Wednesday, October 26, 2011

Ciao Italia!

The focus of the current European economic debacle seems to be starting to shift from Greece to Italy. Today is also supposed to be a big day for policy as far as today is a "deadline" for the European leaders to come up with some sort of longer term solution to their current problems with getting sovereign debt issued at reasonable interest rates. (TIP: They won't)

Here is an article that provides an overview of the current situation at the ECB and Italy.

Incoming European Central Bank President Mario Draghi called for “immediate implementation” of the euro area’s rescue fund, warning that it’s up to nations to ultimately solve the sovereign-debt crisis. (Ed: True enough!)

Bank of Italy Governor Draghi, who takes over as ECB President on Nov. 1, also said that he sees “significant” downside risks to economic growth in the euro region as industrial output expands at a “very moderate pace.”

Draghi also called on Italian Prime Minister Silvio Berlusconi’s government to immediately implement austerity measures and carry out a planned review of public spending.

So apparently, even though the incoming ECB President is himself an Italian, he is just as ready to advocate a hard line on austerity for Italy as any other ECB moron that could have taken over the ECB Presidency.

Italy is looking like the next domino to fall in this European fiscal fiasco that Warren Mosler opined this week may ultimately ripple through Europe and ironically lead straight on ultimately to the mother country of all austerity advocacy, Germany, as in reality, none of the Countries in the EMU (including Germany) are currency issuers; they have all surrendered their monetary authority to the EU/ECB; which is sadly infested with persons who advocate for smaller fiscal deficits.

Arrivederci !


NeilW said...

Ultimately the savings of the Dutch and the Germans - created from borrowed money via their net-export position - have to be spent, eliminated by the cascade of bond defaults or accommodated by the ECB purchasing the debt for cancellation.

It's just a question of how many rounds of musical chairs it takes before they work that out.

googleheim said...

So we have the Italians being Cretons and the Greeks being Morons.

What a mixed up place this world is ..

googleheim said...

They also could start spending their US treasuries they hoard along with China to stimulate the USA ...

which would mean more Americans visting Europe and buying Eu

but that is too logical