Ah, Italians. They just won’t toe the party line. Bless them. Now, they’re demanding the Italian central bank act in the interest of the country, instead of the European super state — as it does currently.
More on that shortly.
Let me reflect on a personal story for a moment…
One of the nice things about the Mediterranean countries is their justifiable contempt for authority and procedure. I can speak from personal experience.
Last year, I was in the queue to enter the European Union at Madrid-Barajas Airport. After the 24-hour flight from Australia, I approached the customs officer sweaty and tired.
I discovered my passport was blocked on order of Swiss authorities. This was certainly a shock for yours truly.
It went back to a little run-in at the Swiss border in 2016 (a long story). They conveniently forgot to mention a two-year ban on your editor entering the Schengen countries…
I was escorted to a small, empty room and told to wait. The clock ticked for a long time.
Isabel and Ema, my wife and daughter, have Spanish passports. They were on the other side already. A guard said it wasn’t a Spanish issue; it was the Swiss. There was nothing they could do.
Sigh. Another damn flight back to Australia so soon?
Eventually, I was escorted away to discuss the problem with the relevant person. She was a nice woman. I trotted out my Spanish skills and explained the situation.
‘Yes, your wife got in touch with one of the border guards on the other side,’ she said. ‘She’s in a bit of a panic.’
‘Yes, her phone’s in my bag. I couldn’t call.’
‘She’s saying you’re just here so your daughter can visit her grandparents.’
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‘Well, I have two options. One is to deny you entry. The other is to fill out this form and let you in.’
I held my breath.
‘I’m going to fill out this form. The Swiss are different to we Spaniards. So formal. So many rules.
‘This is Spain,’ she continued with a smile. ‘We’re more flexible. You speak good Spanish, too.’
And there you have it — banned from one EU country and let in by another.
God bless the Spanish and their contempt for bureaucracy, politicians…and the Swiss!
Perhaps it’s one reason why the EU is a failure. The various temperaments and languages and cultures are too different.
I prefer Spain.
For example, you can still light up the occasional cigarette in Spain without some health nut lecturing you to start living off spring water and broccoli immediately.
The Spanish live off lamb chops, bread and ham, and couldn’t care less about kale and quinoa. They’re on track for the best life expectancy anywhere!
Australia was like Spain once. Now I worry it’s a lot more like Switzerland.
That brings me to the Italians…
Italian gold for the Italians!
Italy is in recession. This is not news. There’s been little growth there for a decade.
The Wall Street Journal reports that Italy’s ‘ruling populists’ are pushing to seize control of the Italian central bank and its gold reserves.
The mainstream media is so saturated in bias that if a politician actually proposes something in the interest of the people, he’s dubbed a ‘populist’ or ‘anti-establishment’.
A ‘normal’ politician is supposed to toe the line of their corporate paymasters.
According to the Journal, ‘The parties depict the central bank as a symbol of a technocratic elite aloof from the needs of ordinary Italians.’
That’s because it is.
The Italian government has been forced to recapitalise Italy’s banks multiple times because of the disastrous loans they made.
That sucks taxpayers’ money away from the real economy and increases the government debt burden.
It need not be this way.
The Italian central bank or the European Central Bank (ECB) could buy these bad debts off the banks and solve the problem in a heartbeat. It’s what the Fed did in America.
Instead, the Italian economy is left to rot as the banks stay weighed down with bad debts and an economy with no growth.
The ECB is pinning interest rates so low that it will eventually wipe out the private banking sector in Europe — so it can assume full monetary control of the place.
It’s also fuelling a property bubble in Germany.
The Italians want to bring the central bank under the purview of the government — and hence answerable to the Italian people.
That’s where it belongs. Currently, not only is the central bank ‘independent’ (of accountability), it is also privatised.
Even a man as pro free market as Milton Friedman proposed the US Fed be made subordinate to the US Treasury.
Here’s the truth that the technocratic elite don’t tell you. Central banks aren’t needed. Their monetary policies are useless. Cutting interest rates doesn’t stimulate anything, except a lot of academic and mainstream BS.
If it did, shouldn’t the Italian economy be booming? After all, ECB head Mario Draghi hasn’t raised interest rates in eight years.
But Europe is going nowhere. The same is true of Japan, which has had low rates for 20 years.
What matters is the quantity and allocation of credit. These factors could easily be catered for with local, decentralised community banks funding local businesses and infrastructure.
There would no asset bubbles — the type of which happened before 2008 — despite these supposedly wonderful and clever things called central banks overviewing the system.
But there’s no power and privilege in that.