first being that Greece can and will repay its debts. Those holding PIIGS’ debt are squealing today.

All the roads ahead will be hard for Greece. Some Greek corporations have already issued scrip, due to the shortage of Euros. Handelsblatt reported that Greek banks will be tapped out by the end of the day today. Greece could go back to its own currency, but what will back it? Or as others suggest, Greece can nationalize its Central Bank and print Euros at will, but the Troika’s next move will probably be to label that a criminal act, because it desperately needs to keep other fringe debtors in line. Demonizing Greece may be the temporary fallback position.

The Eurozone may try to cut off currency compliant paper and ink to Greece–if Greece didn’t have the foresight to secure supplies.

Greece prints Euros that start with Y in the serial number. If Greece does nationalize its Central Bank and starts a massive Euro printing program, Draghi may suggest that Euros with serial numbers starting with Y are counterfeit currency. He probably wouldn’t dare say that explicitly, but there will have to be a mechanism to warn other countries it won’t be tolerated.

Here’s a bonus question: How many unauthorized Euros have already been printed, not just by Greece, but by other European countries?

See also: “Euro Endgame” May 25, 2011.