Italy once more finds itself in the midst of a political crisis as the country awaits the election results from the relatively rich region of Emilia-Romagna near Milan.
Matteo Salvini’s nationalist Northern League is neck-and-neck with the centre-left Democratic Party (PD) which governs Italy in coalition with the anti-establishment Five Star Movement (M5S).
Luigi Di Maio, who led M5S to victory in 2018 at the cost of temporarily putting Salvini in power, has resigned this Wednesday following turmoil within the party after losing 20 MPs due to M5S entering into a coalition with PD.
Italy’s Prime Minister Giuseppe Conte has stated the election concerns the region alone and has no bearing on national politics, but speculation swirls.
Emilia-Romagna has been a left leaning stronghold for 70 years. A move to Salvini, described as anti-globalization, nativist and protectionist, may send shockwaves throughout the continent.
Many therefore are looking for any clues of how the election may go, with polls to close at 10PM Milan time. One such clue potentially being a sudden move in bitcoin:
Salvini is against the euro with the fragile coalition risking collapse which may bring him to power as he is currently ahead in polls.
If he does take charge in a country where Hitler-aligned Mussolini ruled with an iron fist, it may be a problem for the entire continent and the world as Italy could exit the European Union in what would be a shock far greater than Brexit.
Yet why are they thinking of turning to Mussolini-lite? What happened to bella Italia?
What Happened to Italy?
We can begin the story in the 90s when the country was roaring with booming optimism, or we can start it in 2007.
We have not seen a more awful chart for a western country. Milan’s stock index, with Milan being Italy’s financial centre, was roaring and roaring until a devastating plunge in May 2007.
The fall within months was worse than what bitcoin has seen, down some 75% with no recovery for a decade.
The lost 2010s, but why? Why such prolonged stagnation? Interest rates are at 0. Inflation is around 0.5%. GDP growth is a bit more volatile.
2012 to 2014 and even to 2016 was a pretty bad depression period for Italy economically, with some brief respite flirting once more with stagnation or worse in 2019.
The stories of so many young Italians leaving the country so told in just one image, but this is the end result, the question is why.
Italy’s current account surplus and trade surplus increased in November. Its industrial output rose slightly. It’s corruption index is 50 out of 100 compared to UK’s 70 out of 100. It’s competitiveness is 70 to UK’s 80. A surface outlook at the data really suggests the problem can only be one.
Italy’s tax burden is at a Scandinavian scale while the country hardly has a welfare system even comparable to the United Kingdom let alone Denmark or what some would call socialist France.
Italy’s tax burden is not far off from twice that of the United States, so where is all this money going to in a country that is hardly known for generous welfare?
The answer appears to be it is going to banks in considerable interest rate payments that amount to 30%, $200 billion, of Italy’s government revenue of $700 billion. For US, it’s less than 10% of revenue despite it having a far lower tax burden and despite it funding a mighty military which plenty call a welfare state in all but destructive name.
As such, Italy is stagnating for one reason and one reason only: too much debt. It is precisely why Japan stagnated too, and it is what America should expect as it ramps up its debt levels.
Banks however are very powerful entities so for the privilege of taking 30% of every tax paid by every Italian, they have turned the focus on the poorest, the most voiceless and the most defenseless through the control of the media and the political class by holding the financial strings.
So creating this fabricated rise of Salvini who despite being in government for months managed to achieve nothing and yet wants power and seemingly has them fooled through endlessly funded “marketing” to have the Italian people consider giving him such power.
He most certainly has no solution to the fact the older generation that votes for him spent so much money that now has to be paid back save for distraction by coyotely telling minorities to shut up first, and then so telling all Italians.
It is the trick they played last century when banks funded Hitler to by force shut up people after these banks stole their gold and in this process they used “democratic” elections to “legitimately” engage in a coup.
The actual solution however is dragging these bankers to congress or senate to explain in front of the world what role these interest payment have in money creation and why should it be the people or the government that pays them when the people or the government can be the ones creating such money without needing to pay anything.
Update: PD won with 51,36% against 43,73% for the candidate of Salvini’s League.