From tonight, Crash2 will be a new page at The Slog, ever-present at the head of the site’s Homepage.

Greek doom – and French banking exposure to it – is the opening sequence of Crash 2.

I’ve written many times before about how the ‘inevitable’ collapse of the current global economic model seems to take forever….so it doesn’t do to be too previous about it: the boy who cried wolf, and so forth.  But obvious signs have, this week, been turning into clear trends. The Slog thinks today, 15th June 2011, marks the beginning of the short-term events that will lead to Crash2.

Let’s take a brief look at why.

As so often, it begins in Greece. But it also involves the way mainstream, established news sources are beginning to cover what’s happening there.

You know things are bad when the Dacre Mail runs a piece about how people have only got themselves to blame. I run pieces saying this too, but I don’t revel in the gore – only the Mad Dacre’s Mucksheet does this. This morning’s piece about a nation being hounded to death by selfish Franco-German self defence was headlined, ’20 BILLION EURO BAILOUT – AND STILL THE GREEKS AREN’T HAPPY’. If the ClubMed nations weren’t on their uppers, this would be hysterically funny: ‘FUHRER LIBERATES SUDETEN GERMANS – AND STILL THE CZECHS AREN’T HAPPY’ – and so on.

But whatever you think of it, the Mail does represent a useful marker. Its xenophobic hysteria tells you that something is clearly very badly wrong; otherwise, there’d be no point in trying to get the readers apoplectic about it. (Dacre knows that a few days down the line, The Sun will scream, ‘UK TO BAIL OUT IDLE KEBAB-GREASERS’…and in some perverse way, this tragically angry man will feel vindicated.)

Reuters agrees that the situation is serious – but as usual in a more measured, objective and analytical tone: it simply points out that French bank exposure to Athenian debt is horrendous:

‘ Moody’s Investors Service on Wednesday placed France’s top three banks, BNP Paribas, Societe Generale and Credit Agricole (CASA), on review for a possible downgrade, citing the banks exposure to Greece’s debt crisis. Today’s actions reflect Moody’s concerns about these banks’ exposures to the Greek economy, either through direct holdings of government bonds or credit extended to the Greek private sector directly or through subsidiaries operating in Greece – a key factor for CASA and SocGen due to their local Greek banks.’

In this observation, the French Madamoiselle is forced to show a bit of ankle. There’s also some calf visible in this piece from the Expatica website, which notes that:

‘France’s current account deficit widened to 4.8 billion euros in April from 4.1 billion the previous month, primarily due to an increase in imports of goods, according to data released on Tuesday. The current account deficit — the shortfall in trade in goods and services, investment and other monetary transfers — was worsened as the deficit in the trade in goods expanded to 7.3 billion euros from 6.3 billion euros in March, the Bank of France said.

The French Economics Minister was unavailable for comment, as she was still filming Around the World for Eighty Votes on location. But the bottom lines on this one are (a) France is just as vulnerable as everyone else and (b) like Germany, it is hardly a dispassionate witness when it comes to how much the Grecian should earn. (As The Slog posted last year, France has the fastest-growing deficit in the Union).

But what will Greek Bailout2 cost? Spanish news agency EFE today quotes Belgian Finance Minister Didier Reynders saying: “We’re talking about a new intervention of €80bn coming from the IMF, the EU and the eurozone.” The article suggests that a further €25bn is expected to be provided via the extension of Greek debt held by private investors, making up a total rescue package of €105bn. Writing in Suddeutsche Zeitung, Bundesbank President Jens Weidmann suggests that the ECB would not take part in any debt rollover and will seek to reduce its exposure to Greek debt as quickly as possible.

There’s a very good reason for this: ECB Board Member Mario Draghi told the EU Parliament yesterday that the ECB has an exposure of half a trillion dollars to the EU debtor nations.

Earlier in the week, The Slog posted that hyper-stagflation – mega inflation + output slump – is about to be visited upon the US, the UK, the EU and (partly self-inflicted) China. Reuters has again take up the theme, with particular relevance to the US:

‘Underlying U.S. inflation rose to its highest level in nearly three years in May, while a regional factory gauge posted a surprise contraction this month, reports on Wednesday showed…the Labor Department said the consumer price index outside food and energy surged 0.3 percent. That was the largest gain since July 2008….Separate reports showed a striking decline in New York State manufacturing activity and a disappointing 0.1 percent rise in May industrial output….”Core inflation pressures are a lot stronger than we’ve been seeing in recent months,” said Dean Maki, head of U.S. economic research at Barclays Capital in New York. “This will make the Fed more cautious on any additional actions.” ‘

This is the first snapshot in a series which, I can only hope, might one day build into a movie written contemporaneously with what is going to be – by any standard – a historic shift from one period of human history to another. But as I sit here tapping away at it, British Chancellor George Osborne is regaling his Mansion House audience with a series of empty cliches about recovery, being open for business, being the Number One place to do business, and having the best something or other “in the entire G7”.

What he isn’t pointing out – but his tired audience knows perfectly well – is that (through no fault of his own) Osborne’s economic rebalancing and fiscal cuts have started six years too late….and been sabotaged by the profligate madness of the EU, and the weakness of his boss. We are the classic case of deep stagnation alongside building inflation – what The Slog has taken to calling hyper-stagflation.

I predict that a year from now, Osborne’s speech tonight will sound like the fantastical super-optimism of a small man with No Big Ideas.

But these days we are, as a whole, one small island in an economic world careering off a theoretical cliff in myriad different directions. The new Crash2 page will do its best to chronicle that process – hopefully without dwelling too much on parochial events on this island.

Stay tuned.