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By now everyone realizes that the euro is in major trouble and will no longer exist in its current form for much longer. However, the common view is that it is Greece and possibly other PIIGS countries who will be forced out if the eurozone is broken up.

But few are talking about another possibility- of Germany leaving the EU.

One who is talking about this is Dr. Pippa Malmgren, a former economic advisor to George W. Bush and a former advisor to Deutsche Bank (NYSE:DB). According to Malmgren, Germany has already ordered the printing of Deutsche Marks in anticipation of a possible withdrawal from the EU.

Malmgren states,

The social contract between Germany’s citizens and its leaders preclude [debt monetization] given their history. Germany has already begun to emphasize the need for a new EU Treaty that would compel fiscal harmonization, penalties for those that break the Maastricht Treaty rules and other undertakings that would harden Europe’s defenses against economic default risks going forward.

If this is true, and Malmgren is correct, then the euro will absolutely implode. Germany is widely held to have the strongest balance sheet in the EU (though even the Head of its Central Bank admits that the country’s real Debt to GDP is over 200%).

However, compared to the PIIGS, Germany is relatively rock solid from a fiscal point of view. It’s also the largest economy in the EU. So if the Germany pulls out (70% of Germans believe the euro has no future) then Europe will experience a wave of defaults starting with Greece and spreading throughout the PIIGS.

We’re already seeing hints of this occurring. Germany Vice Chancellor, Philip Roesler said on September 11 that Germany won’t participate in any more bailouts and that any German politicians who approve more bailouts is committing political suicide.

We also have reports of Sarkozy and Merkel screaming at each other in recent meetings. France has announced plans to possibly nationalize several banks just “in case.” And Germany has dropped more than a few hints that it’s fed up with the situation.

Heck, even mainstream “thinkers” like Alan Greenspan says the euro is “doomed” to fail.

Something very bad is brewing behind the scenes. The Sarkozy- Merkel talks, the short-selling bans, the halted stocks, the leveraged EFSF, the hints of QE 3, all of this is telling us that the financial system is on DEFCON 1 Red Alert.

Ignore stocks, they’re always the last to “get it.” The credit markets are jamming up just like they did in 2008. The banking system is flashing all the same signals as well.

So if you have not already taken steps to prepare for systemic failure, you should do so now. We’re literally at most a few months, and very likely just a few weeks, from Europe’s banks imploding.

Source: Germany Is Already Printing Money - Deutsche Marks