In the U.S., QE and ZIRP policies implemented by the Federal Reserve over the past nine years have resulted in a massive divide between the halves and have nots, and at a disparity not seen since just before the 1929 stock market crash. In fact, since the central bank chose to backstop the banks and stock markets with tens of trillions of dollars of virtually free money, the wealth redistribution from the Middle Class to the Rich has been the highest in American history.
However the story in the United States pales in comparison to what has occurred for the PIIGS economies of Southern Europe since their central bank went even further by taking interest rates to negative territory. And because of this, one country has already filed the paperwork to leave the Union and it appears another may be soon be following behind them as Italy debates on whether to leave the Euro currency, or the EU altogether.
The possibility of Italy’s exit from the eurozone has bas been raised in the Italian Parliament, as politicians try to come up with ways to tackle Italy’s spiraling public debt, which reached 132.6 percent of GDP in 2016.In early July, Italian parliamentarians from the Five Star Movement held a seminar in the Chamber of Deputies to discuss Italy’s economic situation. They discussed the eurozone’s default mechanism, strategies to restructure sovereign debt, parallel payment systems as well as the possibility of leaving the eurozone.The debate signified the first time that the Italian Parliament discussed the “Italexit” option, a topic which had been “taboo” until recently, the Italian press reported.Financial expert Marc Friedrich told Sputnik Deutschland that a return to the lira would benefit Italy, which is struggling like never before with record high levels of debt and unemployment.“The countries of southern Europe would be a lot better off with a sovereign currency than with the euro,” Friedrich said.“These countries will never see shoots of recovery while they are in the eurozone and the interest rate limitations set by the European Central Bank (ECB). We wrote this as early as 2012 in our first book, ‘Der groesste Raubzug der Geschichte,’ (The Greatest Robbery in History). We see that the euro does not work. That is why I can only emphasize that Alberto Bagnai of the University of Pescara is right.” – Sputnik News
If European countries are left with the choice of being proactive against the dying Euro, or reactionary in simply waiting for it to fail, then that is not really a difficult decision since waiting for the shoe to drop will only mean those first out the door are most protected. And with the populist movement going on in Europe bringing Italy to the best political situation they will have in decades to make their decision on whether to ditch the Euro or outright leave the Union, now may be their only chance as it is always better to ride the winds of change than to try to fight them without the ammunition to stand on your own.
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