The Greferendum was a great poke in the eye to euro-austerians and a triumphant rejection of bullying and the subversion of democracy. But what happens next? In the unlikely event that the ECB does a volte face and acts as lender of last resort to Greek Banks on Monday – and that is highly unlikely as the institutions are sure to be beset by days and weeks of confusion – which Germany will want to stoke it wants to force a Grexit– then as early as Monday the Greek Government will be forced to issue liquidity itself with a parallel currency or Euros marked with Y – which the National Bank of Greece prints anyway. If not there will be bank failures and crisis. What happens then is interesting. The Euro is like the Gold Standard only if the amount of gold shrunk over time. From a circuitist perspective when a currency issuer taxes its destroys the unit of account and when it spends it adds to it. The Euro is similar but more complex – countries as the amount of Euros is fixed and issued to national central banks in proportion to its capital key (GDP per head x population) – this then being an asset on the ECB balance sheet earning interest to the ECB at the ECB financing rate – this means when euro governments run a surplus they cause deflation as the taxation is steadily eating away at the base of the unit of account. If the Greek government recapped it banks with some form of parallel currency it would in effect be issuing above its capital key and so other euro users would likely not accept it at par (for example euros stamped with Y issued against Eurozone rules) – it would likely trade at a discount. If it traded as a discount the Greek Government could not accept it at par for tax payments as through arbitrage no one would rationally spend the parallel currency they would use it to pay taxes only instead – this is a good example of Gresham’s law. Over time with the Greek Government abandoning austerity and expanding the unit of account and the Eurozone doing the opposite the value of the two currencies would drift ever further apart. So Greece doesn’t have to be thrown out of the Euro – and Im sure Germany knows this – it simply needs the Greek Government to step in as lender of last resort, then every day this new currency circulates the more its splits from the euro.