Greece has missed its big payment to the IMF (1.5 billion euros) and -- unless a last-ditch effort to secure a bailout is successful -- is set to miss an even bigger payment to the European Central Bank on July 20 (3.5 billion euros). In theory, this is a shock. Governments should be able to pay debts. Should we be worried about Greece going into default?

Unlike businesses, governments can change laws to appropriate funds from their citizens (we call that tax). This unique power is why government debt is seen as the safest asset class. If government debts aren’t repaid, it starts to look like the whole fabric of the global financial system is coming apart.