The attention of the media on the spread and on the markets these days seems completely excessive and out of place.

The spread, as everyone knows, is the difference in yield between Italian ten-year bonds and German bunds. That today October 19 ended at 314. When this gap widens it is an indication that investors are going to acquire more German than Italian ones. This also means that they have more confidence in the German economy than in the Italian one. However, this is a predictive and somewhat speculative confidence that can not be taken as an absolute value term because, first, the markets are extremely emotional and according to the fluctuations in the spread are strongly due to the movements of the CDS (Credit Default Swap) . Many buyers of BTP buy CDS without using BTPs but using CDSs not as a derivative of insurance coverage but as a pure and simple speculative instrument.

As for the markets in a broader sense, however, they are a “place” where large and small subjects make investment maneuvers, so even these do not thermometer the real economy of a country but only forecast maneuvers, also aimed at trying to get positive answers in the immediate, often taking advantage of the emotional component of the stock exchange system. To make it easy for the tools and a place where people and companies are betting for financial results can not be considered fully appropriate to indicate the actual state of the real economy.

It is therefore suspected that some play the spread to obtain economic and other advantages for political ends. The European Union actually fears the success of the government’s maneuver, as also claimed by Professor A. M. Rinaldi. Professor of political economy at the Link Campus in Rome, a student of Paolo Savona, and considered one of the leading economists for the government. With this maneuver, the current Italian government is going to subvert the dogmas so far imposed by European governance, with the aim of focusing on growth, employment and tackling poverty. If successful it would be a huge whammy for those who until now have professed different policies and do not accept any debate on these. The strategies desired and imposed by Brussels have not yielded results.

If this government succeeded, moreover reversing the current economic paradigms, it would be a defeat for Europe today and would have enormous consequences on its current and future status as well as on the upcoming European elections. This would create a precedent that other countries might feel more than legitimized to follow. All of this scares the European Union terribly as it is conceived today. Among other things, the policies of Brussels in all these years have had the effect of making Italy an open-air outlet, because we have never been activated the mechanisms of protection for companies of national strategic interest, what which instead was made both in France and in Germany. The fear of this ruling class of seeing its two-speed Europe overturned, of which the most advantageous is that of those in charge and who has built an ad hoc European house, is strong. This speaks volumes about the hysterical behavior of the markets and the many misplaced statements that have been felt these days. They are rather those statements that have made the bags lose and therefore the savings of the Italians. The European Commissioners, as unelected bureaucrats, should moderate the terms, seen and considered that they speak from the top of a charge of a certain prestige and often to open markets. Statements never heard before.

Then there are two last things to stress, even these significant of how you want to make the thinking of readers and voters go in one direction.

First of all it should be emphasized that an exit of Italy from the Euro is not conceivable because it would be a disadvantage for everyone, first among all the Germans. Germany uses a trade surplus higher than that of China, breaking all the EU rules, with the silent consent of all member countries. In this way they take advantage of a currency that for them is greatly underestimated thanks to the presence of countries such as Italy. In other words: if they still have Marco, they would not even export a match pack. If we came out of the euro, we would determine a collapse of the German economy. (cited by Prof. Antonio Maria Rinaldi) It also seems very serious that what Minister Savona said during a meeting with the foreign press in which he expressed the government’s willingness to make a verification every 3 months on trend of the maneuver to make any adjustments. This is the maximum guarantee that can be given to those in the European Union who fear that Italy is doing a maneuver


Alessandro Sicuro for  Sure-com America

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