Who will borrow when they can't make the payments on the debt that they have already? The math alone calls for a system reset, a debt jubilee.

Investors are already losing... in a rigged monetary casino that rewards usury, speculation, and currency manipulation while looting main street.

There is a moral principle that debts should be honored. That is, debts between businesses that buy and sell real products, not bundled ponzi schemes, debts between individuals, between friends and businesses that know each other to be rational and moral, debts based on investments where there is a rational expectation of return.

There is also a moral principle that unjust debts should be cancelled, and usury legislated against. Debts that are 'odious', debts based on fraud, debts to dictators, debts arranged by oligarchs without the consent of the general population (the 99 percent who have been left out of the equation), debts based upon compound interest upon compound interest, that should have been written off long ago, the debts need to be cancelled in a general jubilee. Think outside the box. It's time for a jubilee.

However, outside of the EU, the UK would not benefit from the free movement of its goods and services across the border. Nor would it have any swift redress to any trade ‘obstacles’ that could arise. This might cause more damage to UK exports to the EU than could be offset by a decline in the currency (which would anyway impact with a delay). Faced with tariffs, quotas or simply higher costs for accessing EU consumers, goods and service providers in the UK would have to evaluate shifting some operations to within the single-market.

Whether attempting to engineer (but managed) high inflation as a solution to high public debt is a good thing or not is a matter of opinion.

Ultimately, Britain will have to look East and West as you recommend and this would be a good thing too. There is an argument that the UK is too reliant on the EU, a region whose economic importance is set the wane in the coming decades. It could be that it is time for the UK to move on and to seek pastures new. However, this doesn’t change the fact that in the first instance, there will be pain to be endured if it quits the EU prematurely.

In European politics, the game is ever-closer-union, designed to avoid a fourth major Franco-German conflict (look it up, they were at before WW1 and WW2). The Euro currency area needs fiscal integration to function and be credible, inevitably political integration is required to achieve that. Britain hasn't and won't sign up to the Euro for those reasons. In pure economic terms, a single currency makes sense if the fiscal side is in place, the euro crisis (such as it is) exists because they haven't implemented it properly.

For Britain, your analysis isn't worthy of the name. You say "UK exports would tumble, the pound too." Erm, if the pound tumbles our exports (such as they are) become more competitive and attractive. Hard to see how that would reduce employment in the UK.

Then you say "Inflation and unemployment would likely rise." well, inflation (all things being equal) is likely to rise but with our debt levels that is no bad thing if managed. As for unemployment, tell me, what would all the companies recently relocated to Ireland do when corporation taxes are harmonised EU wide?

An English speaking, well-trained workforce in the same time-zone with geographic proximity doesn't need to sign up to ever more detailed anti-competitive regulations to survive. Look East, look West, look to South America, look to Russia, the Commonwealth.

If that's checkmate, you don't understand chess.

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"The D-Mark belonged to an era where there was more security, more stability, and more growth"
I like that a lot.

I still have one in my pocket, remembering me of much better times, when I did trust the central bank.

A more appropriate example of behavioural finance in the current situation might be loss aversion amongst European politicians who have invested huge amounts of political capital in the euro-project over the past half century and are trying to do everything possible to save it, regardless of the social and economic consequences for, say, the 45% of young people in Spain whose lives are being ruined whilst they try to jobs that don't exist.