May 4 (Bloomberg) -- European Central Bank President Jean- Claude Trichet, who capitulated on a January pledge not to relax lending rules for the sake of one country, may have to sacrifice more principles to prevent Greece from bringing down the euro.
Trichet yesterday diluted rules for the second time in a month to guarantee the ECB will keep taking Greek government bonds as collateral for loans. The central bank may have to extend that to other nations, renew a program of lending unlimited cash to banks for a year, and even start buying government debt if the 110 billion-euro ($146 billion) bailout plan for Greece fails to stem the euro’s slide, economists said.--
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Comment: The way how modern states work implies an inexorable move towards the destruction of currencies. By not allowing that a financial meltdown would run its course with a (relatively short) deflationary depression, modern governments opt for stagflation and produce a hyperinflationary depression.
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