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Well, Sorta

Italy must roll over old debt and finance new debt equal to 24pc of GDP over the next year (ECB data), and do so at rocketing borrowing costs. No other eurozone state is remotely close.

It’s true, and yet. Traditionally – and I’ve no idea how true this is now – Italian households have not carried much mortgage debt. Housing tends to be inherited (an effect of a stable population over the generations). Therefore much of household savings has been into Italian Treasuries. Owing interest to the country’s own households is different from owing it to foreigners.

That might well not be enough but it is rather different from the position of many other countries.

Which leads to a surmise – and it’s no more than that, a surmise. Which is that countries always do test the outer limits of macroeonomic possibilities. But that what those limits are depends upon the microeconomics of the underlying structure. What might be a disaster in one place can be shrugged off in another.


Doesn’t stop places then going over those local limits, just means that the limits are locally determined.

14 thoughts on “Well, Sorta”

  1. Bloke in North Dorset

    Isn’t that the position Japan was in in the late ’80s and ended up with 30 years of stagnation because of no external pressures to reform?

  2. Italy has always had debt problems. Right from its unification. It was constantly having to restructure at the end of the 19thC and its adventures in Africa and involvement in the Geeat War were supposed to boost its territory and cashflow.

    It was effectively broke under Mussolini, but he hid that fact and again his adventurism in Africa and Balkans was supposed to help.

    Even the economic miracle of the 1950s and 60s was fuelled by debt. It catapulted italy up the economic league table but the underlying threat never went away.

    If you ask “most” Italians ( ie Northerners) they’ll blame it on corruption in Rome and having to prop up the Third World bottomless money pit in the South.

    Kind of like their version of the NHS in many ways.

  3. Owing interest to the country’s own households is different from owing it to foreigners.

    Perhaps not if your central bank is subservient to and bound by the rules of an even more central bank in Frankfurt/Main.

  4. Some Italian friends of mine refused to believe the value of my quite modest 1960s house, because their prices are so much lower. Among those friends they have been able to buy properties far more lavish than I have, despite their salaries being less than half mine.

    Plus the fact that they all cheat as far as they can on paying any tax.

    And, as a Brexiteer, let me point out that they have benefitted hugely from EU ‘largesse’, i.e. UK contributions.

  5. Davide Oneglia from TS Lombard said Meloni still has good odds of escaping a “fully-fledged ‘Truss moment’”

    Liz Truss moment, i.e. a coup organised over a period of months by an Indian billionaire, various Davos aligned backbenchers and the central bank, with air cover provided by the scum media.

    The normal punishment for that would be hangings all round.

    Liz Truss seems to be either too thick to have worked out what they did to her, or so craven she’s accepted her political assassination at the hands of her own party for fear of what remains of her political “career”. Such as it is.

  6. You see, children, Liz Truss had a “Liz Truss moment”.

    It’s all very complicated, but that’s why we must not do irresponsible things such as try to make Britain more competitive than the EU.

    We must only do responsible things, such as spend billions of pounds we don’t have on rapefugees so your daughter can no longer safely walk the streets in her own town.

    This is the Conservative consensus, and if you don’t like it you’re a dangerous extremist or a silly little charwoman like Liz Truss and the other poors who think they’re still going to be allowed to own cars.

  7. BiND
    Take two countries, e.g. UK and Japan, but could be anywhere.
    One has 0.2% GDP growth, and 1% population growth.
    The other has 0% growth and 1% population decline.
    Where are people getting richer?

  8. philip – is one of these countries legally obligated to massively reduce its carbon emissions (i.e. economic activity) while growing its population by over a million low quality migrants every year?

    Our cake keeps getting smaller, and the government keeps inviting people you don’t know to come enjoy a slice. And it’s all funded on the never never by writing cheques on behalf of your children and grandchildren. While they simultaneously write laws that ban the production of cake.

    Eh, where’s the growth going to come from? Beeg Eeshoo vendors? Infosys? Will we all get jobs as grouse beaters and manservants?

  9. Downing Street is considering a tax cut for five million high earners next year to galvanise Tory voters after suffering historic by-election defeats in two “safe” Conservative seats.

    The threshold for paying the 40 per cent higher rate of income tax could be raised in an effort to plot a path to re-election despite polls predicting a Labour victory

    But when Truss/Kwarteng propose tax cuts it’s instant Armageddon.

    Anyway it’s all a load of bull. He won’t do anything this fiscal year and even if he tries next year come November Chancellor Reeves will simply reverse everything with immediate effect taking her cue from Jeremy Hunt last October.

  10. Downing Street is considering a tax cut for five million high earners next year to galvanise Tory voters after suffering historic by-election defeats in two “safe” Conservative seats.

    Anyway it’s all a load of bull. He won’t do anything”

    John, you are right.

    The only rational conclusion one can come to is that they don’t want it, they’ve happily ceded defeat already.

    Sunak and Starmer – whatever the various squeals of “if you don’t vote for us, it’ll be worse” – are singing from the same hymn sheet. Sunak/Starmer’s sponsors don’t care who wins, as long as neither of them change their message.

    Sunak knows what his job is, he’s no fool. As Steve said above, the coup against Truss was unambiguous. Hence, Sunak would rather lose than do what it takes – ie, rescind the 2008 Climate Change Act and all the rest of the supra-nationalist corporate-Marxist drivel he’s pursuing – and that could otherwise guarantee the Conservatives victory next year.

  11. Amusingly enough, the Labor Premier of Queensland has publicly said she won’t seek to make a treaty with the abos. She’s blamed this on the Liberals of course.

    Perhaps this was caused by Queensland having the strongest NO vote against the ‘voice’. I’d always gained the impression from the media that I was the sole voice of sanity in a Marxist menagerie.

    One does wonder how long this will last. I’d guess until after the next election. But it’s good to know that we gained something from the referendum.

  12. why weaken a perfectly good rant by telling a lie in the middle of it?

    CORRECTION : in a previous rant, we may have referred to Rishi Sunak as an Indian billionaire. We would like to take this opportunity to correct the record, and state that he is also a flamingo-butty, a Prancing Pierre, a hinge-sniffer, and a midget.

    Rishi Sunak looks like a boy who won a Blue Peter competition to be Prime Minister for a day.

    Steve apologises for any distress caused by this unfortunate misunderstanding.

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