Events in Europe continue to spiral quickly downward. The Greeks will vote in new national elections on June 17, which will be a referendum on the commitment to remain a part of the Eurozone.
Most Greek citizens want to remain a part of the Eurozone but are unwilling to make the continued sacrifices and endure the austerity that has been forced upon them to secure additional financial assistance. Most Germans want the Eurozone to remain intact but resist sending even more financial aid to the weaker members.
A run on banks has already begun in Greece, with about 800 million euros ($1 billion) being withdrawn a day. As the June 17th Greek election approaches, the outflow of funds is likely to accelerate. Fears of a banking collapse might prod the Greeks and Germans to compromise. Barring such an agreement, a Greek exit from the Eurozone would trigger bank runs in other nations, including Spain.
In the U.S., the impact would be a stronger dollar, lower interest rates, lower oil prices, lower stock prices, and slower economic growth. Preventing a deepening and widening of European bank runs will be critical to the world economy.