A Greek exit from the euro is looking more likely to the economist David Malpass, according to the latest cable from the sage of Encima Global. In 2011 and 2012, he reminds, he’d argued that a Greek exit was unlikely “and would be catastrophic.” Now, though, he reckons an exit is “increasingly likely once Greece’s flow of euros dries up in late February.” France, Spain, and Italy are less indulgent, America is “more neutral now, needing German help in other areas.” Greek debt has been “migrated” from Eurozone banks. Those and a few other factors add up, Mr. Malpass reckons, to the return of the drachma.

Speaking here for the Sun, we can’t wait. It’s not that we’re long (or short) on the drachma. But what Mr. Malpass foresees is that as cash runs out the Syriza government “will be faced with the decision to submit to the IMF or begin paying its bills in drachma.” He trans-supposes that the new premier, Alexis Tsipras, “will probably be unable to agree to Europe’s terms.” So he will opt for “drachmization,” the impact of which will, Mr. Malpass reckons, depend “on how Greece limits government spending and how it handles contract law issues.” It’s contract law that interests us. Greece may present us for the first time since the introduction of the euro a crisis of legal tender.

Mr. Malpass doesn’t use the phrase legal tender. But, he writes by way of example, “if a lease is in euros, can it be paid in drachmas? What if it is the government or a government affiliate or friend which is the lessee or debtor — can it require creditors to accept drachma? Presumably future taxes can be paid in drachmas, but what about unpaid taxes denominated in euros? A key issue is whether government pensions can be paid in drachma. If so, this would soften the fiscal crisis, though it would mean sharply lower living standards for pensioners, violating one of Syriza’s campaign pledges.”

We wouldn’t want to hazard a guess as to which one of these issues is going to bring into focus the folly of fiat money in Greece — or the rest of Europe (America’s own battles over legal tender were fought over payments for a herd of sheep and a few bales of cotton). Greece’s own history with a fiat drachma is, owing to the Nazi occupation, one of the most harrowing in monetary history. We were reminded of that after the early edition of this editorial by a reader who brought to our attention the February 24, 2012, issue of Grant’s Interest Rate Observer. Its lead story on Greece includes a chart of what it called extreme quantitative easing, culminating in the 1944 price of a gold coin approaching quadrillions of drachma.

Whatever the outcome in today’s Greece, we are prepared to hazard a guess. It is that the feuds that are likely to result would be less bitter and more easily resolved were the euro and, for that matter, the drachma defined as a form of classical specie. The drachma apparently started as iron and moved, at its apogee, to gold and silver, much like the dollar at its apogee. We wouldn’t want to sound naïve; we understand what a long-shot it is. But our own view is that the exit of Greece from the euro represents an opportunity to re-establish the glory of Greece on the back of an honest drachma.