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Italian Yields Jump As Salvini Threatens To Crash Government

Italian Yields Jump As Salvini Threatens To Crash Government

Clearly emboldened by the EU Parliamentary results, where the League won a plurality of the vote in Italy, Matteo Salvini on Thursday sent BTP yields higher by threatening to crash the Italian government if the Five Star Movement doesn’t back his tax-cut plan.

BTP

BTP yields have been moving higher over the past two weeks as Salvini has brushed off Europe’s threats to fine Italy up to €4 billion over its refusal to rein in its debt and deficit-spending plans. This would be the first time the European Commission has fined a member state over violations of its fiscal rules.

But Salvini, who is now indisputably the most powerful political figure in Italy, isn’t backing down. He has remained defiant, even as Italy braces for the EU to initiate another excessive debt proceeding on Wednesday, when reviews of member states’ fiscal compliance are expected.

As the Telegraph’s Ambrose Evans-Pritchard pointed out in a column yesterday, Salvini has revived threats to initiate an Italian parallel currency – the so-called “mini-BOT” Italian Treasury bills that a Forbes columnist once warned was the “biggest threat to the future of the eurozone.” 

And with Salvini adding to the political chaos by taking the first tentative steps toward ousting Five Star from the ruling coalition, Italian bond holders will have only themselves to blame if they don’t anticipate more market-rattling political chaos, and position accordingly.

The Great Fossil Cycle and US: Story of a Family

The Great Fossil Cycle and US: Story of a Family

Last week, I published a post on how the economic decline of Italy led me to move to a smaller house, abandoning the mansion that my parents had built during better times. Complementing that post, I thought I could repropose a post I had published in 2017, reproduced here with some minor modifications. You can find more data about the story of the Bardi family on the “Chimeras” blog.

My great-great grandfather, Ferdinando Bardi. The story of the branch of the Bardi family to which I belong is inextricably linked to the great world cycle of the fossil fuels. (this painting was made by Ferdinando’s son, Antonio)

There was a time, long ago, when the Bardis of Florence were rich and powerful, but that branch of the family disappeared with the end of the Renaissance. The most remote ancestors of mine that I can track were living during the early 19th century and they were all poor, probably very poor. But their life was to change with the great fossil revolution that had started in England in the 18th century. The consequences were to spill over to Italy in the centuries that followed.

My great-great grandfather Ferdinando (born in 1822) lived in an age when coal was just starting to become commonplace and people would still use whale oil to light up their homes. He was a soldier in the infantry of the Grand-Duke of Tuscany and then of the King of Italy, when Tuscany merged into the newly formed Kingdom of Italy, in 1861. The family lore says that Ferdinando fought with Garibaldi in Southern Italy, but there is no trace of him in the records as a volunteer of Garibaldi’s army. He may have fought there with the regular army, though.

 …click on the above link to read the rest of the article…

Operation Gladio: The Unholy Alliance

Operation Gladio: The Unholy Alliance

Between the Vatican, the CIA and the Mafia: Overview of the book by Paul L. Williams

On the hot summer morning of Aug. 2, 1980 a massive explosion ripped apart the main waiting room of the Bologna railway station. Eighty-five people were killed and hundreds more injured. Though at first blamed on Italy’s legendary urban guerrillas, The Red Brigades, it soon emerged that the attack had, in fact, originated from within the ‘deep state’ of the Italian government itself.

The full nature of this secret parallel state would only come to light a decade later when the Italian premier, Giulio Andreotti, under questioning from a special commission of inquiry, revealed the existence of arms caches stashed all around the country and which were at the disposal of an organization which later came to be identified as ‘Gladio’.

The members of this group turned out to include not only hundreds of far-right figures in the intelligence, military, government, media, Church and corporate sectors, but a motley assortment of unreconstructed WW2 fascists, psychopaths and criminal underworld types to boot. And despite Andreotti’s attempts to airbrush the group as ‘patriots’ it appeared evident to much of the rest of the Italian polity that these seemed rather more like pretty bad folk indeed. Little did they know. Follow-up research by the likes of Daniele Ganser, Claudio Celani, Jurgen Roth and Henrik Kruger traced connections to similar groups spread throughout Europe of which all were found to be deep state terrorist organizations, and all of which were found, ultimately, to be subservient unto the highest levels of the CIA and NATO command structures.

 …click on the above link to read the rest of the article…

Default Or Exit: A Battle Between Italy And The EU Is Inevitable

Default Or Exit: A Battle Between Italy And The EU Is Inevitable

Conte Salvini Maio

There is a dual Italian crisis brewing in the European Union. On the one hand, it is a political, or even geopolitical, crisis. Italy is undermining the unity of the European Union; blocking the EU’s recognition of those behind the coup in Venezuela as the legitimate authority; preventing the expansion of sanctions against Russia; and even supporting the ‘yellow vest’ movement in France, which is arousing the anger of the French government.

On the other hand, the crisis is economic in nature. Italy is once more sliding into a recession (economic growth was negative in the country); Italian banks are again facing financial problems; and the business media has already estimated that the Italian economic crisis could blow up the entire European banking system.

There is a strong possibility that the EU’s leaders will soon be faced with a choice: try to save Italy (and the whole of Europe) from yet another crisis or set an example by punishing the Italian government for the country’s independent economic and foreign policies. In turn, Italian Prime Minister Giuseppe Conte’s government will most likely have its own dilemma to deal with: bow down and sell its principles to get help from Brussels or go all out and regain Italian independence. The choice will not be easy and either decision will be painful. Neither ending to this Italian drama could really be called happy. As this headline in The Telegraph quite rightly notes: “Crisis brewing in Italy will lead to default, exit from the euro, or both.”

Conte Salvini Maio
Italian Prime Minister, Giuseppe Conte delivers his speech during the confidence vote for the new government at the Italian Senate. In the picture at left vice premier Luigi Di Maio and right vice premier Matteo Salvini, Italy, Rome, June 05, 2018

 …click on the above link to read the rest of the article…

Italian Meddling at French Maidan: When Will Russia Be Accused?

Italian Meddling at French Maidan: When Will Russia Be Accused?

Italian Meddling at French Maidan: When Will Russia Be Accused?

Cutting diplomatic relations and sending one’s ambassador back home are acts associated with declaring war, which is what makes France’s decision to pull their ambassador out of Rome very unusual to say the least. The rhetoric from the French side even gives off a sort of “pre-war” aroma declaring that the Italians have supposedly made “unfounded attacks” against French policy regarding migration and EU economics, but the main spark that lit the flame of this decision to call back the ambassador is related to Italian meddling in the “yellow vest” protests.

The wildly diverse and bloody yellow vest protests are continuing throughout France with no sign of stopping anytime soon. It is important to note that all protest movements including those with yellow vests are organized by “someone”. There has never been a time where 10,000 people randomly all chose to simultaneously go clean their local park. But with talented organizers and some marketing 10,000 can be swayed to show up and clean said park no problem.

The driving force(s) behind the yellow vest protestors seems to be either unknown to the public or so radically diverse (there are many different groups with very different beliefs who are all on the “yellow” side) that there is no single actor driving this movement across the country.

Of course, by default there have been accusations that Russia is behind the chaos. When in doubt (and in the West) always blame Russia and never your own anti-populist policies bringing ruin to one of the most prosperous nations on Earth.

At this point there is now an official boogeyman for France to blame and surprisingly it is not Russia, but Italy as Italian Deputy Prime Minister Luigi Di Maio has met and openly been photographed with key players inside the yellow vest movement.

 …click on the above link to read the rest of the article…

Italy’s Gold enters the Political Fray. But who really owns it?

Italy’s Gold enters the Political Fray. But who really owns it?

Italy’s unpredictable political situation continues to throw up surprises with a controversial claim in national newspaper La Stampa this week that the country’s coalition government wants to sell part of Italy’s gold reserves to cover spending plans and to prevent the need to increase VAT in a forthcoming Italian budget.

While the claims by La Stampa are not really based on anything new, they still managed to cause an international media frenzy as they came a few days after Italy’s governing coalition launched verbal attacks on Italy’s central bankers and financial regulators.

Note that Italy claims to be the world’s third largest sovereign gold holder behind the US and Germany, with claimed monetary gold holdings of 2451.8 tonnes. Interestingly, unlike most countries where sovereign gold is owned by the State but managed by the country’s central bank, the Italian gold is officially owned by Italy’s central bank, Banca d’Italia (Bank of Italy), and not owned by the Italian State.

The Banca d’Italia furthermore claims that 1199.4 tonnes of the gold (or roughly half), is stored in the Bank’s gold vaults under it’s Palazzo Koch headquarters building in Rome, with most of the other half stored in the vaults of the Federal Reserve Bank of New York (FRBNY), and a small balance kept the Bank of England in London, and in an account of the Bank for International Settlements (BIS) in the vaults of the Swiss National Bank (SNB) in Berne, Switzerland. But without any documentary evidence or independent auditing or verification of any of its gold, especially the foreign held gold, these claims are impossible to verify.

 …click on the above link to read the rest of the article…

Salvini Proposes Seizing Control Of Italy’s Gold Reserves From The Central Bank

Salvini Proposes Seizing Control Of Italy’s Gold Reserves From The Central Bank

Italy’s populist de facto leader Matteo Salvini seems set on shaking Europe’s financial establishment to the core.

One day after the Italian deputy prime minister and leader of the League party, called for the elimination of Italy’s central bank and the country’s financial regulator, Consob, saying the two institutions should be “reduced to zero, more than changing one or two people, reduced to zero”, or in other words eliminated, and that “fraudsters” who inflicted losses on Italian savers should “end up in prison for a long time”, Salvini prompted fresh shocked gasps in Brussels and Frankfurt when he raised the possibility of seizing Italy’s massive gold reserves away from the country’s central bank.

“The gold is the property of the Italian people, not of anyone else,” Salvini said in comments to reporters on Monday, according to the FT.

The controversial comments, which were seen as threatening the “independence” of the Italian central bank, whose one-time head was none other than Mario Draghi, prompted Giovanni Tria, Italy’s economy minister, to defend the independence of the central bank.

Earlier in the day, Italy’s populists called on lawmakers to pass legislation stating that its gold holdings belong to the state, Bloomberg reported.

The gold ownership bill presented by euroskeptic lawmaker Claudio Borghi of the League adds to an already tense relationship between the Bank of Italy and the coalition government. It’s also sparked criticism from opposition politicians, and some national media argue that it may allow the government to raid the gold reserves to fund spending promises.

Borghi has rejected the accusation and said he’ll ensure Parliament has ultimate power. His concern is that ambiguity of ownership means that a victorious legal action against the central bank — for inadequate supervision, for example — leaves open the possibility of a claimant getting compensation in gold.

 …click on the above link to read the rest of the article…

France Recalls Ambassador From Italy After “Unprecedented” Verbal Attacks

France Recalls Ambassador From Italy After “Unprecedented” Verbal Attacks

The diplomatic row between France and Italy is escalating. More than half a year after Italy summoned the French ambassador over Europe’s migrant row, on Thursday France one-upped Italy when it announced it would recall its ambassador to Italy, citing “outrageous” verbal attacks, repeated “meddling” in its domestic affairs and “unacceptable” provocations.

La France rappelle son ambassadeur en Italie “après des attaques” “sans précédent” (Quai d’Orsay) #AFP

The French foreign ministry said the decision was taken following a meeting between Italy’s deputy prime minister Luigi Di Maio and leaders of the French Yellow Vest protester movement, trumpeting his support for the grassroots protests in defiance of President Emmanuel Macron.

“This is unprecedented since the war,” the foreign ministry said in an emailed statement on Thursday. “Having disagreements is one thing, but using the relationship for electoral purposes is quite another.”

Luigi di Maio, Italy’s Deputy Prime Minister and leader of the anti-establishment 5-Star Movement hailed the “winds of change across the Alps” yesterday on Twitter after meeting with Yellow Vest activists Cristophe Chalencon and Ingrid Levavasseur.

 …click on the above link to read the rest of the article…

How An Italian Debt Crisis Could Take Down The EU

How An Italian Debt Crisis Could Take Down The EU

Plagued by another run of bank bailouts and simmering tensions between the partners in its ruling coalition, Italy’s brief reprieve following the detente between its populist rulers and angry bureaucrats in Brussels is already beginning to fade. As Bloomberg reminded us on Monday, Italy’s $1.7 trillion pile of public debt – the third largest sovereign debt pool in Europe – is threatening to set off a chain reaction that could hammer banks from Rome, to Madrid, to Frankfurt – and beyond.

Italy

Just the mention of the precarity of Italian debt markets “can induce a shudder of financial fear like no other” in bureaucrats and businessmen alike – particularly after Italy’s economy slid into a recession during Q4.

Italy

While much of Italy’s debt burden is held by its banks and private citizens, lenders outside of Italy are holding some 425 billion euros ($486 billion) in public and private debt.

Bank

The Bloomberg analysis of Italy’s financial foibles follows more reports that Italy’s ruling coalition between the anti-immigrant, pro-business League and the vaguely left-wing populist Five-Star Movement has become increasingly strained. Per BBG, the two parties are fighting a battle on two fronts over the construction of a high speed Alpine rail and a legal case involving League leader Matteo Salvini over his refusal to let the Dicotti migrant ship to dock in an Italian port last summer.

After M5S intimated that it could support the investigation, the League warned that such a move would be tantamount to “blackmail” against Salvini, whose lieutenants have been pushing for him to take advantage of the party’s rising poll numbers and push for early elections later this year. However, Salvini has rebuffed these demands, warning that there’s nothing stopping Italian President Sergio Mattarella from calling for a new coalition instead of new elections.

 …click on the above link to read the rest of the article…

Italy Building Anti-EU Axis

Europe Likely in Recession Now: Germany, France, Italy Production Collapsed

German, French, and Italian industrial production collapsed in November. Italy GDP is negative for 3rd Quarter.

Italy GDP

Italy’s GDP was negative for the third quarter. Gross domestic product (GDP) in the euro zone’s third largest economy fell by 0.1 percent in July-September due to weaker domestic demand, statistics bureau ISTAT said, the first decline since the second quarter of 2014.

Based on industrial production, Germany and France will soon follow.

Germany Industrial Production

Analysts actually expected German IP to rise. Go figure.

German industrial output fell unexpectedly by 1.9 percent month-on-month in November 2018, missing market expectations of a 0.3 percent rise and following an upwardly revised 0.8 percent drop in October.

France Industrial Production

France’s industrial production fell 1.3 percent from a month earlier in November 2018, reversing an upwardly revised 1.3 percent growth in October and missing market expectations of a 0.2 percent gain.

Italy Industrial Production

Italy’s industrial production slumped 1.6 percent from a month earlier in November 2018, much worse than market expectations of a 0.3 percent decline and following a meager 0.1 percent gain in October.

Brink of Recession or Already In Recession?

The water levels of the Rhine are low and Germany may be flirting with recession. The two are connected, many argue. The Rhine is a key artery for the transport of many goods into and through the country, particularly for the chemicals and energy industries.

But praying that the water rises and all will come good might not be enough. Just as the idea that negative growth in the third quarter was due to the temporary hit of emissions testing rules on an already troubled car industry, the one-off excuses are starting to wear a bit thin. There is a grander slowdown facing Berlin, and, as the eurozone’s economic powerhouse, potentially the rest of its members too.

…click on the above link to read the rest of the article…

Italy’s New Government Eats Its Words, Joins Bank Bailout Club

Italy’s New Government Eats Its Words, Joins Bank Bailout Club

Well, that didn’t take long. And whatever happened to the Eurozone’s new bail-in rule?

Italy’s government, in its eighth month in power, has already bailed out a bankrupt bank, mid-sized Banca Carige, with public funds. If approved by European Commission and the ECB, it will be the fourth Italian bank rescue in just over two years. As Italian daily Il Sole 24 Ore points out, Italy’s populist government has adopted virtually the exact same playbook to save Carige that was used by its predecessor in the previous three resolutions:

The draft of the new Carige decree is a carbon copy of the one used by the Gentiloni Government for the bailouts of Monte dei Paschi di Siena (MPS), BPVI and Veneto Banca — identical in every detail from the rules on state guarantees to the mechanisms adopted…

It took just eight minutes for Italy’s coalition partners, Five Star and the League, to renege on their flagship promise never to bailout a bank, reports Bloomberg. The new decree will allow the government to guarantee Carige bonds up to a maximum value of €3 billion, making it easier for the lender to retain access to the funding market. The government also wants the option, if necessary, to recapitalize the bank by injecting as much as €1 billion into its coffers despite having lambasted the previous government for doing the exact same thing with MPS.

It’s not yet clear whether the proposed rescue of Carige will contravene EU state-aid rules, which are supposed to impose strict conditions on the “precautionary recapitalization” envisaged by the government. Carige is already under the administration of ECB-appointed administrators after failing to agree to a €400 million capital increase at the end of last year. So if there are any issues it should be easy for European Commission or the ECB to stop the bailout dead in its tracks.

…click on the above link to read the rest of the article…

ECB Takes “Unprecedented” Step Of Putting Italy’s Banca Carige In Administration

Investors who had hoped that the resolution of Italy’s budget showdown with the EU would mark an end to a volatile period for Italian bonds and stocks were disappointed Wednesday when fears about an Italian banking crisis reemerged after the ECB appointed a slate of temporary administrators to oversee troubled Italian lender Banca Carige after nearly its entire board resigned.

Earlier on Wednesday, Consob, Italy’s market watchdog, said it had suspended trading in shares of Banca Carige for the session following a request by the bank, according to Reuters.

European bank stocks dropped while bonds rallied as fears about softer-than-expected factory orders across the Continent were compounded by the developments in Italy (which proved an exception to the trend of weak PMIs).

Banca

Fabio Innocenzi, Pietro Modiano and Raffaele Lener have been appointed as temporary administrators while Gianluca Brancadoro, Andrea Guaccero and Alessandro Zanotti have appointed as members of the surveillance committee.

The “unprecedented” move – as Bloomberg called it – follows a failed attempt to raise some 400 million euros last month after the Malacalza family, the billionaire shareholders who control nearly one-third of Carige, abstained from a vote on a turnaround plan, which sought to fill the capital hole left by the fraud scandal.

Carige

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The European Project Comes to an End

The European Project Comes to an End

The end of the EU and the Balkans as China’s foothold in Europe

Though the end of the European Union is inevitable, the proponents of a further integrated or federal superstate are busy making a last effort to achieve their goal. The opposition against the project is mounting with every day. Europe is suffering from economic stagnation, and is facing a demographic calamity.

The pro-European establishment’s last hope was the newly-elected French President Emanuel Macron who was to revive the economy and integrate the European Union under French leadership. Gefira was of the opinion that all these expectations were misplaced. The once great nation is broken beyond repair. France’s problems are much worse than those of Italy. Though Italy has a higher debt-to-GDP ratio than France, France has a larger budget deficit, and the difference is that while Italy has a trade surplus France has a trade deficit, so the country cannot pay for its imports.

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  • European Project Comes to an End.
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While the Italian “populist” Mateo Salvini is earning the nation’s respect, Emmanuel Macron’s popularity is at a historic low. All of France is engulfed by riots, civil unrest and looting. In city after city, village after village, protesters have been clashing with the police for weeks now while President Macron has nothing to offer to appease them, unless he violates the budget deficit boundary of 3%.

Like the Soviet Union once was, France is a sizeable social-multicultural experiment, and like the empty shops in communist countries, the demographic changes in France are visible in every section of the society, but nobody dares to name them. 

…click on the above link to read the rest of the article…

Macron Heralds The End Of The Union

Paul Almasy Paris 1950

The concept of the EU might have worked, but still only might have, if a neverending economic boom could have been manufactured to guide it on its way. But there was never going to be such a boom. Or perhaps if the spoils that were available in boom times and bust had been spread out among nations rich and poor and citizens rich and poor a little more equally, that concept might still have carried the days.

Then again, its demise was obvious from well before the Union was ever signed into existence, in the philosophies, deliberations and meetings that paved its way in the era after a second world war in two score years fought largely on the European continent.

In hindsight, it is hard to comprehend how it’s possible that those who met and deliberated to found the Union, in and of itself a beneficial task at least on the surface in the wake of the blood of so many millions shed, were not wiser, smarter, less greedy, less driven by sociopath design and methods. It was never the goal that missed its own target or went awry, it was the execution.

Still, no matter how much we may dream, how much some of the well-meaning ‘founding fathers’ of the Union may have dreamt, without that everlasting economic boom it never stood a chance. The Union was only ever going to be tolerated, accepted, embraced by its citizens if they could feel and see tangible benefits in their daily lives of surrendering parts of their own decision making powers, and the sovereignty of their nations.

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