The Italian banking system is a “leaning tower” that truly could completely collapse at literally any moment. And as Italy’s banks begin to go down like dominoes, it is going to set off financial panic all over Europe unlike anything we have ever seen before. I wrote about the troubles in Italy back in January, but since that time the crisis has escalated. At this point, Italian banking stocks have declined a whopping 28 percent since the beginning of 2016, and when you look at some of the biggest Italian banks the numbers become even more frightening. On Monday, shares of Monte dei Paschi were down 4.7 percent, and they have now plummeted 56 percent since the start of the year. Shares of Carige were down 8 percent, and they have now plunged a total of 58 percent since the start of the year. This is what a financial crisis looks like, and just like we are seeing in South America, the problems in Italy appear to be significantly accelerating.
So what makes Italy so important?
Well, we all saw how difficult it was for the rest of Europe to come up with a plan to rescue Greece. But Greece is relatively small – they only have the 44th largest economy in the world.
The Italian economy is far larger. Italy has the 8th largest economy in the world, and their government debt to GDP ratio is currently sitting at about 132 percent.
There is no way that Europe has the resources or the ability to handle a full meltdown of the Italian financial system. Unfortunately, that is precisely what is happening. Italian banks are absolutely drowning in non-performing loans, and as Jeffrey Moore has noted, this potentially represents “the greatest threat to the world’s already burdened financial system”…
Forgive my ignorance but as previously asked, why can’t the central Banksters or the IMF, international Banksters, simply buy up the bad loans and bailout the ponzu scheme once again? Of course that would be after the “bail in” where they steal/transfer another chunk of private wealth for themselves.
It’s sad to say that my people have brought this on themselves by always electing technocrat Bolsheviks to positions of high power. This is the Governments fault they are faltering and it’s also the fault of the people for voting to join that rag tag bunch of communists in the Euro union. my people can’t seem to shake off the chains of dictators and Bolsheviks ruling over them. Italy is the only Euro nation where the people have hundreds of billions of stashed money invested in the banking system, and now the money will be stolen from them, this is all in part of there dumbed down ignorance of electing these Marxist Bolsheviks to power. They will, pay a very high price for there misdirection.