The ECB has made available 498 billion euro to European banks at 1% for three years. At the end of February another mega loan of 400 billion is coming up at the same conditions. The declared aim is noble: to get the economy to take off again with financing to the companies. The money is obviously ours, paid by the increase in inflation and the removal of facilities provided by the State to the real economy. I’d say in passing that the banking system is basically parasitical and without a productive fabric, it wouldn’t exist. At least the bankers could play at Monopoly with Monti and Draghi using pretend banknotes.
898 billion euro is a colossal sum. The small and medium enterprises should thus take kangaroo-sized leaps. Their financial woes are finally over. And go off to the banks for an overdraft, a temporary loan, a tiny bit of financing, to pay Equitalila, to be at least able to pay out the thirteenth month a month late. I seem to be able to see them, sole traders, company bosses, owners of small companies, joyful like an Italian on an outing, running to the clerks at Unicredit, IntesaSanPaolo, Monte dei Paschi di Siena, that together have withdrawn about 35 billion from the ECB in January, to see the usual genteel refusal with the usual unctuous regretful smile. The banks are obviously hanging on to (our) money. Did anyone have doubts about that? The banks will invest the money in State bonds, that will pay out 6 to 7% and to cover up the investments they made by mistake that have left them with no liquidity.

...

For the creditors, the value of a public bond is considered to be intangible. If the State that has contracted the debt doesn’t pay, well - let it go to hell. It ends up in default. In principle, the value of a BOT is no different from that of any share of a company quoted on the Stock Exchange. Anyone who buys shares in Fiat or ENI knows that it can go up or down. He doesn’t ask for the intervention of the IMF or the ECB. It’s part of the game. The economy of a State is based on many variables, a GDP that can get bigger or smaller, a budget deficit or surplus, and unpredictable factors, like natural disasters or wars that can bring it to its knees. Anyone who buys the shares accepts the risks. The same should apply for those that buy BOT. If Formigoni, for example, has bought millions of euro’s worth of Greek bonds that today are worth 60% less, the responsibility is his, not the Greeks. (But why is the Region of Lombardy investing in shares? Does the Court of Accounts know how to respond?)
Anyone who buys public debt takes on the risk of its devaluation. With this rule, the risk would fall mainly on the buyer, and in particular on the banks that have hundreds of billions of euros of debts, to whom one could cynically say “No one forced you” or metaphorically “it’s your own f..king business!". This approach would reduce the use of debts to keep the economies of sick States on their feet. The public bond auctions would be practically semi-deserted. And it would be a benefit for the planet that is raving about “growth” without limits supported by endless debt. In 2012, 11,000 billion in public bonds will fall due in the world. Who will buy them?
A wife, tired of seeing her husband turning over and over in his bed for a debt owed to the neighbour, opens the window and shouts “Giovanni, my husband doesn’t have the money and he’ll never have it!” And then to her spouse: “OK, now the problem is his!” In the French novel "“La Guerre des boutons" {War of the Buttons}, two gangs of lads steal buttons from each other as trophies of war. The one with the most buttons is the winner. The final battle is won by the lads who decide to fight naked. A debt can be cancelled or restructured. The responsibility also lies with the buyer. They will never give up (but is it in their interests?). Neither will we. See you in parliament unless they do an electoral law that prevents that.

The ECB has lent 500 billion euro to the European banks at one per cent interest for three years. Pratically for free. It’s done that to get Europe to take off again. To allow the banks to reopen the taps and to finance the real economy for the companies that are closing down at the speed of light. As my youngest child, Ciro would say “it’s a proper barbatrucco {Barbapapa trick}”. Money from the ECB isn’t born under a cabbage plant, it’s guaranteed by the states of the EU. Basically it’s our money. The banks have to be saved. They have a liquidity crisis and they are not even lending money to each other. Furthermore, they have billions of uncollectable credits and various financial rubbish that sooner or later they’ll have to write off. 500 billion is a lifesaving anchor and in fact there’s been a queue of bankers to get the loan just like at the end of season sales. Banks however, act like banks. It’s in their nature to practise usury. Capital is nvested where the return is highest. Giving money to a company in difficulty or to a start up is a risk. Buying public bonds is a bit less risky. A whole State has to go bust. So it’s probable that the banks will buy the State bonds of the PIGS, the ones with the highest interest rates, from 6 or 7 % upwards. Guaranteed net earnings. It’s also a noble gesture. The loan agreed with the ECB would cover all the needs of Italy and Spain for the whole of 2012. Europe would be saved. However in this conjuring trick there’s something that doesn’t add up. So as to save us and to place the public debt, we have to pay really high rates of interest to the banks with money loaned by us through the ECB. The same banks, starting with the French and German ones, that have sold Italian and Spanish bonds with open hands in the year that’s gone by. And now that they’ll buy them back with interest rates that have been multiplied by five. Reason gets lost in this labyrinth. In this Giro di BOT {Roundabout of Italian Treasury Bonds} Why give interest to private banks that are buying our debt while we are lending them the money? Let’s buy our own debt, with the Treasury or the Bank of Italy, at least we’ll be paying the interest to the State. They will never give up (but is it in their interests?). Neither will we.

The Monti Government is like an onion . The outside layer, the most visible one, is the ECB. Thus the EU government. Remember? Just a month ago, Italy was at risk of causing the implosion of Europe, the United States, China, the whole world, if the spread were to go above 500 points with the Bund and interest rates on State bonds over 7%. Those are things that did in fact happen even with Monti, the Bocconi-guy, the man of “The Presidential Hill”, but without consequences apart from the taxes. Thus a Government of Bocconi-guys . The third layer is made up of the banks, that were at risk of seeing the tens of billions of euros worth of Italian stock purchased, becoming waste paper. Thus government of the banks , especially the French banks doped with BTP State Bonds. The fourth layer of the onion is Banca Intesa, the biggest bank in the country. Finally a Banca Intesa Government with two leaders at the very top level like Passera and Ms Fornero . Both with a very respectable CV in favour of the workers. There’s been a change from the government of Mediaset’s private TV channels to that of Banca Intesa. Nothing has changed except for the direct beneficiaries.
Beppe Scienza in his Passaparola explains to us who are Passera and Ms Fornero (nicknamed Frignero).

Intervention by Beppe Scienza, mathematician and economist

Corrado Passera, the man of the banks
I’m Beppe Scienza and I teach in the Maths department at the University of Turin. For a few years, in fact for a few decades, I’ve been dealing with savings and supplementary social security. This government, presented a bit like a government of Bocconi-guys, about whom there’d be so much to say, because on this very topic of savings and Bocconi-style supplementary social security, they keep banging on about the worst products and about the worst characters in the sector. Actually, rather than a government of Bocconi-guys, it’s more like a government of bankers and given the presence of two characters like Corrado Passera and Elsa Fornero, a government of Banca Intesa. I’m wondering whether the meetings are held at Palazzo Chigi or directly in the Milan HQ of Banca Intesa San Paolo. But this is normal. Meetings can be held anywhere. It’s policy that is truly worrying and worrying for the future. Because these characters Corrado Passera and Elsa Fornero have a past that bodes ill and they have already taken some decisions. I’m just going to deal the topics of savings and supplementary social security, that just don’t seem to be under consideration by the citizens. I want to say something about Corrado Passera, not so much about the Alitalia affair in which he definitely stuck to the line of the Berlusconi government, but to take a tiny step back. He was made Head of the Post Office in 1988 and he stayed there until 2002 and it’s true that he sorted out the balance sheet of the Post Office. I can assure you, Passera was not stupid. However, how did he sort things out? By creating Banco Posta {the Post Office Bank} The Post Offices ... If you go in you see more desks for finance than for postal products, in fact, it turns out that anyone wanting to send something by registered post or send a package, feels a bit like a fish out of water. Banco Posta has transformed the Post Office into a festival of financial products, mostly terrible ones or anyway bad ones, definitely mediocre ones, mostly getting rid of the “buoni fruttiferi postali” {post office securities} and certainly increasing revenues for the Post Office, but playing on the trust that people used to have in the Post Office, because they were used to the post office securities with which they could never lose anthing. Even now you cannot lose, because even though they are a bit flaky, not exciting, however, the post office securities continue to be the only product together with the current accounts and the bank deposits, where you can never lose what you have put in and you can take out the money any day. Instead they have been ousted. By everything and by worse stuff. That is by structured bonds, pension funds, collective investment schemes, life insurance policies. This is all stuff now sold by the Post Office, thanks to the work of Corrado Passera and his creation of Banco Posta, and thus just for this past life, things are not good. In 2002, Passera left the Post Office and went to Intesa San Paolo. Intesa San Paolo, the top Italian bank when counting the number of cash desks, perhaps it is no worse than the others, but it is certainly specialised in passing on to its customers savings and supplementary social security products that produce earnings for the bank, and not for the customer, including some tremendous things like life insurance policies that trap you for a year. You’ve got some money available and you take out a life insurance policy and for a year the money is blocked. Great. This is lovely. These are products of Intesa San Paolo and of other banks as well.
So where has Passera come from? This creates some perplexity and prospective that is confirmed by one of the first things, put about as an anti-tax-dodging regulation: the battle against cash. What is the battle against cash? It’s an old war-horse of Italian banks. For a few years, for 7 or 8 years they keep on saying that too much cash is in circulation, that we have to pay with electronic money or suchlike. These are all things that are repeated by economic journalists like parrots. Any idiot thing put out by a bank’s press office is repeated on their pages. To start with, this is not true. Even aboad, for example in Germany, there’s a very high usage of cash. A study carried out last year by Deutsche Bundesbank, the German central bank, found that 82% of purchases made by Germans, take place using cash. The German national bank finds nothing wrong with this, in fact it considers it to be logical. It says: “It is logical for small sums of money, for various things you need cash, it’s logical, no here no!” We have got to the point at which this Government has decided, then now it is going back on this in part, that pensions greater than 500 Euro are to be paid, not in cash, but as a credit on a current account. Just to think that the pensioner with a pension of 700 Euro who goes to the Post Office and takes out 730 Euro, is laundering dirty money, is a bit strange. Why is there ths battle against cash? Well, because the banks are making money on all elelctronic payments. They make money in two ways: 1)the most immediate one, the commission they get, and the commission also on the bank machines, the commission on the credit cards that can be up to 4% and in fact the Confcommercio {Chamber of Commerce} is against this prohibition on paying in cash, because every time the shopkeeper takes a payment with a credit card or using another method, a part of that goes to the banks. Then there’s another point: that the banks are happy for there to be money left in the current accounts rather than having all the banknotes in your wallet, becuse in that way they have financing that costs them nothing, because they pay no interest on the current accounts and the banks are hungry for money at this moment of crisis, and it’s difficult to get money because among other things, they don’t have the trust to lend to each other.

Fornero means trust in pension funds
The point is that when I use cash to pay in a shop, the bank gets nothing from this. I take the banknotes and give them to the shopkeeper and I pick up the goods. The bank wants to earn something even on this! Now let’s look at another character in this government, Elsa Fornero, who, as well as being a Minister, also wants to devote herself to other activities, like being an actress, specialised in tearful scenes played not too well! Elsa Fornero also comes from Banca Intesa where she was on the Supervisory Committee. Before that she was in the Compagnia San Paolo, a banking foundation and in one of its offsprings: CERP, {centro di ricerca sulle pensioni = pension research centre} near Turin, also financed by Compagnia di San Paolo. For now Fornero is busy doing a bit of killing off of pensions and pensioners. Unfortunately, I expect it’s a severe attack on the TFR {lump sum payment taken on retirement} and giving help to the parasitical supplementary social security industry. Here too we have a previous history. This includes various articles she’s written and in particular the position she adopted in the terrible semester of 2007 when, as long as you stayed silent, your TFR ended up in the pension funds. OK, in an interview on the radio on 19 January 2007, Elsa Fornero said this about pension funds and giving your TFR to the ones administering the funds: “The important thing is that we have a good market that works well, that has professional operators, that has a good law on savings, that has transparency, that also has professionalism and probity.” After everything that has happened in Italy, Argentina, Sirio, Parmalat, collective investment schemes that have been causing people to lose money since 1984, when they came into existence, we have a good market that works well, that has professionalism and probity, but that’s not all! Because then as regards the peprplexity of some listeners about the fact that perhaps putting their TFR into the pension funds could even be risky, the great economist gave a demonstration of a heartfelt invocation that is also a profound analysis of the situation, her affirmation is “You also need a bit of trust” we are at the level of the well known advertising slogan of the 1960s: “Galbani vuole dire fiducia” {Galbani means trust}! From these Ministers coming from Banca Intesa, unfortunately I’m expecting the worst for savers and in relation to the TFR, the worst for Italian workers! From a person like Elsa Fornero, I’m expecting interventions to the detriment of the TFR and in favour of that strange spurious alliance that is made up of trade unions, of categories of workers, banks, insurance companies and administrators that all in one way or another, by sucking money from the workers, are gaining from the supplementary social security, obliging the workers themselves to use their own TFR to play the roulette of the financial markets!

What will happen in 2012? “Who knows what will happen to us?/We’ll discover it just by living it”. However there are already a few clues. It’ll be a year of survival followed by 2013 which will be even harsher. We’re in for a couple of cast iron years. Unemployment will explode. Families will spend less and will dip into their savings (if they have any) to try and keep up their standard of living. Liquidity will become something that is ever more rare. Banks will not lend money to companies; many will go bust, squeezed between the reduction in production and the impossibility of getting access to credit. There will be the completion of the domino effect that started in 2008. After the banks and the states, the contagion will affect the companies. The problem is that after the companies there’s nothing. The shops will fill up with unsold goods. The streets with unemployed people. What’s the use of merchandise if no one can buy it? The great machinery of world commerce will slow down almost to a halt. Many countries will go into recession. Italy will have a drop of more than one per cent and I’m an optimist. Without money, without work and with the country in recession, there’ll be an increase in emigration abroad that’s already happening, especially among young people, not just within Europe, but also to China and South America. For those staying in Italy, life will be tough. Prices will increase, together with inflation, as has happened in Greece. The government will have to face up to the interest on bonds that will get close to 100 billion euro with the new rates. To do that it will increase the taxes on consumer staples and it will use BTPs to pay part of the pensions, of the salaries of state employees and of the debts with private companies. While I’m writing this I feel like escaping abroad. Don’t worry; I’ll stay here with you. You won’t get rid of me so easily.
In 2012 the price of real estate will go down by between 10 and 20 per cent. There’ll be a race to sell, but few buyers. We need to get ready for a war-time economy. Don’t get into debt and pay off any debts you have if possible. Don’t buy shares. Don’t buy state bonds. Don’t take out a mortgage and cut out any superfluous spending. Anyone that has savings should open deposit accounts in a number of banks or, better still, a Post Office account. Invest in kitchen gardens, in land for cultivation. Land is the best insurance for the future. Get together in “Gruppi di Acquisto Solidale” {Ethical purchasing groups}. There are ever more of these in every city. When the crisis has passed over, you will feel stronger, you will have got used to valuing the important things and valuing your time. Who knows, perhaps the period awaiting us is a blessing.

Serpico, the acronym for “Servizi per i Contribuent” {Services for the taxpayers}. Is a Sogei application to check up on the accounts of the Italians? Sogei is a computing company that went from Telecom Italia to the Ministry of the Economy in 2002. The information relating to us will be in a million billion bytes of memory. Two thousand servers handling 22,000 items a second. Thanks to this firepower, every single transaction of the accounts of us Italians will be examined. Every item paid in, every bank transfer, will have to have its reason, the motives. This will be possible from 01 January 2012 when all current accounts will be available to the Tax authorities even without on-going investigations. The Italian Republic of the Soviets. The Great Tax Dodgers don’t transit through a current account. The Great Corruptors don’t do bank transfers. Anyone who has made use of the Fiscal Shield did not arrange for the bank to make a payment of 100 million euro to a foreign account.
Who wants to be checked up on? The baker, the pensioner, the artisan, the small-scale entrepreneur-soon-to-commit-suicide because the State doesn’t pay his invoices? And how much is Serpico costing us in a State where broadband is a measure for trousers while the State is investing in hundreds of new servers?
The transactions on our current account are a snapshot of our lives: payments for the school, for holidays, a loan to a friend, the annual season ticket for public transport, the restaurant by the house. Us and our current accounts are the same thing. The knowledge that my identity, as an honest taxpayer, is available to tens or hundreds of people doesn’t feel good to me. It’s a violation of privacy. Who can assure me that my personal data will not be violated? The relationship is no longer between me and the bank but between me and the Tax authorities. Does one have to give an explanation of a bank transfer for 1200 euro to one’s own uncle? We are slowly sliding towards the total control of the life of the citizens. The reason given is that we are close to bankruptcy, that we have to save Italy. Good! Let those who have brought us to this situation, starting with the parliamentarians, publish on the internet the transactions on their current accounts for the last five years. Let every member of the public administration that has got the citizens into debt, give back the money. Then there’s a question to be asked. What’s the use of our taxes if public services are disgusting and the few that function are chopped to pieces with cuts? If I pay I want to be served and respected. The master in this country is the citizen, not a Government of bankers that are not even elected. They will never give up (but is it in their interests?). Neither will we.

The value of everything present on planet Earth does not go above 10% of the money, the shares and the real estate values. In other words, 90% of the presumed wealth does not exist. The reality is that our houses are worth a quarter, the shares of the quoted companies are worth a tenth, the public stock can be worth nothing and be no longer reimbursed. What has been happening since the beginning of the new millennium is a gigantic bonfire. A fire of colossal proportions that is burning the waste paper that we have printed. It was just an optical illusion. Dust it was and unto dust it shall return. Heaps of public debts, derivatives, currencies without value (like the American dollar), are continuously fed by governments without an idea for the future. A mad race by an out of control car. Growth is the solution, say the drivers, and press down on the accelerator. No organism in nature grows forever. They want to print money and sell debts for eternity. Inside this infernal machine, human activity is only of use in pushing the settling of accounts further into the future by a few years. The collapse of the planet. People work like slaves at the service of a non-existent wealth for a sick dream of a model of society in its twilight years. A hole is dug, a hole is filled up.
In the summer of this year, humanity had already used up all the renewable resources produced by the Earth. We are eating up the earth like an apple, only the core is left. Two planets are needed to keep up this rhythm. Mars could be the next frontier of consumerism. The human species reminds you of the Horsemen of the Apocalypse. When the natural resources don’t exist, virtual wealth is invented. We are working at the service of nothing. The engine is getting overheated. The so-called BRIC countries, Brazil, Russia, India and China, together with Turkey, the BRIC of the Mediterranean, will slow down their growth in 2012. For lack of customers. North America and Europe will go into recession. China’s strategy to continue producing is to buy up the debt of the countries to which it exports. Basically, it gives money in advance in order to be able to sell its goods. The deeper we go, the more we deny the problem. It’s not possible to create what doesn’t exist. Someone wake me up! AAAARGH!

Ten years ago, on 11 December 2001, China became a member of the World Trade Organization (WTO). From that point onwards the word “globalisation” has been a harsh reality for everyone. The WTO is the umpteenth organisation over which the citizen has no control, but which decides his future. A handful of bureaucrats, with the collaboration of lobbies and multinationals, dictate the rules of world commerce. Its Director-General is Pascal Lamy, an illustrious unknown person for most people. Who elected him? A medium sized business in Vicenza or in Forlì could close down because of one of his decisions. The WTO includes 153 States, for the others there’s nothing else but an embargo. The WTO was created to favour the free circulation of goods and services, but in fact it has favoured the free circulation of investment capital. The multinationals have shifted production to where it costs less. In countries where the term “trade union” is not even in the vocabulary, where there are no rules against pollution of the environment by factories, where dignified wages and protection of the workers are a chimera, but where there’s a supply of labour at low and very low cost. Even child labour if you want. International competition can happen where there are the same rules and rights for the workers, otherwise it becomes a hunting reserve for unscrupulous entrepreneurs. How can you compete against those who have no rights? To think that is madness or is just a way of pulling our leg. Sack people in your home country, continue production at a few euro with new slaves and then go into the TV studios and explain the economy. What a marvellous and shitty world the WTO has created! Those with capital have in one go got two results: controlling wages and demands from the workers for a better life and increasing their own profits. It’s the continuation in another form of the slave ships that transported the free forced labour to the cotton plantations. From the creation of the WTO in 1995, production has shifted where capital gets the best return, and it gets the best return where the human conditions are the worst. Meanwhile in the countries that have lost tens of thousands of companies and millions of jobs because of globalisation, like Italy, unemployment has exploded (what a surprise!). Basically capital has been globalised and losses and unemployment have been nationalised. In the future, unless we stop this trend, the creation of the global slave will become a reality. Eat, produce, die!

Standard & Poor's observe, observe. Today they have placed under observation 15 countries in the euro zone. All European countries can lose their triple A status. Become less trustworthy on the international market. Basically poorer. The evaluations of Standard & Poor's can make a nation go bankrupt. It gives orientation to investments; it judges the budgets; it publishes the analyses. It brings down governments; it influences the economic decisions of the States. It makes decisions about economic measures. Standard & Poor's lives "in the cloud", above politics, above the EU, above the UN, the voters. Its god is the market and it reports only to that. In theory it’s a service for investors. In practice it’s an agency equipped with unlimited power.
Who controls the controller? People with names that say nothing to anyone count more than Obama, Merkel and Sarkozy put together. The president is Douglas Peterson, the vice presidents are Pat Milano, James C. Daly, Catherine Mathis, and John Weisenseel. The executive directors are Paul Coughlin, Yu-Tsung Chang, David Jacob, Alex J. Matturri, Adam H. Schuman. Finally, Yann Le Pallec is the one responsible for Europe, the Middle East and Africa. As you can see on the Agency’s website: "Standard & Poor's Ratings Services are led by experts with years of experience in the world of finance.” Experts? Before the economic disaster of 2008 where were these gentlemen? The derivatives, the CDOs and the various financial shit have gone past their eyes unobserved.
Standard & Poor's is not a charity. It has an annual turnover around 2.5 billion dollars, a skyscraper in Manhattan and 10,000 employees in the world. The Agency is part of the McGraw-Hill group, a giant of the world of media and information with more than 6 thousand billion dollars of receipts in 2010. Our sovereignty is decided by an eyebrow movement from "Dug" Peterson, up until 2010 a top director of Citigroup, the biggest financial services company in the world. Who knows him? And who has elected him? And who gives a guarantee for him? The Bildeberg Group or Goldman Sachs? A supranational structure, not elected by anyone. It has more power than the EU. Who has handed it this power? The power is of the citizens. The market is of the cows.

The opinion poll "L'Italia deve uscire dall'Euro" {Italy has to leave the Euro} has seen the triumph of the euro sceptics. Out of 20,176 responses, 11,352 said YES, equivalent to 56.68% and 8,676 said NO, equivalent to 43.32%. a good 10,608 explained the reasons for their vote. “Una Summa dell'Euro”. Anyone with time to read them can get a complete view, perhaps after dinner to digest the new taxes. I’m reporting three reasons in favour of an exit from the Euro and three reasons in favour of staying in the Euro.

EURO NO
1 – Since a radical change in the economic scenario is inevitable, having our own currency means that it is possible to control our economy. Otherwise we will be phagocytised and sold off. Since we have to land up in misery, we may as well end up there as owners of our own stuff. … And then, it’s useless to keep alive a system that is anyway destined to end
2 – To get back control of our monetary policy. The exit from the Euro has to be accompanied by the introduction of a national currency created without debt: the State, not the banks, creates money and uses it to pay salaries to public employees and accepts it for the payment of taxes. This would guarantee that the new currency keeps its value. For greater detail on the strategy to exit the Euro I suggest this link http://smarttaxes.org/2011/11/22/moslerpilkington-a-credible-eurozone-exit-plan/
3 – Because in the ten years after the introduction of the single currency we have made the situation worse, certainly with the interest rates that the Euro has offered it has been easier to get into debt, however by getting into debt it’s not as though that much is resolved …without mentioning then the lack of purchasing power of the banknotes. In certain cases the cost of living has actually doubled in relation to the old lira, in fact those that haven’t entered the Euro have done better than those in the single currency (look at Sweden, Poland, Denmark and Norway). Certainly the fault is not all in the Euro because in the last ten years, we have seen production from countries that we hardly ever heard mentioned, like China and India, and for this reason, the cost of raw materials has shot up to the sky (like oil and its by-products, but also wheat, rice etc. )

EURO YES
1 – It’s not Italy that has to leave the Euro, but the Europe of the Euro that has to pay for its errors. Europe has to settle its debts with a patrimonial tax of 1-2% on banking transactions and on bank capitalisation. The banks that have caused the problem have to pay for what they have allowed to happen and with them all the accommodating politicians.
2 –It’s not wise to throw away the baby with the bath water. The problem is not the Euro itself, but the failure to complete the unification of the economies and the European economic policies. Three things are still necessary: a common economic policy, a common foreign policy and a real federal central bank that prints money and that does everything done by central banks. I don’t want to renounce the Euro: it’s convenient throughout the world and it’s useful for stabilising inflation and to defend the purchasing power of the families of wage earners. When a currency is subject to inflation, the wage earners pay the price and the exporting companies rake in the benefits
3 – It would be a catastrophe: we would lose the stability of the currency. Our currency would be devalued and we would in fact return to the period immediately after the war and without a Marshall Plan. Leaving the Euro is suicide: we could look forward to thirty years of Argentina and then who knows … we would probably be phagocytised before that by our neighbours. The solution is to stay in the Euro, to send home the incompetent politicians that have brought us to this condition and save the Euro and Europe by aiming at having not Eurobonds but a truly United Europe, with a truly united tax system, government and economy.

The games about the Euro are being carried on above the heads of the people of Europe. The referendum on the Euro in Greece has disappeared from one day to the next and the premier Papandreou who proposed that, has been put outside the door without even a week’s notice.
A referendum on the Euro would make it possible for Italians to weigh up the reasons for YES and for NO, both of which are legitimate, and not to leave in the hands of others, the decision on our own destiny.
Today’s opinion poll is "Referendum sull'Euro" {Referendum on the Euro}. Vote and give your reasons.

Look at the results

There’s a monster going around the banks. It’s got really strong claws that can crush any company. Crunch, crunch. It absorbs money like a magnet and it doesn’t give it back except at a really high price. It’s the “Credit Crunch”. A term that will become as familiar as “spread”. “Credit Crunch” means that no one gets credit, that the liquidity in circulation is becoming like water in the desert. The overdraft that covered the handling costs of companies while they’re waiting for payment from clients has become a mirage. The company has to make upfront payments for salaries, sales tax, taxes on presumed income for the next year and every form of commodity. As long as the owners and the shareholders manage to put their hands in their wallets, it’s OK, then it crashes.
Often the banks have more debts than they have money and they cannot lend out the debts. They can however issue them onto the market in the form of bonds. The game works until the bank bonds that are sold are equivalent to those that are paid back. Then the bank can go under. The European banks have sold 413 billion dollars worth of bonds in 2011. They have had to pay back 654 billion that fell due. What’s left is a black hole of 241 billion dollars of lack of availability (*). The banks are no longer able to buy public bonds to save the States and they cannot even sell their own bonds.
Which will collapse first? The banks or the States? Or both? Meanwhile, the companies are dying in tens of thousands because of a lack of oxygen. The debt of the companies is like a chain letter. The first company in the chain that goes into financial asphyxia strangles the second that In turn strangles the third and so it goes on. The State asks for advance payments, the banks reject loan applications or they offer loans at usurious interest rates or with a mortgage on the company. But if the companies die who will pay the enormous costs of the State machinery and the salaries of the bankers? The debt cannot be eaten.
In the last few years, mortgages have been granted at variable rates for homes even for 90% of the capital. Very many families that have taken these mortgages can no longer pay for them. The homes get auctioned off or go to the banks. Who will live in these homes? A bank bond or a share? And the people evicted that have lost not just their apartment but also the percentage of the capital they have paid, what will happen to them? In response to the Credit Crunch, you cannot react with a Taxation Crunch like the government is getting ready to do. Every organism has its point of collapse and Italy already has a strong tachycardia. We need a moratorium on the mortgages for the first home, the immediate abolition of paying the sales tax in advance and the company taxes on presumed income for the next year. Italy needs breathing space. They will never give up (but is it in their interests?). Neither will we.

(*) source Dealogic/Ft

Who will save us from the collapse of the euro? It seems like witnessing the end of the Roman empire in 476 AD. At that time there was the dissolution of a political construction, today it’s an economic one. No rules were laid down for exiting the euro. If it’s difficult to enter, it’s impossible to exit. More or less like criminal organisations. The euro is worth less and less compared to other world currencies like the dollar and the yen. Its crisis is derived from the end of the debt era. The European countries, some to a greater or lesser extent, have financed their growth with the sale of public bonds. To a great extent they swapped them among themselves like cigarette cards. I’ll hand you my debt and you give me yours, the “absurd” elevated to economic science. The problem is that no one wants to buy European debt any more. Neither within nor outwith Europe. To sell it it’s necessary to increase the interest and thus to create new debt in a never ending race.
The value of the euro is guaranteed by the performance of Germany that however has a GDP/debt ratio of 82%. It’s beyond the maximum European threshold of 60% and its banks are among the least solid in Europe. Germany cannot shoulder the European debt. First it has to think about itself. The salvation for Europe should be the so-called Eurobonds, basically the debt of all the countries put in a common pot and issued to the market. The more virtuous states, like Germany and Holland, should also pay for the PIGS. A bit like in Italy where it’s always the ones who pay the taxes that pay for the tax dodgers. The Italian public debt is expressed in euro and it has to be repaid in euro. We cannot devalue the euro and even though our economy is worth less, the bonds keep their initial value. It’s a noose round our neck that gets tighter and tighter a centimetre at a time; the hangman is the “spread”. If our bonds were to have a value in lira, the devaluation of our currency would be reflected automatically. The problem would not need to be put forward. It was demoniacal and certainly Tafazzi-style to tie the value of OUR public bonds to the value of the euro over which we have no control whatsoever and that has nothing to do with our real economy. The Eurobonds should obviate this monstrosity but it is improbable that the Germans will put their hands in their pockets to save the Greeks and the Italians.
I don’t know where this French/German minuet is leading. It’s conducted by two ballet dancers: Merkel and Sarkozy, always out of time. The impression is that we are waiting for an order to “break ranks”. Preparation is necessary, even just as a probable alternative, a plan B for leaving the euro. Let’s not get there out of necessity.
The blog is proposing an opinion poll on the euro yes – or the euro no. Respond in great numbers with your suggestions.

PS. The opinion poll will be open until 2:00 pm tomorrow Saturday 26 November. Look at the results.

Italy has an unsustainable public debt because almost half of it is owned by banks and foreign States. Japan with a debt/GDP ratio of more than 200% is not collapsing because most of its bonds have been bought by the domestic market. They are holding us by the balls and they have appointed a liquidator. They don’t want to lose their investments, especially the French banks. Over the last few years, if we had followed a policy of prudence, instead of selling our public bonds with open hands for Great Improbable Public Works, Enormous Money-Wasters, Election Financing and useless infrastructure, today we would be free to decide our destiny. It’s not like that. They repeat that there are no alternatives so as to avoid that there may in fact be alternatives in reality. The parties are cadavers. They could sack all the parliamentarians and no one would notice. What use are they? To ramble on from the benches at our expense, while decisions are taken by the ECB and by Ms Merkel?
This blog, ignored and often derided, while the bunga bunga was having a fury in the media, has for years been announcing the financial and political disaster awaiting us. Democracy is by now an empty word, substituted by “eurocracy”. However the speed of the decisions that have taken place over the heads of the Country has in it something strange, something unnatural. It tastes of comedy, of “teatro dell'Arte”. A life senator in a period of a few hours and a government of non-elected people in a week. The Italian people treated like a stupid servant. Why has it happened now? Why this hurry? The growth of our GDP, even though ridiculous, has been greater in 2011 than most of the nations of the EU, exports have grown by 10% in relation to the same period last year, and the budget deficit has gone down from 5.5% to 4%. We have slid down on the spread, but who is the one that made the spread go up in such a stunning way in just a few days? And for what reason?

Speech by Nigel Farage, president of the Europe of Freedom and Democracy group in the European Parliament


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The only nation immune from the crisis of the euro is Germany. We’ll have to start to understand the reasons for this. If a nation like Greece, that is worth 2% of the GDP of the EU, risks making it collapse, we need to ask ourselves a few questions about the capacity of the current construction of Europe and on what basis we are placing our feet. The data on the “spread” of the last decade between any old country of the euro zone and Germany demonstrates the unsustainability of a single currency for European economies. The difference between the public bonds of the various States and the German bund has increased not just for Greece or for Italy, but also for Holland that has gone from 0.2% to 0.5%, for Spain from 0.3 to 4.1% or for France from 0.1 to 1.76% (*), all the figures are increasing. Basically the distance between Germany and the rest of Europe is increasing for everyone, at different rates. And we are all at risk of ending up like Greece in the long term. No State can stay hooked up to the German locomotive.
Germany is absorbing liquidity from the European States like a black hole. It’s the cash box of the continent. In fact anyone who sells Spanish or Italian bonds, is today buying “bund” that have a lower return, but that give greater guarantees. Germany, thanks to the euro, has increased its exports to other member countries. If the Italian were to pay for a German product in lira, or the Spanish person in peseta, exports from Germany would go down. The euro does not represent the national economies that have adopted it, the countries that are getting further away from each other, not getting closer together. The euro is the symptom, not the problem. The EU doesn’t have common fiscal policies, shared measures for constructed budgetary laws deciding expenditure policies and accounts of the different States. It’s the equivalent of a group of people who live in the same condominium in which some people throw money from the window, someone else cleans the stairs for everyone, doorstep recycling is done only by the tenants on the first floor who are also the only ones to pay the expenses of the condominium. It’s obvious that living together like that cannot last, just as it is equally obvious that the European Union has to follow and not anticipate a political union. You start with your head not your wallet. Unfortunately you see it’s morning by the “superpassera” in the government.

(*) source OECD date: 11 November 2011

Monicelli said that unfortunately, there has never been a revolution in Italy. The Anglo-Americans put an end to fascism, not the Italians. The ECB has turfed out Berlusconi, not the Italians and not even the colluding Opposition made of papier-mâché. The new masters have always substituted the old ones in this country of servants. Perhaps now, at least for once in our History, we will be able to try to liberate ourselves on our own. This letter from Argentina is a message of hope.

“Dear Beppe, dear all,
When I was little, my father told me stories of Italy and I dreamed of Italy. Your marvellous peninsular and the Mediterranean were for us, together with Greece, not just the cradle of Western civilisation: for 40% of the population of Argentina, Italy was the Motherland. We wondered why we had to speak Spanish, a language that we had nothing to do with. Sometimes with great effort, our parents bought Italian magazines like “la Domenica del Corriere” and we children looked at the cartoons without words and tried to understand them, while listening to Iva Zanicchi singing “Fra noi”. In a good chunk of my land the surnames are exactly like yours.
It was luck that meant I came to Italy as a young girl, flying on my own to visit my uncle and aunt and it happened that straight away after that there was the 1976 coup d'état in Argentina. My father decided it was best for me to stay in Italy. And that’s what I did. I went back to Argentina in 1983. My cousin who lived in Baudenasca (Pinerolo), saw how much I was suffering in a crisis of nostalgia, and he said to me: “The generation that emigrates is a generation lost”. Then I made the choice that my home would always be Argentina. Anyway Italy is in my blood and in my heart, so much so that I carry my “Carta d’Identitá” {Italian ID card} in my wallet together with my “Documento Nacional de Identidad”. Thus I have always followed Italian current affairs. Like so many Argentineans I watch “Rai International”. We are the biggest population of Italian origin in a foreign country, even though Italy has often ignored us. I have been astonished to observe many of the happenings in Italy in the last few years like the adventures of “Your Cavaliere”. In Argentina, the ones that you call “poteri forti” {strong powers}, not having managed to get back up off the ground in spite of the “coup” and the dictatorship, slotted themselves in to the Menem government , corrupting it and upsetting it right from the start. They almost succeeded. However, it has to be said that after Menem we managed to react and when, with De La Rua’s “Alianza” government, they wanted to give us the final blow, the population out in the streets forced them to give up and leave. It was not the “poteri forti” that got rid of those who wanted reforms that people are now telling you are necessary and that the government you elected cannot get through because they are “unpopular”. It was us, the citizens out in the streets that got rid of them, even though we were confused because like you they kept us with our backs to the wall pinned there with massive headlines in the newspapers with “Riesgo País” (your “Spread”) that would have taken us all to hell unless we took the poison. The dilemma was the same as has been presented to you and to the Greeks: “If you don’t want to be killed, commit suicide slowly”. The law of “Flexibilisation of work”, approved by the De La Rua government paying the senators, was partially repealed.
The social security contributions (even those) that had been privatised and handed over to the “Pension Funds”, were taken back by the State. Argentina’s GDP, that plummeted in the year of the default (-11% in 2002), straight away started to grow at an average of 8-9% a year as of 2003 and at the end of 2011 it’ll be at 7% in spite of the international crisis. Hundreds of researchers are coming back to Argentina thanks to the government’s “Radici” {roots} programme; the budget for public education (declared a “public good” by law) has gone from 2% of GDP (2001) to 6.5%.
Our countries have said “no” to the “free trade” that the United States wanted. This was the wish of those presidents who enjoy the biggest support of their citizens and who are often sneered at by the “First World”. For example, for the global media, Chavez is a clown. Cristina, a “populist” who only thinks about buying expensive handbags and shoes. Evo Morales, a “savage” and so on. Stereotypes to discredit our governments because we are resisting the “poteri forti”. We are growing

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Interview with the economist, Eugenio Benetazzo:

Most of the emails that I’ve received in the last few weeks have been mentioning the risk of a patrimonial tax in Italy. Given that with a patrimony valued at 8 trillion euro subdivided into financial assets and real estate, Italy has a tax base that no other country in the world can claim to have and it would give credence to the presumptions that from now for the next few months, some government, especially if imposed from above, thus a “technical government”, puts into practice one of these strategies to sort out the public accounts. It’s not possible to know the dimensions of this intervention, but it can be hypothesised. There are those that estimate it to be a cumulative 3, 4 or 5% with a patrimonial tax on real estate and financial assets and that objectively, it would produce the amount of financial resources necessary to consistently reduce the stock of the Italian public debt.

On the road to underdevelopment
In the next few days my new economics book is coming out: “Il futuro che attende l'Italia, era il mio Paese”{The future awaiting Italy, it was my country}. It’s about the crisis of the Italian system and the potential default of the Italian public debt. Many people have written to me to ask what are the most likely scenarios for the evolution of the economic and macroeconomic situation in Italy. The recent episodes of financial newspaper stories that have highlighted the potential default or financial crash of the Belgian Bank, Dexia with repercussions across the whole of the European banking system

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A country for the young people
Most of the emails that I’ve received in the last few weeks have been mentioning the risk of a patrimonial tax in Italy. Given that with a patrimony valued at 8 trillion euro subdivided into financial assets and real estate, Italy has a tax base that no other country in the world can claim to have and it would give credence to the presumptions that from now for the next few months, some government, especially if imposed from above, thus a “technical government”, puts into practice one of these strategies to sort out the public accounts. It’s not possible to know the dimensions of this intervention, but it can be hypothesised. There are those that estimate it to be a cumulative 3, 4 or 5% with a patrimonial tax on real estate and financial assets and that objectively, it would produce the amount of financial resources necessary to consistently reduce the stock of the Italian public debt.
My personal opinion is that they will go and attack, above all, the financial assets, thus most of the liquid assets in the form of the liquidity of deposit accounts, fixed term deposits, because most of the Italians, given the attention and the financial turbulence of the markets right now have taken a position with these types of accounts. Unfortunately, we have to remember that the patrimonial is a tax that is not democratic, but that it goes to weigh on those who up until now have always paid their taxes or those who have put aside resources in a fair and correct way and above all while fully respecting the Italian tax system.
My personal hope or thought is that if it were to be implemented, that if this tax (that will generate a massive quantity of resources for the country) is brought in, that these resources are used by a new executive, not the current one, otherwise it would be a lost battle from the start! An executive that is representative of the individuals and the motivations for renewal that are arriving right now especially from the young generations of Italian lads and lasses, those aged 30 to 35 years that for the most part are living with a future that is profoundly uncertain not only from a financial viewpoint, but also from the point of view of employment.

We are in default, but at the same time we are the richest country in the world. Potentially. If we were to recover the money that’s wasted, lost from tax dodgers, from corruption, from criminal activity, the State coffers would have approximately an extra 500 billion euro a year. That means that without asking for any sacrifice from the Italians, the public debt would be reduced to zero in 4 years. No one has our numbers. The problem is thus political rather than economic. Marco Cobianchi is an economics journalist. He has made a journey in Italy through the money of the State that has been gifted like sweeties to companies that don’t exist or that are about to go bust. An abyss on which there are no controls.

Interview with Marco Cobianchi , a journalist and the author of the book "Mani Bucate" {Hands with holes}:

Ineffective public funding
Greetings to the friends of Beppe Grillo’s blog. I’d like to present myself. I’m Marco Cobianchi, a journalist working with “Panorama” and I deal with the economy. I’ve just published a book called "Mani Bucate" {Hands with holes}. It’s the first investigation carried out in Italy about the incredible world of State financing to private companies. This is money that comes from the coffers of the State and ends up in the coffers of the companies.

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FIAT, 121 million in public subsidies
Among the hundreds of cases I talk about in "Mani Bucate", one made me jump off my chair. It’s about STM, a French-Italian company that in a single year received about 1 billion 124 million euro of public subsidies, of which about half came from Italy, and about half from France. This money was used to change the business of STM

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The State finances the mafia
Checks don’t exist. OLAF, that is a European body that should check up on irregularities, says that in 2009, there were 1491 Italian irregularities and they involved capital to a value of 422.9 million euro. The possibility of recovering this money is practically zero because according to OLAF the member States, that is the European States chase up only 7% of suspected cases.

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Once upon a time there were parliaments, federal and national governments, and public debates about the future of the nations. There was even the UN that didn’t work very well, but it was still a bit of a representative body. All this is memory, ashes of democratic shadow, dust from the past. It no longer counts for anything. Other organisms have superseded them with acronyms that people find mysterious: WTO, ECB, IMF. Our destiny is in their hands, but we don’t know who directs them, or who decides their objectives. No one has elected the representatives there, but our lives depend on them. The ECB, a bank, can send a letter to a government in power giving the details of the conditions and threatening to sack them and no one is scandalised by that. The WTO can decide to break up the world with the free economy, a parody of free love of the children of the flowers transformed into children of the banks. Production can be entrusted by the multinationals to Indian children or Chinese workers with no Trade Union rights. Transferred from States with really severe regulations regarding the environment, to which companies have to conform or face closure, to States where everything is allowed. What global competition are we talking about? Competition exists where there’s parity of regulations and of rights. It’s more correct to talk about global exploitation, of the general lowering of wages in the industrialised nations, of the loss of social and Trade Union gains that are the fruit of the battles of the preceding generations. Who has decided all this? The WTO. In whose name? The International Monetary Fund puts one in mind of the vultures. Its representatives arrive when a State is in its death throes to protect international interests. Greece cannot go into default straight away. If it were to fail, the French banks that have its debts, could fail. Thus first, it has to sell off its national patrimony and save the banks. The world is bank-centric and there’s no longer even any discussion of social policy. The EU has been substituted by the ECB, the UN by the WTO, the governments by the IMF. The wars themselves have only economic ends, no longer ideological, religious or territorial ones as has been demonstrated by the war in Libya. The banks finance the wars that in turn finance the banks. In the hotel they ask you for your credit card instead of your ID card. At birth they allocate you a fiscal code, together with your personal quota of public debt, before assigning you a paediatrician. The politicians are the waiters of the bankers and we pay the bill.

The book contains the pension bomb, this bomb whose fuse is already alight now and that will deflagrate pretty soon. You can even read it like a thriller, in that it talks about a crime, it’s the crime of the future, of the young generations to whom we are saying how to live out the coming years, why? Because the pension system is what has kept preceding societies together, while the current pension system is not able to support the future generations. There’s a paradox: it’s the young precarious workers together with the immigrants that right now are keeping the social security coffers going, and especially the coffers of INPS. If you like, there’s also another paradox, the fact that young people are prevented from entering the labour market, and thus they are prevented from paying the contributions and building up the coffers of INPS, while at the same time it is the older people who are kept in work. Walter Passerini

Interview with Walter Passerini and Ignazio Marino, authors of "Senza pensioni" {Without pensions}:

Young people and immigrants are paying for pensions
Walter Passerini - My name is Walter Passerini. I’m a journalist and Ignazio Marino and I have written “Senza Pensioni” {Without pensions} published by Chiarelettere. The book has the subheading: “everything you want to ask about your future, but that no one dares to tell you”. The government is not doing anything from this point of view. It is simply operating with a logic of a cash box, but it is not bringing in structural elements that serve young people above all, basically, it’s a matter of giving companies incentives to recruit young people, whose contributions will be able to go not only to the pensions of those who are blessedly already pensioners, but also the pensions of the young people themselves. By now it is pretty shameful and well known that there are so many areas of waste in the social security system, there are the pensions of the politicians, the honourable pensions, and I’m saying nothing about other affairs that have something to do with the various world champions. Just think, there’s a director of a big group, of Telecom, just so as not to name names, that gets 90 thousand euro a month as a net pension. There are distortions like this. Certainly, social security is connected to savings and the reduction in the costs of politics. I believe that the most important thing is connected to work: we have to get the young people in so as to avoid not just them having no pension in the future, but because they no longer see work as a sort of lever for their redemption. What is surprising is that no one talks about these things. We are trying to document the outrage of the people, to give figures even about the reasons and also about some possible exit and it surprises me that a social revolution is not happening, not just for the lack of stable work in Italy, but above all for a pension bomb that we will find at our feet in a few years time.

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Italy is no longer growing
Ignazio Marino - Hi to all the friends of Beppe Grillo’s blog! My name is Ignazio Marino, a journalist with Italia Oggi. Ever since I started this profession, I have always been dealing with issues about work, social security, and above all about pensions. Every year, Italy is paying 14.4% in pension spending,

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The year 2008 was the year of the crack. The paper economy crashed. The architrave on which it was supported, were the banks. They couldn’t fail, the system would have collapsed. The States had to get into debt to finance them. Many of them were already heavily exposed and couldn’t cope. The weakest, as always happens, were the first to give up and they are dragging other States with them, in a castle made of cards. The governments are resigning. It’s happened in Greece, in Portugal and in Spain. It’s completely improbable that for Sarkozy, for Merkel, and perhaps even for Obama himself, the term of office will be renewed.
The saving of the banks has made the governments collapse, but the debt of the States , acquired over the years in the form of bank shares, has taken them back to “start”, like in a board game. The French banks are the ones most exposed to Greece, in their accounts they have tens of billions of waste paper in the form of shares. The same is true for Italian banks that own 200 billion of our debt.
France is weighing up the possibility of nationalising the banks. In Italy the share value of the banks has been halved. The failure of Wall Street is getting transformed into the failure of Main Street, from the paper economy we pass to the real economy, to the streets. It’s the beginning of a crossing of the desert that will change everything, even though we still don’t know in what way. It will not be without pain. In 1929, the twin year for 2008, there was the collapse of the Stock Exchange, and that was followed by the Great Depression that lasted years. In October 1929 unemployment in the United States was 5% and the Dow Jones was at 343. Two years later, unemployment had grown to 17.4% and the DJ index had gone down to 140. The situation got worse in 1933, the equivalent of the forthcoming 2012, with 23.2% unemployment and the DJ index at 90. In 1934, the situation stayed at the same level of seriousness. In 1938, the biggest economy of the world had an unemployment rate of 17.4%, more than three times the percentage before the crisis, and the value of the DJ was at 121, three times lower than in 1929. Then the Second World War happened and it zeroed everything. History never repeats itself in the same way, but it often presents many similarities. The crisis will last a long time and it will be hard. The two year period 2012-2013 could be the worst since the mass sackings in the public sector and the chain reaction of collapses of the private companies.
Some democracies could be at risk. In 1933 Hitler was elected Chancellor. Vis pacem, para bellum. It’s time to face up to the future that is waiting for us with an open face, without any more intermediaries. "Guardala in faccia la Realtà! .......è più sicura!" {Look at reality directly! ……… it’s safer!}

When one era is ending, anyone who is within it can consider themselves to be at the end of time and deny the event or they can look beyond. It’s evident that the capitalistic model based on limitless profit, on growth and on the consumption of the planet has finished some time ago, even though the governments don’t want to recognise that. The war over oil started at least before the invasion of Iraq by Bush senior and carried on up until now with the occupation of Afghanistan and the aggression against Libya is only the most evident of the symptoms of our self-destruction. The model based on individual mobility and on the world transportation of merchandise, Chilean pears in Great Britain or Chinese tomatoes in Italy has no logical or economic motivation. No one stops to ask: “Does growth make sense? And what does it mean exactly? Growth is a new taboo, a modern Moloch that is adored as in the times of Jupiter and Apollo, with its modern priests: the IMF, the WTO, the ECB and its temples: the Stock Exchanges, the majestic headquarters of the banks (the new churches) in the city centres. We are so permeated by the myth of growth that we take it for granted as though it is ineluctable and we live it as an act of faith.
However, when the mirror is broken and the truth can no longer be put off, then, as written by Slavoj Žižek, a Slovenian philosopher and psycho-analyst in his book called "Living in the End Times", there is an elaboration of the mourning that takes place in 5 phases. To explain them, he associates the consciousness of the collapse of our economic and social model to the discovery of a terminal illness. The first stage is denial: the crisis does not exist and neither does the hole in the ozone layer, the glaciers have always been retreating cyclically, the overheating of the planet is an invention of the media, automobiles are necessary for the development of civilisation, the GDP is the alpha and the omega of the nations. The second step is anger: The “no-global” movements are the new barbarians at the frontiers, anyone who doesn’t consume is a pessimist and on the other hand anyone who consumes is a patriot, governments and the multinationals who see the basis of their power collapsing are thinking: “This cannot happen, it cannot happen to me.” (*) Thus the sick person tries to come to an understanding to put off the sad event of his death: new economic manoeuvres, a reduction of the public debt, cuts to social services, increase of every type of taxation, disappearance of pensions.
Economic Cobalt therapy. Then comes the phase of depression in which for whoever is in power, everything is permitted, a behaviour characteristic of the decline of the Western Roman Empire, alliances with criminal powers, widespread corruption, new wars. He thinks about enjoying the life he has left. “Après moi, le deluge.” The last stage is acceptance in which the “power” resigns itself, closes itself in its bunker and awaits the end. In general, the world is somewhere in between the first and the second stage, between denial and anger. In Italy we have moved forward and we are in transit from the third to the fourth phase, between “coming to an arrangement with reality” and depression. In a bit there will be the assault on the bunker. They will never give up (but is it in their interests?). Neither will we.

(* ) quote from Slavoj Žižek

Before and after the debt. The year 2011 is the year for starting again from zero. The company based on debt is finished. The doped growth from non-existent financial resources is no longer possible, neither has it ever been in reality. It was an enchantment that we wanted to believe in. A mirage connected to unsustainable growth passed off as development, when instead it was only predation, pauperisation, and impoverishment of society.
The age of growth, of the GDP as a measure of nations belongs to the past. Up until now , the debt has been a really powerful weapon, more than any nuclear weapon, in the hands of the politicians. Debt and “circences”. Give me an unlimited debt and I will construct anything, I will produce every new manufactured product, I will build the Messina Bridge. A tool superior to the Archimedes’s lever that with one pivotal point made it possible to lift up the world. The ceiling for the debt doesn’t exist. We have lived for decades in a house without a ceiling. In fact it can be raised at will by Obama or ignored by Tremorti.
The politicians have made use of unlimited resources, but non-existent metaphysical ones, and on these they have constructed their power and modelled a society of consumption in which the citizens have mortgaged their future for unnecessary goods. All this has arrived at the end of the line. Growth for growth’s sake is blasphemy, a theft of energy, time and thought. Why grow? For what fucking reason is it necessary to work like slaves for forty or more years and then die? For the profits of the multinationals? For the election policies of the parties connected by hand and foot to the lobbies? For a planet with a percentage of super rich people with telephone prefixes and masses of billions of disinherited people? What’s the meaning of this growth? None. A collective inebriation. An infernal sabbat of eternal debt with resources peddled with open hands by irresponsible economists like a drug. Politics is nude. The debt was the life insurance. It no longer exists. Before and after the debt. Now we have to measure up to reality, look in the mirror and plan a better world. The excess of work, the reduction of one’s own time, the destruction of the environment are bastard offspring of growth and of the debt. Today I feel like an optimist. The year 2011 is the first year of a new world.

The patrimonial has already been done. At the suggestion of banks and financiers, Italians in recent years have invested in MIB 50 shares, shares on the list that covers the main companies quoted on the Stock Exchange, the ones considered to be the most solid, “safe-deposit box shares”. Anyone who has done that has often lost a good part of their capital. The shares of Telecom, Seat, Saras or Mondadori will never recover their value of a few years ago. The prudent saver who has followed the old adage that on the Stock Exchange, you can invest all that you are prepared to lose and who thus bought State bonds, (extra secure for Tremorti) has already lost a part of their value, at least 10%, if they were to sell them today and they are starting to have serious doubts that the capital will ever be paid back. Anyone who has had the luck to avoid the Stock Exchange and the BTP (State Bonds) has bought an apartment, the safe haven of property, in the big cities and has lost about 20% since 2008 and in tourist zones 30%. The ultra prudent saver who, to reduce the risk, has divided up the investment of their capital: 33% on the Stock Exchange, 33% in State Bonds and 33% in real estate has even lost their shirt. A probable oscillation of loss is between 25% and 30%. To what remains you have to add the patrimonial that everyone from Montezemolo to Profumo has been clamouring for.
In principle it’s possible to agree that the one who has the most is the one who contributes the most, but on two conditions. The first is that anyone who has been a part of the System, has enjoyed the benefits, and is thus completely responsible for the economic catastrophe, let them take themselves out of circulation and let them abstain from giving interviews, and this goes also for Mario Monti, president of the Bocconi University, who has discovered the hot water in the public debt just many years late. The second is that before paying any type of new tax, any type of patrimonial, the dead branches must first be cut out, like the Provinces, the government concessions have to be returned to the State, like the Motorways, and let there be the imposition of the obligation to cover expenditure at any level. Otherwise, it’ll change nothing. The parties, as soon as the moment of crisis has gone by, will once more start the race for the expenses for elections. It is they who are the crisis, as long as this political, entrepreneurial, banking and information class don’t go away, the crisis will get worse. It is they who are the crisis, but they are not in crisis. They have lost nothing and they don’t want to take a step back by even a millimetre while defending their privileges. I’m OK with the patrimonial, but only if it is applied to the parties with the cancellation of election financing amounting to a billion euro. The patrimonial is even better, but only if they cancel the public financing to the newspapers. I love the patrimonial, but only if the pension rights of the parliamentarians are eliminated retroactively. The game has to be harsh, either we all play together, or the citizen won’t play any longer.

The night has to go by, but in the morning you have to arrive alive. Anyone who has been saving all their life, today is afraid of losing everything and having no money for their old age. The pension is getting further and further away and is by now having a competition with death to see which arrives first. Eugenio Benetazzo is giving some advice on how to protect yourself and he foresees (and he’s not the only one) a Europe with two different currencies: Euro 1 and Euro 2. I don’t need to say that we would be in Euro 2 until they create a Euro 3. Face up to the catastrophe with optimism and I’m warning you: don’t get into debt and if you are already in debt, get out if you can.

Interview with Eugenio Benetazzo, independent stock market trader:

The collapse of the PIGS
The sovereign debt crisis started two years ago with the implosion of Greece. Europe intervened at an institutional and supranational level guaranteeing everything to everyone, saving not just Greece, but then in a chain reaction, helping the big banking groups to avoid phenomena of financial contagion.
Two years later, we realise that that mythical rescue of Greece was a financial “illusion” and today we find ourselves experiencing an economic stalemate with indirect financial repercussions even on the other countries of the Mediterranean. After Greece, it’ll be Ireland’s turn, then Spain’s and Italy’s.
By now, Italy has been under siege for more than three weeks and this presupposes a difficulty to keep not just the price and the solvency of the Italian Government bonds, but also the credibility that the country has with the international financial communities. The choices that have been recently put into effect by means of the emergency measures of the current executive are the umpteenth proof of how those who are governing us are objectively unprepared and also incompetent, in that it was fairly plausible to imagine what would happen to our country over the years. Thus, for the umpteenth time, they have created the circumstances for sorting out this situation of difficulty, but in the medium and long term the measures that have been recently put into practice will be palliative. To say it like the British Prime Minister, David Cameron, even Italy will be obliged to take the so-called little blue pill, that is the really bitter medicine that will give the country a phenomenal momentous restructuring of the whole economy, starting with politics and going through to the administration of public affairs.

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Euro 1 and Euro 2: two currencies for Europe
By now alerts are coming in from all sides, from academia, we mustn’t forget Roubini, Fitoussi, we mustn’t forget Attali, we mustn’t forget Zingales, and from the financial communities with big operators and fund managers

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Italian banks
Italian banks or anyway the Italian banking panorama at the moment has to be divided into two sets: on the one hand there’s the big banking groups that represent the main competitors of the sector,

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Sacrifices have to be made by the citizens. Sacrifices are decided by the parliamentarians. The parliamentarians do not make sacrifices. It’s the theatre of the absurd. Perhaps we have lost the sense of reality. The media use the “confusion technique” and we peck at each other like “Renzo’s chickens” before they have their necks wrung. Let’s try and redefine the rules. The sacrifices have to be made by everybody. Sacrifices are decided by and voted on by the citizens. Parliamentarians make sacrifices. Like that it’s better.
In the minipost "La manovra economica" {the austerity measure} I proposed:
- Cut military expenditure and bring back the troops form fighting in Libya and Afghanistan
- Abolition of all parliamentary pensions in the absence of a contribution payment period equal to that of all other citizens
- Immediate abolition of public financing of parties starting from next September
- Abolition of direct and indirect financing to newspapers with retroactive effect starting 1 January 2011
- Contribution of 60% of the capital legalised with the Fiscal Shield
- Nationalisation of all the concessions in the hands of private companies
- Immediate abolition of all provinces. 50% reduction in the number of parliamentarians
- Abolition of double and triple pensions
- Maximum of 3,000 euro a month for all pensions
- Cancellation of the Great Useless Public Works (TAV Val di Susa 22 billion, Messina Bridge 4, Gronda Genoa 6, etc.)
- Elimination of the Regulatory Authorities and the inflated salaries of politicians placed there.

I’ve received more than 500 contributions. I cannot, for reasons of space, list them all. I’m just publishing a few. The measure that got the most support in absolute was the introduction of the ICI property tax on the properties of the Vatican. Many propose the exit from the Euro or immediate default. Here’s a brief summary:
- Abolition of public financing to private schools
- Abolition of financing to private hospitals
- Possibility for all documentable expenses to be deducted from income before the payment of tax to uncover tax evasion estimated to be 130 billion
- Increase in the rate of tax on empty homes and offices to bring down prices in the rental market and reduce building speculation and the laundering of mafia money
- Recovery of the 98 billion euro that slot machine companies have not paid in taxes
- Elimination of every “golden handshake” for public positions (for example: regional councillors)
- Halve the number of parliamentarians or alternatively close down the Senate.
- Have a tax on prostitution
- Eliminate all the official dark blue cars
- Eliminate multiple pensions
- Facilitate distance working
- Oblige every public body to keep a balanced budget
- Abolition of public funding to hunting activity or of a private nature.
I invite you to keep going with other suggestions. The measures put forward will be voted on using a poll on the blog. For each one there’ll be a calculation of the potential saving. A summary document will be available on the Internet and copies will be sent for information to the parliamentarians who will be asked to discuss the points during the inevitable Autumn budget debate. They will ignore this, but only for a limited time. They will never give up (but is it in their interests?). Neither will we.

For those with money, money has become a worry. Once upon a time, money was a source of security. Today having money means you don’t sleep at night.
Investments in state bonds can become waste paper as happened in Greece. Banks can go bust. Shares can lose 5% a day and anyway they have values like telephone prefixes. Derivatives and futures are blasphemy for a saver. Bonds and funds are pure hemlock. Invest in currency? Which currency? The dollar or the euro that are falling together, or the Swiss franc that’s overvalued and at risk of falling? Crikey, it’s worth being poor!

Interview with Beppe Scienza, of the Mathematics Department at the Università di Torino

An idea that is not so odd

”Put your money under the mattress seems like something said as a joke, an exaggeration, and yet to think about it, this idea is not as odd as it seems at first sight and if a lot of people have this idea, they’re asking me, they’re thinking about it, they’re wondering if it makes sense because there is even something worthwhile in the idea, and there’s also a valid reason. Let’s see what doesn’t happen, the nasty things that don’t happen to you if you have your money under the mattress.

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Protection from taxes on patrimony
Another current topic is a matrimony tax, but there has been an infamous tax even though it was not so really terrible, it was done by Amato in 1992 on current accounts, on bank deposits of 0.60%. At that time, this tax hit those who had money in a current account and those who had money in a savings account but not those who had their money under the mattress. Thus having your money in cash allows you to avoid the patrimony taxes. Thus there are non-foolish reasons, if one says: “I want to put my money under the mattress”. I won’t advise them to go to a psychiatrist. This is not a madman. It’s a person who is rightly worried, having been burned by so many rubbishy things that have been sold to them, fearful of falling into other traps. First of all: It’s not absurd to put your money under the mattress. Is it possible to do that? Yes, it is possible.

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Return to the past
I would say that there’s another solution that is worth considering and once more this is a return to things of times gone by, and they are Post Office interest-bearing securities. Is it a retrograde step? Perhaps it is. Certain modern things are no good. Certain finance ideas are no good. I prefer to avoid them. I prefer a house built on stilts in the lake to a house that is collapsing even though it’s been built by a great architect. The Post Office interest-bearing securities have almost all the advantages of money under the mattress, except for one, that one is that if the Italian State goes bust, they are certainly involved in that collapse.

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" Beppe Scienza

Sacrifices. This is the buzzword for Summer 2011. Everyone agrees that, so as not to collapse, sacrifices are needed. However, none of those making this declaration is prepared to make sacrifices. They prefer it to be the others giving a good example. The citizens without means, let’s even say the ones who are almost destitute, have already understood that the touch paper will stay in their hands. For some time they are used to the torments of this post-feudal state. They have the highest taxes in Europe, the lowest salaries, cuts to social services every ten years, starting with health and education and the de facto cancelation of the pension. The State has become a bottomless pit that doesn’t even give you back an echo.
Now there’s talk of privatisation, of putting public goods up for auction, the State companies, from ENI to Enel, to make money. It’s a spoliation done without the agreement of the citizens who are the legitimate owners. No State property has to be sold, in fact the contrary is true to have the possibility of development. To hand over sovereignty on key companies, for the country means abdicating any international role, as has happened for the wretched hand over of Telecom Italia in exchange for debts, the company that was at that time the country’s driver of innovation, led by D'Alema, the merchant banker of Gallipoli.
Sacrifices? Let’s start with the concessionaires, with the ones that use public goods in concession to make a mountain of money for us. To be brief, I’m just citing two, but there are many more: Benetton and Berlusconi. Benetton has the concession of certain branches of the Italian motorways by means of Atlantia Spa, a company quoted on the Stock Exchange. In 2010 it had an income of 3,750 billion euro with a profit of 701 million euro. Anyone who pays motorway tolls knows how much the tolls have increased in recent years. Atlantia is not the only one that has as a concession the motorways that have already been more than paid for through our taxes, through the taxes of our fathers and grandfathers. The question we need to ask is simple: “Why should private companies benefit from State property? In certain European countries, motorways are free, in that their costs have already been paid by the citizens. They want to delegate Atlantia to be an administrator? Let them do that for just the costs of maintenance with a tendering process. Does the State want to rake in the gains to reduce the debt? Let it do so! Does it want to make them toll free, as would be right, to reduce the costs of transport, costs that fall to the companies and the citizens? Let it do so! But what it cannot do is make private companies rich with public goods.
Let’s consider Berlusconi, l'imprenditùr. The guy who today is asking the country for “sacrifices” just pays one per cent of the turnover of his company for the government concession of three national frequencies. The “ad vitam” bonus he gets thanks to the sempiternal D’Alema, who when he was Prime Minister passed the 1999 law number 488 approved (page 32, article 27, comma 9). I believe that it is right, in a time of sacrifices, to review the law and to shift the one per cent of the concessionaire Berlusconi to at least 30% (and I’m keeping that low) or to put the frequencies up for auction. Dear concessionaires, the party is over. Before asking any citizen for a single extra euro, the State has to collect itself together and get remunerated for what it owns. They will never give up (but is it in their interests?). Neither will we.

The default arrives when it arrives. And then? What will happen? Let’s imagine three scenarios: “soft default”, “almost soft”, “almost in underpants”. The soft default sets out a “lifting from current accounts” (Amato-style),a generalised increase in indirect taxes, the reintroduction of ICI, the raising of the pension age, the block on new recruitment to the public administration, an increase in local taxes, in the costs of transport, water, electricity and gas. However the soft default is improbable with the public debt over 1,900 billion and the banks that are not worth a thing, holding on to 220 billion in State bonds, 85 billion in unpaid loans and an immense real estate patrimony that sooner or later can be devalued. To place our bonds on the market, Tremorti always has to offer greater sums in interest. In 2011 we’ll have to pay between 80 to 90 billion. Perhaps increasing the interest rates is no longer enough. The mid-August bond auction has been cancelled for fear it’ll be deserted.
Now let’s see the consequences of the “almost soft default”. Net patrimony tax on movable and immovable property, elimination of the Provinces and grouping together of the towns and villages with fewer than 5,000 inhabitants (these measures are praiseworthy), rise in direct taxation, rise in Irpef {income tax}, increase in health costs, doubling of taxation of income from financial assets, elimination of tax discounts to the regions and the autonomous provinces, introduction of the “fair contribution” of 15% for every income above 30,000 euro. Obviously added to these measures you add those of the “soft default”. In Italy, there are 19 million pensioners and about 4 million public sector employees that on the 27th of every month, have to receive their pension or their salary. There are millions unemployed and there are hundreds of thousands of companies that have closed down. There’s lower tax revenue for the same costs, covered until now by the debt, by the sale of State bonds, and this will lead to a collapse. The cover given by bonds has become too limited.
Thus let’s go on to the scenario that is practically “in underpants”. Block on the paying back of State bonds when they come due, for Italian citizens, collapse of some banks, cuts to the salaries of public sector workers, cuts to pensions by 20/30%, temporary block on getting access to your current account with a maximum daily amount of 100/200 euro, suspension of credit cards, privatisation of the Eni and Enel quotas and any State good that has a market. Measures to be added to those for the “soft default” and the “almost soft default”. In any case, there’ll be a period of recession and of collapse in consumption; unemployment will go up and secessionist pushes will increase, in the South and in the North. “All is Chaos under Heaven, and the Situation is Excellent”, Mao Tse-Tung.

What is there that is less democratic and obscure than a bank? I’ve thought about this for a long time, but I’ve found nothing. In recent days, there’s been a discussion about presumed kickbacks in relation to the reconversion of former industrial areas in Sesto San Giovanni and the involvement of the PDminusL person, Penati, who was mayor at the time. Basically there are investigations about a circle of bribes to increase the value of the land formerly occupied by Stalingrado d'Italia with the idea of constructing buildings on the land. The usual story that has already been seen in Santa Giulia and in dozens of other similar operations. Destruction of the territory, contiguity between construction companies and politicians, and environment devastated for generations. The apex of the triangle, the banks, however, almost come out of it clean, and often they are not even cited. Sesto San Giovanni docet.
"Banco Intesa takes action on Sesto. Detailed negotiations for new offices with 5-6 thousand office workers in an area of the former Marelli. The official agreement has not yet been reached, but it’s certain that the negotiations are moving ahead fast and the signature on the sales document could be really soon.” (Corriere della Sera 26/1/2001). In response Penati said: “If the hypothesis of an agreement is formalised, Banca Intesa will be welcome. The regulations in our regulatory system make it possible for the establishment of high-tech service industry on the areas that are no longer used.” Intesa decided not to go ahead, but it was still present. Pasini, the adventurous owner of the Falck area who declared that he had handed out bribes destined for Penati, at a certain point, sold everything to Risanamento di Zunino, who bought the area thanks to a team of banks led by Banca Intesa.
At that time, Risanamento was a group that was a rising star, the owner of the area of Santa Giulia in Milan, a massive residential neighbourhood used to bury every type of carcinogenic refuse but it finished up under sequestration. However, Risanamento mysteriously always had the trust of the banks and thanks to them it avoided bankruptcy. The same banks that refuse to give an overdraft or a loan to a small company were creditors of a company with debts of THREE billion. Which banks? Unicredit, MPS, Banco Popolare and, naturally, Banca Intesa, that is now IntesaSanpaolo.
Penati is also in the eye of the cyclone for the purchase of 15% of the Milano – Serravalle (for an inflated sum) from the entrepreneur Marcellino Gavio. Penati, president of the Province of Milan, asked for and received a loan of 250 million. From whom? From IntesaSanpaolo who obviously didn’t verify the coherency of the investment. According to Albertini, the former mayor of Milan, Gavio raked in a net profit of 179 million. IntesaSanpaolo was also a partner in the disastrous Alitalia affair (disastrous for the coffers of the State) saved to be then gifted to Air France, but also in Telecom Italia with shares bought at 2.2 euro when anyone with a tiny bit of knowledge of the sector and of Telecom would have paid half that. In fact, IntesaSanpaolo is now obliged to devalue investment with the Telecom share decidedly below one euro (today at 0.888) with a loss of 120 million euro. The ownership and money of the banks doesn’t belong to the banks, but to the current account holders and the shareholders.
It cannot be used “ad minchiam" {frivolously} for lobbies or adventurous speculation. The “fiato sul collo” {breathing down your neck} approach adopted for the towns has to be replicated for the banks that are pulling the strings of the marionettes of politics in the shareholders’ meetings and in every possible occasion. They will never give up (but is it in their interests?). Neither will we.

Now that I’ve read the book "Soldi rubati" {Stolen money} I feel better. Our illegal economy is the best in the world. With corruption, waste, European fines, mafias, tax dodging , I’ve lost count: 500 billion, 600 billion a year? "Tra questa immensità s'annega il pensier mio" {In this immensity my thought drowns} but however I’ve got a little doubt. If this mountain of money were to come into the hands of Tremorti, or Bersani or Berlusconi, how many TAVs would they do, how many Messina bridges and how many incinerators? In a blink of an eye, Fassino, the military of the Val di Susa, would transform Italy into a logistical aircraft carrier. We find ourselves between tax dodging waste and destruction. "io nel pensier mi fingo, ove per poco il cor non si spaura" {I pretend in my thought , to the point that my heart is almost overwhelmed} .

Interview with the journalist Nunzia Penelope, author of "Soldi Rubatii":

Italy: collapse or decline
My name is Nunzia Penelope. I’m a journalist dealing with the economy and I’ve written a book to show that illegality is not just an ethical problem, it’s a cost. Our public debt of 1,900,000,000 could be reduced to zero in 10 years if we started fighting tax evasion and corruption. That means 120 billion a year for the first year and 60 billion for the second year.

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The bottomless pit of tax evasion and corruption
When I go out and about, I hear people who shrug their shoulders and say: “OK, but how can you get back the money from tax dodging?” Shall I tell you how? For example counterfeiting that can seem to be very banal, that stuff that means you can buy fake handbags on the beach from the vendors from the Maghreb. Counterfeiting costs the Italian economy 18 billion a year.

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Money wasted on the Great Useless Public Works
The problem is if we were to recover this money, how would it be used? Because naturally in an ideal world this money clawed back from the thieves could be used to increase pensions, to offer redundancy pay to all who need it, to pay unemployment benefit, for services and so on. In reality we live in a country where one of the reasons, that’s certainly mistaken,

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photo: reelaboration Financial Times
To know what our future will be like it’s enough to observe what’s happening in the shadow of the Parthenon, in Syntagma Square, where for days there’s been a confrontation between the police and the citizens of Greece. Papandreou, the Prime Minister of Greece, will next week re-emphasise his plan for “reforms” to get a new international loan. The reforms are the usual ones in the face of collapse. Auctioning off of national resources amounting to 50 billion euro by 2013 (the so-called “privatisations”), cutting public services, or “restructuring” with the reduction of 20% of state employees, about 150,000, in the next four years as well as the increase in direct and indirect taxes. The cost of living will go up and an increasing number of people will not be able to afford it. It’s probable that Papandreou, who in order to save himself is suggesting having a government of “national unity” (does this remind you of anything?) will soon have to resign. There would then be new elections with a probable victory of the Right as happened in Portugal and as, in all probability, will happen in Spain.
The multinationals have been reducing their presence in Greece for some time now, and some have already abandoned it. To reduce the risk they make sure they are paid by the State in cash, as happens in the pharmaceutical sector. In a year and a half, from the moment that the crisis was announced, Greek banks have lost 17% of their deposits, about 40 billion euro, because of transfers carried out by international companies. The Greek default will create a domino effect with unforeseen consequences even in the European banking system. The banks with the greatest exposure to the collapse of Greece are the French banks with 53 billion euro concentrated in Crédit Agricole, Sociétè Générale and BNP Paribas. But they are not the only ones. There’s also Germany with 34 billion, the UK with 13.1 billion and Portugal (the next on the list for default) with 10.2 billion.
In Italy the debt is moving towards 2,000 billion in 2012. The relative risk of our bonds is increasing and has gone above 200 points in relation to the German bund. Basically Tremorti has to pay more interest to sell our debt, our promissory notes and he is scraping the barrel with taxpayers (individuals and companies) by means of Equitalia. The Greek default could be the new “Lehman Brothers” with instead of the banks, the States together with the banks. No one wants to open Pandora’s box, but perhaps it has already been opened and no one has said anything.

Denying the existence of the plague is the best way of spreading it. Denying the existence of a possible Italian default is the best way of making it happen. In 1720 there was the last occurrence of the bubonic plague in Europe, in Marseilles that at that time was one of the most important ports of the Mediterranean. The death rate was 56% and out of 90,000 inhabitants, 50,000 died. The city appeared to be well equipped to stop the spread of the contagion. It had an isolation hospital, a leper hospital and strict entry regulations for ships coming from the East and it had staff dedicated to applying the regulations.
Everything started with the arrival of a ship loaded with merchandise from Sidon. Some of the sailors on the ship died during the journey. The captain, called Chataud declared the deaths when the ship entered the port of Livorno. The city’s medical officers wrote on the health certificate that they had to be kept on board, as there was “a malign pestilential fever” on the ship. Chataud notified the Marseilles port officials, but instead of quarantining the ship, they had it come alongside the hospital’s pontoon where the crew went ashore and the goods were disembarked. The doctors who examined the numerous infected sailors declared that it wasn’t a case of the plague, but a common fever. The sailors and the citizens of Marseilles died in a few days and some doctors finally said that it was a matter of the plague. The ship was quarantined, but the passengers were quarantined just for 15 days, for those ships without cases of infection. Meanwhile, the administrators of Marseilles kept the news of the plague secret, (but it leaked out) so as not to cause a crisis in commercial activity. The surgeon doctor at the hospital continued to deny that it was the plague and he classified it as a fever due to “fruit that had gone off as it was over-ripe”. The citizens were disoriented. On the one hand they suffered the effects of the illness that cut them down like a scythe cuts down ripe wheat, on the other hand they felt reassured by the officials and the doctors. It got to such a point that the communal ditches were no longer sufficient to hold the dead. The Parliament of Provence had to intervene and it completely isolated the city of Marseilles, but it criticised the doctors who had diagnosed the plague calling them “alarmists”. The city council did not admit that the plague was spreading even when presented with the evidence. In less than a year, one of Europe’s most flourishing cities was destroyed.
After that, the “denialist” doctors published an academic book in which they explained that the plague was not an infectious disease, since most of the officials survived. In fact they had reached safety together with 10% of the population (the richest people) who managed to escape before Marseilles was quarantined. Bertrand, a holy hermit, was the only one who tried to warn the people of Marseilles in time, and he was accused of having spread the disease and was thus burned at the stake. Standard & Poor's has cut its rating outlook for Italy from stable to negative. Tremorbi, where are you hiding?

A gentleman called PIG, is about to go bust. He’s got a great idea. In order to survive, he’s selling his debts. He calls them State Bonds. Many people are buying them; they only want a low rate of interest and a tiny bit of interest when the capital is returned when the loan arrangement ends. Mr PIG has found the system for living above his means. He continues to get debts and to sell them. His family accounts however get worse and to protect themselves, those who buy his bonds, are asking for a higher rate of interest. Mr PIG is obliged to increase the interest rates. Over time, the situation becomes critical. The number of people buying the debt goes down as they are afraid of the risk. The debt is no longer triple A minusminus, but a triple B plusplus. The time will come when Mr PIG is no longer able to pay the interest. The neighbours of Mr PIG who have lent him most of the money, have nothing to gain by making him go bust. If he goes bust they will lose their money. Thus they offer him a loan with lots of conditions, something they call a “bail out”.
Mr PIG is obliged to accept so as not to go bust. When the money from the loan dries up, Mr PIG finds he’s paying more interest than before. Those who have lent him money have only gained time and now they are doubly at risk, they can lose both the State bonds and the loan that is the bail out.
Mr PIG, technically a bankrupt, is thus able to raise his voice as though it were he that had lent money to the others. He threatens to restructure the debt. In other words, those who bought his bonds at 100 will see the value halved to 50 and Mr PIG will be freed of half the debt with no one being able to stop him doing so. The creditors, who are ever more worried, don’t know which way to turn. In fact, the State bonds, like those of any company quoted on the Stock Exchange, can lose their value. The creditors have one thing in common with Mr PIG, the currency. Once upon a time, Mr PIG used the Drachma, now the Euro. His behaviour is putting at risk the good name of the currency of the virtuous gentlemen that have no debts or few debts. The Euro cannot be compromised. The neighbours can throw out Mr bankrupt PIG from the Euro and see part of their credit go up in smoke for ever or continue to give him finance with one “bail out” after another. Germany and France have about 250 billion dollars in Greek State bonds and because of Mr PIG, the Euro is losing value in relation to the dollar and the yuan. Mr PIG leaves the Euro and his State bonds become waste paper. I would like to find the logic and the moral of the story, but I cannot.

In the year 2010, 11,000 enterprises went bust in Italy. An increase of 20% over the figure for 2009. In 2011, the trend has not improved. In the first three months, each day 30 enterprises have closed. A silent disaster that relates to all sectors. The worst hit is the industrial sector followed by construction, commerce, and telecommunications. The greatest number of failures has been in Lombardy, followed by the Marches, then Friuli and then Veneto.
Lombardy and Veneto form the engine of the Italian economy and that’s the area most badly hit by the crisis. The figures are confirmed by the ciies where there are the most companies that are closing up shop for ever. The first is Milan, the second Treviso, third Bergamo, fourth Vicenza, fifth Venezia, sixth Brescia. In a bit it’ll be the people of the Po valley that’ll have to clamber into the boats. Ever more frequently, it’s the small and medium sized companies that are going bust. By now there are truly very few big companies, almost all of which are State concessionaries, like Benetton, Mediaset and Telecom Italia, or de facto monopolies like Eni and Enel. Names that have been with us since our infancy like Omsa "Che gambe!!" {what legs!}, Bialetti with “Omino coi baffi” {the small man with a moustache} and Indesit with our very first washing machines. To have an enterprise in Italy is an act of heroism, many have thrown in the towel, others have emigrated, others still have never got started. The banks give you financing or a credit only if you don’t need it. However there’s no solution for the development of the Italian enterprise. And without that what’s left is just the definitive collapse of the State and mass emigration (but where?). The companies that get rewarded in this country benefit from financing from the public purse or from the banks. They have political recommendations; they deal with activities that are contrary to ethics, as happens for the feeding troughs of nuclear and of the incinerators. OK, these companies don’t go bust. The blog wants to think about the other ones. From today it’s offering the possibility for existing companies to have access to funds aimed at ethical companies. The requests for financing are to be sent to the blog by using the forms in the area called "Imprese per il futuro" {enterprises for the future}. They will never give up (but is it in their interests?). Neither will we.

When the French asked for bread, Marie Antoinette, wife of King Louis XVI, exclaimed: “If they have no bread, let them eat cake.” What followed was the Revolution with its baskets of chopped off heads. Mubarak, Ben Alì and Gaddafi instead of cake, have distributed hot lead to the people. A few hundred dead among the demonstrators has not been useful in stopping the North African Revolution. Mubarak has been struck down by a heart attack, Ben Alì has disappeared and Gaddafi is taking refuge behind snipers and the isolation of his country. Is what is happening now like the “assault on the bread ovens” or a revolution for democracy, or both? Is poverty revolutionary? Is the stomach revolutionary?
There’s an economic indicator, called the misery index, created by Arthur Okun and it measures the poverty of a State. The index is found by adding the rate of unemployment to the inflation rate. The higher the value, the greater the misery. In the latest classification, Egypt was in 6th position, Greece (close to defaulting) in 7th place and Tunisia in 9th place. A relationship is evident. But who is seen in the first four positions? Chavez’s Venezuela is at the very top, followed by South Africa, Spain and Pakistan. These countries are among those marked out for forthcoming revolts in the near future. The negative position of Spain is surprising, as is the astonishing position of Italy, in 23rd position with a better score than the average for the EU and better than France, UK and the Czech Republic. Finally a positive score. Let’s split the castanets with Spain (misery index 22) with 10, 1,- less than half (source: Eurostat and IMF).
Our score relates to the year 2010 and it is made up of 1.5% inflation and 8.6% unemployment. But these figures exist just in the books of “Tremorti’s” dreams. In fact, ISTAT itself has given a figure of 12% for unemployment (3.4% higher than the official value), but in reality, if you consider those that are no longer looking for work, it’s about 14%. Inflation is calculated on the basis of a ‘basket’ that does not take account of the real cost of living. Anyone who is paying the electricity bill, central heating, petrol, motorway tolls and basic necessity goods knows very well that inflation is at at least 5% a year (3.5% higher than that declared). If we use the ISTAT figure for unemployment, then Italy works out at 13.5%, close to Ireland and Portugal. If we keep going, adding in the extra 2% of discouraged unemployed people, we arrive at 15.5– a hair’s breadth from Turkey and Tunisia. Finally, if we make use of the perceived inflation we reach the top with 19 as the score for the misery index, so in fifth position on a par with Egypt and ahead of Greece.
At the time of ‘Bottino Craxi’, there was optimism of desire, today, there’s the optimism of desperation. The people are no longer given cake but cannon balls. Who knows how it will turn out this time.

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P.S. Meetings for the creation of 5 Star Civic Lists have been organised in the following towns:
Abano Terme, Arezzo, Arzergrande, Chivasso, Crotone, Este, Montignoso, Montefiascone, Ospedaletto Euganeo, Rocca Priora,Sennori, Vasto, Vimercate
Suggest a meeting in your own town .

What’s happened to Europe? Has it ever existed? In the beginning there was the euro and after that nothing has happened. If Europe is just a currency, in its absence Europe doesn’t even exist. Since 2008, the year of the crisis, in the European meetings they have discussed the public debt, the ‘spread’ for the different shares, held by the banks, default and a triple A rating. The European Banking Union has got substituted in people’s imagination with the actual European Union.
There’s no trace of a common foreign policy. The Mediterranean is in flames and Europe is as mute as ever in these situations. And yet what happens to Egypt, and more generally to North Africa, could lead to a new war for the Arab countries against Israel and an increase in the price of oil that cannot be sustained by the PIGS economies that are already on their knees. On the other side of the Atlantic, Obama has intervened, basically to get rid of Mubarak, while all Europe can do is to issue a communication to Trichet about the exposure of the European banks in relation to Egypt.
I have been to Brussels. I have seen the school children coming from different countries visiting the European Parliament. I had the impression that the youngsters were on a trip to a funfair, to a gigantic mausoleum inhabited by functionaries and euro-deputies, a ‘Club Med’, a cemetery for elephants that houses the residue of politics like Albertini and Occhetto or Mastella, the refugee from Ceppalonia. For others, it’s a trampoline towards the national parliament. What Union can we talk about if there’s no homogeneous fiscal system, common research and development, a shared policy on the flow of labour and of political refugees, a shared battle against the mafia?
Russia is represented by Putin, America by Obama China by Hu Jintao, but Europe? Who represents Europe? The first name that springs to mind for most people is Angela Merkel who has no European position. However the identification of Europe-Germany lies in the facts. Without Germany, this Europe held up by the German economy, would disappear. And yet it is getting wider, it is getting ever longer, like a blown-up balloon, we have got to 27 states, each of which in order to guarantee its future, has to run like Germany or risk losing national sovereignty, after monetary sovereignty, as is happening in Greece and Ireland. Italy, in this company, is playing the part of the one that signs up in principle to every directive about agriculture, commerce, environmental protection but then ignores them. Implacably, every year, we are getting hundreds of millions of euro in fines. We are Europe’s Tafazzi {masochistic comic character}. “If we are together, there’ll be a reason”. Perhaps we need to hurry up and find the reason before we get the order to "Break ranks".

P.S. Meetings for the creation of 5 Star Civic Lists have been organised in the following towns:
Alatri, Arezzo, Arquata Scrivia, Chioggia-Sottomarina, Chivasso, Codogno, Grezzana, Modugno, Nardò, Nerviano, Nettuno, Policoro, Rocca Priora, Salsomaggiore, San Giuliano Milanese, San Martino in Rio, Statte, Vigonovo
Suggest a meeting in your own town .

While Italians are hypnotised by the bunga bunga journalists and by the wiretaps based on flaccid arses, the economic collapse of the Country is at our door. At the Davos conference they are wasting their bets on the chance of our defaulting. The latest lifejacket from Tremorti is to bring about the equation: Public debt = private savings. He has not made a secret of this. The country with the highest taxes in Europe wants to go beyond that. Federal taxes are approaching and they’ll be retroactive. The only true success of the Lega that will administer the coffers of the Local Authorities.
You can hear a sound in the air that takes the form of a flying prick, the one that makes the sound of the straight property tax. They have sent Giuliano Amato on ahead. A guy that got directly into our current accounts and took out 0.6 per cent. Amato is part of that Socialist party that made the public debt explode, a continuous operation performed diligently on behalf of Berlusconi, the successor to ‘Bottino’. Amato proposes grabbing 30,000 euro from a third of the tax payers, the richest ones, to save the country. A measure that affects those who pay taxes, but not the big wealth holders. Whoever has paid, will pay more. Perhaps they will have to get a mortgage on their apartment. They say: “But it’s to save the Nation! Whoever has the most has to give the most.” As a principle this reasoning is not flawed, but to throw into the furnace of a public debt that is growing at 100 billion a year something taken from the wealth without making structural measures (the abolition of the Provinces and the grouping together of the towns with less than 5,000 inhabitants, for example) will just punish those who have always paid up to the last cent of their taxes. With what cheek can this be done by a government that has launched the Fiscal Shield with taxation at 5% on that wealth that had completely dodged taxes? A Ministry of the Economy that sends detailed reprimands for tax declarations with errors of 40/50 euro that does not even minimally tackle the 100 billion a year of tax dodging? ‘Tremorti’ should send a thank you note to the faithful tax payers, and give them a discount on their next income tax payment.
Since last year a few million public employees have had their salaries frozen. Inflation is not waiting for them and every month they are losing something (like Anna in the song by Dalla). Anyone who is today below the age of 50, will never retire. If they succeed it’ll be a miracle or by recommendation or a regional councillor or a parliamentary deputy. We have gone beyond the fruit course at dinner and the drink after the meal. We are clearing the table and the State is preparing to collect the crumbs from underneath the table.

A weak currency makes national products competitive. Exports go up and the GDP increases. The other side of the coin is the increase in inflation. Most raw materials are bought in dollars, a depreciation in the value of the currency of one country in relation to the dollar means an increase in the price of oil, of gas, but also of soya and of wheat. Thus exports increase as does inflation. In theory the invisible hand of the market should, over time, mean that the right value is given to each currency. In practice, the currencies are used by the governments to distort economic relations between States. It’s what is called “The currency war”. The International Monetary Fund (IMF), since the beginning of this year, has been trying to define some rules to establish the value of the currencies, but it has been ignored by everyone.
The emerging countries of South America and in the East are at the centre of this war, on whose outcome their economic survival depends as does ours. Brazil has reacted to a collapse in exports, due to the increase in value of its currency, the ‘real’ by devaluing it. In 2010 Brazil’s balance of trade with the United States went from plus 15 billion to minus 6 billion dollars. In order to continue to produce and export it has accepted an increase in inflation with all the consequences that this brings, and in particular the impoverishment of the most vulnerable social classes. For at least a year, China has been keeping the value of the ‘yuan’ artificially low in spite of the protest of the whole of the Western world and Japan who are accusing it of unfair competition. If the value of the yuan were to go up significantly (as it should) the Chinese GDP would go down with catastrophic effects on employment. The Currency War is like a massive game of “Risk” in which each move causes a reaction in every other part of the world map. In South America, Chile, Columbia, Peru and Mexico are in reality devaluing their currencies. It’s a massive race to go lower with global impoverishment. A war in which Italy is playing the part of the clay pot among the iron pots. It is tied in to the euro, whose value is much higher than that expressed by its economy that has basically been in recession for 10 years. It has a public debt that is going towards 2,000 billion euro by the end of 2011. It cannot be devalued to improve exports; it cannot invest because of the cost of the interest payments on the debt (this year we will pay about 80 billion in interest, equal to about four substantial finance bills.).
Italy’s exit from the euro, if it were to happen, with a new ‘lira’ and the subsequent devaluation, would change nothing. We would find ourselves with double digit inflation and no exports. The top countries in terms of exports apart from China are in fact the United States, Germany, the Netherlands, and Japan. They are exporting innovation and technology, what would we export? No longer public debt and we have already exported the "made in Italy" companies. Perhaps we will abandon the lira for the ‘scec’, a local currency, for the town, for the neighbourhood, for the condominium.

It was the year 2006. The exaltation of the “necessary” immigration, “so that the country can grow”, “wanted by the industrialists” was a bipartisan lie, shared by the Right and the Left. By the Right so that it can control the pricing in the labour market, by the Left for electoral reasons. Paolo Ferrero, the Minister for Social Solidarity, said: “In the continent of Africa it’s likely that there are thirty million young people aged between 18 and 25 who are ready to leave their homes and their loved ones” and he added “it is they who come and do the work that often the Italians no longer want to do … Today we have to understand that we have become a country of immigration.” Ferrero hadn’t understood a thing. Prodi went home and ‘Rifondazione Comunista’ was eliminated from Parliament. The immigrants “come to do the work that the Italians no longer want to do” have above all been made use of in the building industry. Italy has been ‘cementified’ with new public buildings, overpasses, with additional lanes on the motorways, with warehouses, residential areas without residents. Those who have been constructing, especially in the North, have raked in sums of money that have never been seen before. The new arrivals have been treated like modern slaves, underpaid, often sacrificed to the God called Money with human offerings called “White Deaths” {deaths in the workplace}, without social security, they are ‘invisible’ citizens. Five years have gone by. Work is a chimera. Real rates of unemployment are at 14% if you consider the ones who are ‘discouraged’, the ones who are no longer looking for work. Out of every four unemployed people, one is a foreigner.
Since 2008 the number of foreigners without a job has gone up by 95,000 people and 80% of them are in the North. Once more we have become a nation of emigrants. If in the EU the first ones to leave their countries are those from Romania (1.9 million of whom almost a million are in Italy), in second place there’s Italy with 1.2 million people, almost all of whom are young, and often with degrees and diplomas. The overall number of foreigners without a job is 235,000. Unemployment among foreigners will double in a short time. That’s an easy wager. The reason is simple. The building industry, the only sector that has been growing in Italy in the last decade, is in its death throes. By the end of the year 2011, it will have 290,000 fewer workers than in 2008. The other sectors of industry have been in a structural crisis for some time. They can’t create jobs. The growth of GDP in Italy from the year 2000 to the present day is the worst in the world apart from Haiti. Once the wild cementification boom finishes, there’s almost nothing left for the foreign manual workforce. What will happen to them? Italian unemployed people have reference points, family, friends, but the foreigners? Meanwhile the ‘decreto flussi’ {Quota Agreement} is looking at a further 150,000 people coming from abroad. In order to allow them to come in, it’s necessary for 150,000 Italians, possibly young and with degrees, to go out in order to leave space for them.

Marchionne is just one of the Agnelli family’s employees. He is paid to make them gain and to act as a lightning conductor. Nothing more. His crudeness of language (and of action) that falls down in the pure provocation for those who have been laid off, or sacked and for those workers that accept every condition so as not to lose their job, is unacceptable. Their bosses are putting a muzzle on them. If Fiat has every right to move production abroad, the Italians have a still a greater right to present them with the bill. For decades it has been the Italian taxpayers to pay the profits of the Agnelli family and the big shareholders, ranging from the fund for the laid off workers when Fiat had its accounts in the red, to the financing of the “cash for clunkers” to the incentives for the factories in the South. The voice of the Agnelli family has not yet been heard during these negotiations, let them pack up and leave, but before that, let them pay the tens of billions that they owe to the Italian State.

“We are a group of Italians under the age of 40 living and working abroad but still having direct contacts with Italy to which we are connected by fondness and nostalgia accompanied by the anger of seeing it in constant decline.
Not one of us has up until now been directly involved in politics, even though we feel a connection with the Left in its widest sense, but what is happening cannot leave us indifferent. This is why we have decided to demonstrate our worries about a few important topics:
- Marchionne’s blackmail and the imposition of a contract rather than through negotiation
- the referendum that is similar to the plebiscites of the “Ventennio” {the twenty years of Fascist rule} in which the only choice is between unemployment and conditions imposed by the owner
- the departure from recognised constitutional rights by means of agreeing private contracts
- the renunciation of the national collective contract amidst silence from the Confindustria and most of the trades unions (that from the beginning should have refused to sign a contract that was different from the national one for the Mirafiori factory workers)
- the exclusion of the biggest metal-mechanics trades union from the union representation.
We consider all this to be very serious.
We find it even less acceptable in a period of economic crisis and we reject the attempt to make the workers pay the costs of the failure of neo-liberalism. We are astounded by the embarrassing silence of most of the Opposition, and especially the Opposition in parliament, and we think that the time has come to decidedly take sides. The FIOM Is not just defending the Mirafiori workers. It is defending the Constitution, democracy, and the freedom of choice. It is basically defending the possibility of a future for our country, that seems to us to be getting ever more distant.

...

Laura Andrazi, Paris, France - Alessio Baldini, University of Leeds, UK - Giorgia Maria Battistello, Six Telekurs, London, UK - Tommaso Cavazza, Barcelona, Spagna - Francesca Congiu, University of Leeds, UK - Ilaria Giglioli, University of California at Berkeley, USA - Matteo Giglioli, Palo Alto, California, USA - Simone Giovetti, United Cities of France (Cooperazione Francese), Francia - Silvia Gurrieri, Paris, France - Giandomenico Iannetti, University College London, UK - Salvatore Marchese, Brno, Czech Republic - Nicola Melloni, London Metropolitan University, UK - Vasco Molini, Maputo, Mozambique - Valentina Rigamonti, USAID, Afghanistan -Pietro Roversi, Oxford University, UK - Davide Sormani, Brno, Czech Republic - Gigliola Sulis, University of Leeds, UK - Elia Valentini, University College London, UK - Alessandro Volpi, London, UK

To make contact and join up:
http://www.facebook.com/home.php#!/home.php?sk=group_169410559768904
italianiallesteroconlafion@gmail.com
http://twitter.com/#!/perlafiom


P.S.The following meetings have been arranged for the creation of 5 Star Civic Lists in the following towns:
Canino, Capoterra, Carmagnola, Cassino, Ciriè, Corigliano Scalo, Crotone, Fuscaldo, Isola Della Scala, Nogara, Roseto degli Abruzzi, Siena, Sennori, Viadana

Suggest a meeting in your town.

(4:16)
Today I received an email about the collapse of the Banco Emiliano Romagnolo (BER) and the freezing of current accounts and securities accounts (that are not owned by the bank) in accordance with an order coming from the Bank of Italy. The blog has checked up by making a telephone call (the voice has been modified to avoid problems for the person who gave us this information) and found that this is all true. Just try and imagine yourself waking up tomorrow without the possibility of getting access to your current account, to the bank machine, to the securities you hold, to the automatic payments made through the account. How would you feel? Below I’m giving the notification I received and the interview with the BER.

Notification

”I want to tell you that the Banco Emiliano Romagnolo has been blocked by the Bank of Italy and that all its current accounts have been frozen so as to stop everyone from withdrawing money. They are trying to sell the bank to the Intesa Group. Nothing more is known. And they say that up until 7 January nothing more will be known. They will have a peaceful Christmas holiday! And it’s not because of the cold weather! Like so many other people, I find that I cannot receive payments into my account, or my salaries, nor can payments be made and I cannot take money out. All this has happened without warning and keeping everything hidden. Even now you cannot read anything about it in the newspapers. You ring up the bank directly to see that it’s all true:
0514135595 - 0514135539
Greetings" A.C.

Transcript of the telephone call made by the blog to the BER:

BER:It was during a measure taken by the Bank of Italy on 7 December when they established the freeze on the money coming in and going out of the current accounts, this protection of the current accounts, looking after the transition procedures that are applied right now means that the account is frozen. It’s not possible to make or receive payments, process direct debits or use the cash machine. The account is completely blocked. Unfortunately even we employees are in the same situation. We cannot do any shopping. If someone has another possibility, the situation has been crystallized in the state in which it is found. You see, we ourselves who could have protected ourselves, to make a withdrawal, we ourselves were told from one minute to the next, above all in the relationship with the clients. At 6 o’clock in the evening, this decision became affective when it was published in the Bank of Italy’s Official Bulletin and in the national newspapers. On the morning of the 7th when the branches opened, they told us this. It’s a drastic measure and it clearly causes and will cause all sorts of enormous problems that I suppose the Bank of Italy can do and it will get loads of denunciations. Be that as it may, obviously, the ones with big difficulties are above all the companies. A terrible disaster.
Blog: Apart from the money held in the current accounts, how about the way the bank acts as a simple intermediary in relation to the escrow accounts for securities. Has even that been blocked? BER: Yes. Everything. Completely everything.
Blog: The securities are in the name of the current account holder, not in the bank’s name. BER: Yes. They are blocked in as much as they cannot be transferred from one account to another, they are there and they stay there until they are unblocked. Then each person can do what they like with them.
Blog: So in this period of “freeze” I cannot deal with my shares? BER: No, but nor can you use your current account.
Blog: Not even through another organisation? BER: Absolutely not. You see not even the dividends coming in, are being dealt with.
Blog: On my account it’s easier to understand because it’s an asset of the bank. BER: I understand your point, however even securities are part of a sort of total liquidity. I believe that most people are worried about liquidity to go shopping, to pay the mortgage, the utility bills, the rent.
Blog: Yes, in the worst case, if the current account is blocked, I sell some shares and I get by in another way.
BER: Yes, I understand , certainly, in fact this is a problem for the Stock Exchange, for everything, because there’s a sort of contract of sale, at least of negotiation, and anyway there’s investment as long as it holds up.

1,867,398 million euro is the new record for the public debt. In October we devoured 23 billion, in September the debt was 1,844 billion. On the same day as the record that drags us towards the economic abyss, 14 December 2010, at the Chamber of Deputies, Berlusconi won by 314 votes to 311.
An obscene clash took place in the hall of the red velvet , a clash between the companions who can smell the odour of revolution in the streets and are trying to save themselves with a double back flip, like Fini, disowning 15 years of mess-ups like Bersani and Casini. In the Chamber that was reduced to a stage of money-grubbers with pre-show quips and sudden applause that squashed the fear of the future (like those at the coffin carried on shoulders as it is leaving the church) you would have needed the madness of a guy like Lombroso to interpret the faces, the smirks, sneers, and exploits. To illustrate a new anthropology: the shit one. In a Parliament of people who have been sold, you cannot talk about votes that have been bought, just as it isn’t possible to find virgins in a brothel. The show put on by the deputies had one more performance. Actors with starry salaries, dark blue official cars, election expenses (theft) amounting to a billion euro thrown out by a referendum, journalists at their service paid with a pittance of 329 million while the country is plummeting. Look at them. Don’t they disgust you?
In all that, the Chamber this morning seemed like a meeting place for old mates. Berlusconi cuddling Casini’s neck, the guy Bocchino betrayed, the guy Fini paralysed by a vote that pensions him off after 40 years of a political career in which he has seen nothing, heard nothing, and said nothing before coming out of the sarcophagus, Fassino’s “vajassa” {servant}. Ms Mussolini’s lips and Ms Carfagna’s lips, Frattini’s sunglasses. The pregnant women, including the lawyer of Andreotti-the mafia-guy in-a-wheelchair. The “corte dei miracoli” had more dignity, a circus has more seriousness, a whorehouse more dignity.
In 2011 the economic crisis will sweep away this laughing humanity that has taken possession of the State and the media. Social ragamuffins that have found in politics the only route to success, to feel important, indispensable, “honourable”. I will not save anyone and I just hope that they will all withdraw in time, before the action is taken by History, that is, as is known, unpredictable and ferocious.

The crisis of the Irish banks is no novelty, no more than the one in Greece was and just as the crises to come in Portugal, Italy and Spain won’t be. It’s a matter of months. Each time there’ll be shock like there is when there’s a sudden summer thunderstorm. Yesterday Merkel announced that the crisis is extremely serious and that the Euro is at risk. And we who didn’t know that … Politicians give bad news only if they are obliged to. They wait until the last possible moment, to save us from useless suffering. To have a discussion about Ireland, or at the beginning of 2010, of the default by Greece, is equivalent to concentrating on the hole in a holy bucket. The colander is the whole of the West that is collapsing under the weight of its public debt that has increased by an average of 50% in twenty years. The emerging countries, the so-called BRIC countries: Brazil, Russia, India and China, have a limited public debt and they are buying up the debt from the West. If China were to sell all the American State bonds that it owns, with a value of 883.5 billion dollars, the United States could collapse.
The world is shifting to the South and to the East. The GDP of the BRIC countries is about to be greater than that of the G6 (Germany, Italy, France, United States, Great Britain e Japan). The BRIC countries have a very low public debt to GDP ratio: Russia 6%, China 18%, Brazil 45%, India 59%. Just think, Italy’s is 118% with 80 billion euro in annual interest to be paid, a figure that would kill an elephant. The United States are about to reach the Everest of 14,000 billion dollars of public debt compared to 6,000 billion in 2002. In the past, wars were fought with weapons, today they are fought with public debt. Whoever buys your public debt becomes your master.
The United States, the most indebted country, Is responsible for 50% of the world’s military spending. An enormous amount. Russia, the historical antagonist, is spending 3.5%. The United States is transforming the debt into weapons. So basically anyone buying United States stocks is financing the war in Afghanistan and the military bases of Dal Molin of Vicenza and of Okinawa where they have been settled in for 65 years. The Roman Empire collapsed under the attack of the barbarians at its borders. Its legions withdrew from the Rhine and from Britain. Perhaps the United States will follow the same idea because of the economic impossibility of keeping 716 military bases in 40 countries. Ireland is a symptom of the sunset of the West overcome by its public debt. Winter is arriving for the European and American cicadas and outside its getting colder still.

Ms Merkel has told the G20 that the Germans will not pay for the public debts of the other European countries. Who is she talking about? Greece, that in the last few days has seen the interest rates shooting up, the rates it has to pay to sell its State bonds, then Ireland, ever closer to collapse and that will perhaps not be eating Christmas cake at Christmas time, (even if the EU is preparing to make available a sum of 80 billion euro to help). Finally the Chancellor is thinking of Portugal and of Italy.
By now Italy has gone beyond the simple PIGS. It is a super-PIG. The Financial Times includes it among the three weakest economies in Europe together with Greece and Portugal (and thus worse than Ireland!). The growth capacity in our country is zero. It is in position 179 and next to the last in the world just above Haiti in the decade that has just gone by. It’s impossible to do worse. A petrified Nation. Italy has got been standing still since 1999 for innovation and for development while its public debt has exploded and has arrived at 1,844,817,000 in September. Tax revenue has gone down with the same rapidity as the increase in the figures for unemployed and laid off workers. The value of tax revenues in September was 21,814,000 euro and in August it was 33,889,000 (that’s a decrease of 12,075,000, or 35.6%)! Unemployment is 11% (more likely 14-15%) while the average for the OECD is 8.5%. The fund for laid off workers has been paid out for a billion hours, or more precisely 1,026,479,655 hours. That’s an increase of 44.2% in relation to 2009. It’s seems like the disaster of Caporetto (and it is)!
The economy of the country is collapsing and the newspapers and the politicians are talking about Fini and Bersani being invited as guests on Fazio’s show and bunga bunga. The destiny of Italy is no longer in its own hands, but in those of our foreign creditors who are holding 1,400 billion of our public debt in State bonds. And the ones at the top are France and Germany. Merkel and Sarkozy and the International Monetary Fund have probably decided for us. To have Draghi as President of the Council because of the trust placed in him by international finance and an unprecedented “shock treatment” for our economy. They have no choice to try to save their investments and perhaps even the EU itself. The helicopters are warming up.

Where have you been? Fini and Bersani, De Benedetti and Tronchetti, D'Alema and Prodi, Berlusconi and Geronzi, Tremorti and Visco, Bossi and Casini, Marcegaglia and Benetton while day after day, Italy has been plundered of its wealth and of its future? And by how much has your personal fortune grown in the last ten years? You who are the ones explaining the economy to us in the newspapers and on TV? While you and your peers have been living it up for ten years at the expense of the country, Italy has been going down. Growth has been subject to a heart attack. From 2000, according to research given in the daily paper El Pais, out of 180 nations only Haiti has done worse than Italy. The whole world has developed more than we have apart from Haiti, one of the poorest countries devastated by an apocalyptic earthquake.
From 2000 to 2010 there have been alternate governments on the left and on the right, and at the head of the Confindustria and the banking system all the ones who are responsible for our decline that by now is irreversible for at least a generation. We are the worse ones on the planet, not just worse than Burkina Faso in position 44, or than Montenegro at position 115. All without distinction, have done better than us, apart from an island in the Caribbean. The moment has come to declare the collapse of a governing class, the worst one in the last 150 years, without exception, taking no prisoners. Collusion even more than corruption has been the dark evil that has infected the body of the country. The best have got by with handsome golden handshakes or with prestigious honorary roles. The worst have devoured the economy in common agreement, from the selling off of Telecom, to the Alitalia disaster, to the funeral rites of Italtel and Olivetti.
A public debt that is ever greater is knocking on our doors with hundreds of billions of euro to be placed at the beginning of 2011 if there is to be no default. It’s not a matter of being alarmists, but realists looking at the face of reality. The debt will be at 1900 billion within a few months. However, the debt cannot grow forever. It’s inevitable that there’s a point of no return. The debt has been growing while the economy has been static for an eternity. The sick ones of Europe, the so-called PIGS, have developed more than us in the last ten years. Ireland is at position 131, Greece at position 132 and Portugal 178, just one position above us is on the edge of the abyss.

Portugal and Ireland are following the same trajectory as Greece, in order to sell their shares they have to pay ever more interest to justify the investment risk. However Italy is optimistic, even with the worst growth in the world and the biggest public debt in Europe, it’s always in denial, it always denies. And it will be like that right up to the end. The Tremorti Mystery. Into the catastrophe with optimism.
El Pais rankings showing growth 2000-2010 – as given in Italiafutura:
positions 1 to 73, pdf
positions 74 to 180, pdf
(reworked from data given by the International Monetary Fund – IMF, pdf)

When Chiamparino of the PDminusL or Tosi of the Lega were dealing with Intesa San Paolo and Unicredit, they did that as shareholders wanting to get the dividends. This is because the parties indirectly control percentages of the banks by means of the banking foundations of the various cities, from Turin to Verona. The throwing out of Profumo was down to the drying up of dividends coming to the Foundations. The increase in the Libyan participation in Unicredit was a pretext, in fact who still remembers it? How much money arrives at the 88 banking foundations each year? A flood of money. The Italian banks distribute half their net profits in dividends to shareholders. The Foundations use this money for non-profit projects in the territory. The profits of the banks are spent by the Foundations for activities of their choice (whose possible range of choices is very wide) to obtain an electoral advantage. The parties can also decide the banking appointments. An example is Chiamparino who chose the president of the Board of Directors of Intesa San Paolo in that, as an auditor, he was delegated by the ‘Fondazione San Paolo’ that owns 10% of Intesa San Paolo.
Fassino who rejoices in having a bank or Boss(ol)i who wants the banks of the North after the victory in Piedmont and the region of Veneto are symptoms of a ‘bedlam of roles’, words from the schizophrenics of politics transformed into bankers. Whose task should not be gathering in dividends or appointing people to banks, but administering the public good. Money buys agreement, votes, and this is one of the hidden tasks of the Foundations. The capitalisation of the Italian banks is among the lowest in Europe, basically the coffers are in tears. The mechanism of the banks being ‘cows to be milked’ that are not reinvesting an important part of their profits because they are destined for the parties is about to end. The first reason is the crisis, the second is the result of new rules from Basel III that imposes the increase in equity capital in relation to possible risks, by 2013. The safety blanket is shrinking. Which will collapse first, the parties at a local level or the banks?
PS What I would like is for the spending by the Foundations and the motivation for each choice to be made public, right down to the grassroots in a way that is understandable to the citizens.

What’s the use of Italian banks? This question that is simple, so simple, has many replies, and none of them is reassuring for the saver. If the parties are the waiters of the bankers, the bankers, on behalf of whom do they operate? For whom are they serving at table? Who is pulling the strings of the great bankers of the world of finance, from Passera to Geronzi? What is the real power of these folks? Judging from the end that has befallen Arpe and Profumo, who were sacked between the morning and the evening, not a lot. Some of them last longer than the others because they are more functional to the system. The banks are responding to higher interests. Interests that are unknown to most people. They invest savers’ money in black holes, as happened with Telecom, with Alitalia, and with Air One. Grants thrown down the toilet but provided by using the money of current-account-holders, of those who deposit their savings. The banks always know today what their clients will know tomorrow. This is the trick that allows them to sell the derivatives with a hole inside or to give advice about the purchase of Parmalat bonds right up to an hour before they go bankrupt. The banks can give advice; can sell shares in companies with non-existent value, as happened with Saras, whose shares were immediately devalued by the market, without ever risking anything.
The Italian banks are a de facto monopoly. Their services have a cost that is higher (often much higher) than European banks. They are at the service of politics and the lobbies. They provide financing for cement and nuclear power stations, TAV, and the Messina Bridge, but to get a loan for a small-scale entrepreneur for his company or a mortgage for a family is worse than climbing Everest. The banks decide whether a company lives or dies, whether a territory is destroyed or regenerated.

Interview with Beppe Scienza of the Mathematics Department in the University of Turin

Banks, the real enemy
”I am Beppe Scienza, and I specialise in mathematics and money, in financial mathematics and today we are talking about taxes, about taxes because the topic is always interesting for Italians. Italians hate the taxman. I’m not going to discuss whether this hatred is justified, whether it is exaggerated, about which there is speculation; however, there’s one thing that needs clarification. For savers the true enemy is certainly not the taxman, but in general it is the banks, the financial system, the investment funds that are taking away money from the savers, much more money than the taxman takes. The discussion relating to savers concerns the managed savings, and in particular investment funds that are relevant to about 10 million Italian savers and I want to say a few words to start off with. This time I don’t want to quote my own data, but figures from another source: ‘Mediobanca - Research Department’ and here there’s something to be said: because some people think of Mediobanca and they say: well just think, there’s Cesare Geronzi, the Ligresti family, what sort of people are these? I’m not going to discuss that. I understand very well that one may turn their nose up at these people. However, apart from Mediobanca itself, there is ‘Mediobanca - Research Department’ and this is led by a person who is unknown to most people but to whom the Italian savers should create a monument. He’s Fulvio Coltorti, a reserved person, an academic, a researcher, a really capable economist who doesn’t enjoy publicity, a person who is adamantly honest. For almost 20 years, each year with his research office he puts the Italian investment funds under a microscope and what is coming out are accusations that they would not be able to save themselves from if it weren’t for the Italian press which is an accomplice in helping the band, the wrecker of managed savings. Thus I am taking as my reference point the figures from the Mediobanca annual report.

...

The fable of the Wicked Wolf and the five little pigs: Greece, Ireland, Italy, Portugal and Spain continues. If Greece was the first little pig to be eaten up by the public debt and by the upset of the banks crammed full of derivatives, Ireland is the second chapter in the story. The biggest Irish bank, Anglo Irish Bank, is on the brink of collapse. It needs money, to be recapitalised. If it goes bust it will take Ireland with it and this is why the government is obliged to intervene (for the second time) by bringing 35 billion euro of aid to the banking sector with an increase in the public debt and in taxes. The Anglo Irish Bank is at risk above all in the real estate market that is plummeting all over the world. Sooner or later, all the banks, including the Italian ones, will have to devalue their real estate heritage and present it using real market values. It is a sure contamination that will put at risk the banks that have invested in cement. The real estate sector in Italy is over-valued, doped by information. Houses are worth up to a half of what is declared. The big cities are carpeted with signs saying “Vendesi" {for sale} and "Affitasi" {for rent}, but no one is selling and no one is renting. And when it happens, the price is decided by the buyer, or the tenant, not the owner. The question that the Bank of Italy should be asking itself is: "By how much should the banks be devaluing the real estate and how many of them are risking collapse?" However, the skies of the cities and of their suburbs are always crowded with cranes-without-wings, who is financing loss-making projects? Which banks, which insurance companies are putting at risk the savings of their savers? While in Parliament they are talking about “nothing” and they are qualifying for a pension after two and a half years, the Wicked Wolf is getting close to the door of the pig called Italy.

fonte: Financial Times

The ratio of the Public Debt to the GDP sees Italy in second position with 118%, with very little distance from Greece at 125%, but above Portugal and the other happy little pigs. If money attracts money, debt attracts debt. The EU will impose a penalty of 0.2% of the GDP on PIGS states and by doing that, it will increase our debt. A brilliant idea that will allow “Tremorti” to issue other State bonds to pay the additional debt. Italy is hanging by a thread, and it depends on the ability of “Tremorti” to sell new debt and to pay the ever higher interest, about 80 billion euro in 2011. The more you sell bonds, the more the interest you pay. The greater the increase in the gap between our production and that of the other European countries, the more the interest that you pay to compete with their State bonds. It’s a never-ending spiral. When the Wicked Wolf knocks down the door it will perhaps be a relief.

Profumo’s exit is not just a matter of money. The CEO of a bank stays in the saddle for 2 reasons, either he is functional in the system like Passera of IntesaSanPaolo (remember Alitalia?), and in some cases it’s he himself who is the System as in the case of Geronzi, or he produces profits, distributes dividends, and makes the shareholders rich. Profumo belongs to this latter category of bankers.
For some time now Unicredit has not been a source of income for its shareholders. Last year the dividends were distributed in the form of shares. The shares however have constantly lost value. A share in 2009 was worth 2.64 euro down from the pre-crisis value of 6.50 and yesterday a share was at just 1.94 euro. Today it’ll be worse, there‘ll be a stream of selling. The 2009 profit was down to 1.7 billion, a result that is more than acceptable in the current situation, but well below the more than 6 billion in 2007. In the last two years, the shareholders have financed the bank with capital increases of the order of billions of euro, but they have received nothing in return. Their money has evidently not been sufficient if it has been necessary to take on board “cavaliere bruno Gaddafi”. Unless there are surprises it is he who is now the key shareholder of the top Italian credit institution with 7.5%.
Profumo has always paid for his partial independence by giving the shareholders their “pound of flesh”, but Unicredit is not his bank, he’s not the owner, he’s an employee, the top one and the most important but in fact he’s an employee. Behind his ousting after 15 years, unless there are last-minute rethinks by the System, there are all those who have been kept out by Profumo, starting with Boss(ol)i’s Lega, the one connected with the collapse of Credieuronord, that wants the banks, as well as the Foundations commanded by the parties and by their minions, and also Geronzi, the 70-plus president of Generali, who as well as Arpe’s scalp now adds that of Profumo, then there’s the lobbies connected to the Bank of Rome and the Bank of Sicily merged into Unicredit. The list of Profumo’s enemies is as long as the Boot of Italy, until now, his shield has been made up of the results and the protection of Allianz, the German shareholder that supported his candidacy 15 years ago.
Profumo is a banker, not a saint, but he was one of the few held in high regard in Europe, and like Matteo Arpe he was ousted by the System when the time came. Behind them there’s nothing, the parties. From today the banks are even more “Cosa Loro” {their thing – like Cosa Nostra}.

Super-capitalism is a tyrannosaur in uncontrolled liberty. Its cage was thrown open definitively with the collapse of the Berlin Wall on 9 November 1989. From that time it has no limits. It has become bulimic. It devours what remains of the social democracies without let up. It’s growing. It’s growing year by year. The World Trade Organization (WTO) was born in 1995, seven years later. 97% of the nations of the world belong to it. It has the aim of abolishing every tariff barrier to international trade for everything: commercial goods, services, intellectual property. Production has been delocalised anywhere in the world where the cost of labour is lower because there’s a lack of checks on safety, trades union rights, protection of the environment. And often the same minimum rights with the recruitment of armies of child slaves under the banner of profit.
The multinationals have cashed in the gains of super-capitalism. They have protected their T.rex through the media that have praised it and that are praising its virtues and have demonised the “ anti-globalisation” campaigners. The market and democracy have fused together, as though man himself is becoming an out-of-date product. The conquests of generations of people to get a social State (what else can a State be if it’s not “social”?) have been cancelled out. And the ones that still remain are being constantly transformed into dis-services for the glory of T.rex as has happened with public water: “The aqueducts are not functioning? We’ll give them to the private sector!” Less State, more Market.
Is it possible to control a starving T.rex? Its stomach is the planet. Derivatives, futures, swaps have been able to infect world banks for almost twenty years to the indifference of the supervisory bodies of the States and of the international organisations. A new 1929 that has started but has not yet finished. The States have become markets, fabricators of optical illusions, specialists in debt. Dozens of States have already gone bust, others will follow. For the moment, to keep T.rex calm, there’s the creation of new debt to add on to the debt. A contradiction in terms.
Italy in its small way does not draw back from the banquet. The images of Gianni Agnelli and Luciano Lama seem like photomontages. Marchionne and Rinaldini are two parallel lines. They can never meet. Marchionne is blackmailing the government, and he can do that, legitimately, with T.rex at his side to protect him. Serbia and the delocalisation at 400 euro a month for each worker are waiting for him. Super-capitalism is an excess. It will die by itself and it will be replaced by another excess that is equal and opposite. Obviously, unless we die first.

Wiretapping record April 2010. Imprecise location in Brianza.

B/P3:Italy has gone bust
T/Rex: It’s enough to just not say so
T/Rex: and to say the opposite is even more effective!
B/P3: But Italy has gone bust all the same. Every month the public debt is growing by 10 to 15 billion. You know perfectly well that in a bit it won’t even be able to pay the interest on the debt … Telling a pack of lies is no use any more …1900 billion of debts forecast for spring 2011 …
T/Rex: We will make use of the policy of the Anti-phrases (*)1...
B/P3: Anti-phrases ?
T/Rex: Yes, it’s a bit like the Anti-mafia that makes an agreement with Provenzano
B/P3: (Laughter…)
T/Rex: It’s simple. We’ll do the opposite of what they did in Greece.
B/P3: Explain.
T/Rex: George Papandreou announced the default. You’ll say that we have started the recovery, that we are better than the average of the European States. (*)2
B/P3: Yes sure – I can say that. You know that’s not a problem for me … but the ship is sinking all the same … Real unemployment is the highest in Europe. Salaries are the lowest and the money in the fund to pay laid-off workers is about to dry up.
T/Rex: Greece first declared there was a crisis and then it put into action the anti-crisis measures. They presented a shit image… We, however, will present a great image. We will put into action the anti-crisis measures without announcing the pre-default. But we will say they are for the recovery
B/P3: The Italians are stupid but not to that extent…
T/Rex: You have always over-estimated them. Otherwise folk like Ingroia and Travaglio would already be in prison to the jubilation of the populace. Anyway, you can always try later with them…
B/P3: Have we got an alternative?
T/Rex: Yes – the “coup d’état”, but I just think of it as a back-up measure. Papandreou put a block on the salaries of public employees, he increased pensionable age, he put the Greek islands up for sale (*)3. We’ll do the same. We’ll call it a package for development and we’ll say that it’s Europe that obliges us to do it. Italy will be sold off to the private sector by means of “ Federalism of public property”, for the pension that’ll come only after 40 years of contributions and there’ll be a block on public sector increases for three years. The important thing is to keep the Confindustria and the banks onside. We won’t touch the gains of the public concessions and we won’t tax the banking sector.
B/P3: What would you say to some “spaghetti alla puttanesca” and some European seabass?
T/Rex: Great idea. And while we are eating I want to talk to you about Public Parks in concession to the private sector and a tax on grinding, you know … Luigi Menabrea’s old law of the 1800s
B/P3: Ah – but the default, will we manage to escape it?
T/Rex: No, but no one will notice

(*)1 Anti-phrases: it is saying the opposite of what you are thinking. It’s divided into irony (lighter) and sarcasm (heavy).
(*)2 A fact that actually happened with the declaration of the Italian GDP growing by more than the European States (+0.4%)
(*)3 March 2010, the Greek government put in place a series of measures aimed at restoring public accounts to health. Measures included blocking the salaries of public employees and a reform of the pension system, for a total of 4.8 billion euro.

Mussolini’s Italy had eight million bayonets, while the Italy of the new millennium has 17 million pensioners. Before you can go on pension you will have to wait for them to depart en-masse. Those who are currently working (or looking for jobs) keep on seeing the bar being raised, requiring 35/40 years of contributions and perhaps even more. In essence, today’s twenty or thirty-year-olds will never ever be able to go on pension. The odds of anyone being able to work continuously for 40 years without any break in service and with full monthly pension fund contributions to the INPS are about as good as the odds of winning the “Superenalotto” lottery.
The Country is split into two classes: the pensioners and the lost. Lost because they are either working at piecemeal jobs, off the record, or are unemployed, underpaid or terminated. Because their pension is merely a social mirage. Pensions are the true "class divide" in Italy. It’s not right to expect young people to increase the pensionable age and increase the number of years of contributions to qualify for their pension while there are entire battalions of pensioners receiving two or three pensions, parliamentarians that qualify for full pensions after only two and a half years of service in the legislature, millions of pensioners who receive a pension for which they only paid half, or even less, of the normal contributions, hundreds of thousands of so-called “baby pensioners” and pensioners with gilt-edged pensions. The minimum pension must be guaranteed at all costs, as well as all those pensions for which the required contributions have actually been paid. In all other cases, what is needed is a tabula rasa. Unless this happens, all those people that are currently paying contributions to the INPS, especially the younger ones, should refuse to contribute even a single Euro more. It’s like throwing money down the drain. No one can guarantee whether and when you will get it back.
Making sacrifices should be expected either of everyone or no one. What is the current situation regarding the pensions paid to former parliamentarians, former Regional and Provincial Premiers, former ministers and municipal leaders and former State Presidents? How many consulting pensioners are there in this Country? How many pensioners is out there that are getting more than 4000 Euro? How many of them continue to vote in favour of maintaining the status quo with regard to pensions together with the two-faced Pdl-Pdwithoutanel?
It appears that the only those who have reached pensionable age can get ahead. The combined age of the Berlusconi-Napolitano duo is almost ONE HUNDRED AND SIXTY YEARS. The weirdest thing is that the "lost ones", the youngsters without any present and even less of a future, not to mention no pension, have not yet got really pissed off. They are destined to work like slaves and then die on the job, just like the oarsmen of the Roman Galleys. Meanwhile, the 4000 Euro a month plus pensioners will be living it up at the Club Med with boxes of Viagra their bedside tables. Come on guys, I say not a penny more to the INPS, it’s far better to hide your money under the mattress. Watch this space for more advice and suggestions in future.

If Totò Riina and Bernardo Provenzano were to open up a rating agency on the development of criminality in Italy, what results would they produce? Criminality Outlook: zero. A Triple A for Italy. The maximum points for a civilised country. The same is happening for the OECD, the Organisation for Economic Co-operation and Development, the white knight of every Italian economic crisis.
In its "Economic Outlook", the OECD explains that in Italy “the recession ended halfway through 2009”, news that will put at peace the spirits of the Italians upset by Greece in its near future. The OECD is financed by 31 countries including Italy which is one of the major contributors. It has its headquarters in Paris, 2,500 EMPLOYEES and a mammoth budget of 320 million euro a year (2009 data). The OECD is a hymn of praise to Tremorti’s economic policy: “The government’s policy has helped to limit unemployment, which will however continue to rise slowly in 2011 (thus it is rising even in 2010 – editor)”. The OECD gives a great evaluation of Italian unemployment without however taking into account the “discouraged” (those who are not looking for work because they have lost every hope) and the fudged collection of sample data that considers someone to be employed even if they have worked for just a few days in the last six month period: “The rate of Italian unemployment is anyway lower than the overall rate for the euro zone and the rate for the United States”. It’s a hymn of praise to Italy that manages to “maintain a low primary deficit, inside the levels established(?)” and to the government that “managed to maintain unusually low the growth of the overall spending in 2009”, but the OECD does not reveal that Italy has accumulated about 100 billion euro of public debt in 2009 and about thirty since the beginning of the year (“unusually low growth in spending”, and thus, by how much should it grow to be unusually high?). The Italian salaries are the lowest in Europe and now, after Tremorti has frozen the salaries of state employees for the next three year period, often figures barely above 1,000 euro a month, the salaries are moving towards being the lowest in the Mediterranean. In compensation, Italy has the level of taxation that anyway remains higher than the overall level in the euro zone and higher than that in the United States.
According to the OECD, Italy is going slowly, but it’s going (but where is it going?).Italy that is paying some of its 2,500 employees. The OECD among the useless bodies is the most damaging (where was it before the economic collapse in 2008, before the collapse of Greece (a member country)?)
Let Tremorti withdraw financing from the OECD, he and the psycho-dwarf have no need of help, no one can touch them when it comes to telling tall stories.

The economy has disappeared from the front pages of the newspapers and from the television news headlines and has become yesterday’s news. Yet the Milan Stock Exchange continues to lose more of its already scant value. The Telecom Italia share price has dropped below the one Euro level and now stands at 0.972. The share price of Intesa San Paolo, the Country’s largest bank, have shed 33% of their value since the beginning of the year (*). In general, share prices have lost between 20 and 30% of their value. Ms. Merkel has stated repeatedly, on several occasions, that the Euro is at risk. The reason for its collapse is the level of National debt. The Government bonds that underpin the debt of the PIIGS could turn into scrap paper at any moment, as occurred in Greece. National debts converted into government bonds are the equivalent of the toxic derivatives that have caused banks to fail worldwide. After the banks fail, Countries themselves begin to fail. Now, in order to keep the Euro alive, Germany will have to step in and underpin the National debt of Countries like Italy by buying up Tremorti’s debt. But why should they have to do this? In Germany, the citizens pay their taxes while in Italy, tax evasion is estimated to amount to 130 billion Euro per year. In Germany, there is no fraud amounting to hundreds of millions of Euro against the EU, there are no Mafia groups turning over somewhere between 100 and 150 million Euro every year and corruption doesn’t drain 50 billion Euro like it does here in Italy, so why should the Germans help us? Why should the German citizens have to do without social services or have to delay going on pension because of criminal mismanagement of public funds over the past 25 years by the likes of Craxi and Berlusconi? Ms. Merkel insists that public debt and deficit limits be established for member States and that any Country that doesn’t comply with these limits be expelled. Tremorti has met with the individuals that we inexplicably insist on referring to as ministers but who, without Berlusconi, would be nothing more than mere trainee pen-pushers in some or other public body or perhaps station toilet cleaners. Tremorti has threatened to resign unless cost cuts amounting to 24 billion Euro are implemented. He of all people should know that we need to cut at least 100 billion and that no elected government can afford to impose that kind of budget cut on its Country’s citizens, not even spread out over time. In 2010 alone, while our public debt is increasing at the rate of 100 billion per year, Tremorti will have to sell a few hundred billion Euro worth of fixed term government bonds. But who on earth is going to buy them? Unless the EU buys them up, which it won’t, the holiday is over. We could perhaps ask the Mafia to buy them in Exchange for favourable laws. Now there’s an idea. Tremorti should think about doing that. Perhaps that’s his last hope before he hops on a helicopter. The best option nevertheless remains that of selling Italy off to Germany in exchange for a debt write-off. That way Italy would become Germany’s southernmost protectorate, a balcony overlooking the Mediterranean. Merkel for president. Now!

(*) data as at 20/5/2010.

Ps.: A "No smog parade" will be held in Florence on Saturday 22nd, a demonstration against the smog and traffic induced stress, against allergies and tumours and against the non-compliance of the public administrations. The appointment is for 14.30 in Piazza della Repubblica. Come by bicycle or use public transport to get to the demonstration!

What can any European Country do to sustain its own inefficiency without going bankrupt? To spend more than it collects? Once upon a time, in extreme cases such a country would simply have devalued its currency. All of the Country’s citizens simply became 20% to 30% poorer. Exports increate due to the more competitive pricing of the Country’s goods. The people tightened their belts and everything went on as normal. The advent of the Euro meant that this type of thing was no longer possible, however, increasing the level of public debt by issuing more Government Bonds has remained a viable option. To all intents and purposes, Government Bonds have replaced the ability to print more money. The product to debt ratio is a good indicator of a nation’s health. The less it produces and the more it gets into debt, the closer the Country comes to bankruptcy. The issuing of debt by means of government bonds has no limit, as long as someone is prepared to buy the bonds and the government is able to meet its interest payment commitments and pay back the monetary value when the bonds expire. If public finances decline, as in the case of the so-called PIIGS, the interest payable on government bonds already issued increases and the number of buyers decreases due to the increased risk of default. If the PIIGS fail, then their creditors, namely the virtuous Countries of northern Europe, could also fail in turn. The European banks in Germany, Holland and France, which are indebted to the tune of hundreds of billions of Euro, would be totally swept away should Italy or Spain ever default. There is something truly diabolical about the issuing of debt and its calculation. The creation of debt is totally beyond the control of the average man in the street. In the past year, for example, Tremorti has managed to increase the Italian population’s level of debt by around one hundred billion Euro, without asking or saying anything to anyone. He then sold this debt on, partly to the very same Italians that he plunged into debt in the first place (the perfect 69, isn’t it?), and the rest he spread around the entire planet. The security of the debt lies in the apparent security of the government bonds. Their yield may well be lower than that of other investments, but they are deemed to be a safe investment. It would appear that the reimbursement of the face value of the government bonds at the time of expiry is guaranteed, which is not true in the case of shares traded on the Stock Exchange, which are subject to market fluctuations. Government bonds, in other words the purchase of third party debt, are somewhat like a totem pole: a State cannot fail. This popular belief enables Countries to sell off their debt, thereby enabling them to make yet more debt. If a Country fails, it usually loses all of its invested capital in one fell swoop due to so-called "debt restructuring ", which is a nice way of saying that the parties that purchased the debt are left standing in their underpants. In order to avert bankruptcy, Europe has agreed to buy up any government bonds issued by the PIIGS that would otherwise have gone unsold. For this purpose, Europe needs the 750 billion Euro that have already been allocated (not enough according to many analysts). This in order to buy up any debt made by reckless governments. The myth of intangible government bonds that will be bought back in any event upon expiry must be eliminated once and for all. A Country should be assessed in the same manner as one would assess any public shareholder company, in other words, if its financial value drops, its share value for the shareholder must drop accordingly. Investments would then focus more on the creation of value rather than its destruction. Making debt is something done by the reckless, selling it off is something metaphysical and purchasing such debt is an act of pure folly.

Ps. The Friends of Beppe Grillo in Roma wish to advise that the hearing scheduled for 12 May, in the trial of Warrant Officer Vincenzo Lo Zito, has been postponed for reasons of legitimate impediment, being the non-availability of the Warrant Officer's defence attorney to attend the hearing. A new date for the hearing will be announced shortly.

Nothing is ever created and nothing is ever destroyed. Refuse is a re source and while nothing may be created from a diamond, something can be created from differentiated refuse collection, from chairs, to building materials, to indoor flooring and prefabricated goods. The Vedelago Recycling Centre stands as proof that refuse disposal can become free of charge if we practice differentiated refuse collection. While incinerators cause illnesses, recycling creates jobs. The Vedelago recycling centre employs some 9,200 people. What we need is a Recycling Centre like Vedelago in every province. This blog will provide visibility to any new initiatives. We should be incinerating our refuse collection bills, not our refuse.

Interview with Carla Poli of the Vedelago Recycling Centre.

How does the Vedelago Recycling Centre work?
Blog: "Dr. Carla Poli, we have come here to see the Vedelago Recycling Centre. What do you do here at this plant? "
Carla Poli: "We receive the differentiated refuse from various Municipalities and companies, everything except the organic waste, and we proceed to separate out any material for which there is a ready market. Any material for which there is no ready market gets recycled into raw materials and secondary raw materials, for which there is a ready market.
Blog: "Starting with what? "
Carla Poli: "Starting with waste material that is not immediately usable in its current state, while any bottles and containers are sold off to factories that make new bottles or batteries. This is all the assorted plastic material, still with some paper on them, as well as all the other waste material that used to be sent off to the rubbish dump or to the incinerators. This is a sample of flooring material made from our granulate together with recycled wood chips. This flooring is used in prefabricated buildings, as interior flooring and non-slip exterior flooring, In other words, we have the techniques and the research has already been done. We have had to invest our own money because, until now, we have never received any funding for our research and testing in collaboration with the universities …. "
Blog: "So this material comes out of this plant? "
Carla Poli: "We don’t produce it, there is another company that makes it, but we have now established a new production chain, namely the manufacturing of consumer goods! In addition to this flooring, this material is also used instead of wood to produce chair seats and backrests, like this little armchair. All these chairs still need is to be upholstered. These are boardwalk sections for the beachfront, they are used extensively and they’re made 100% from our material. "
Blog: "Even bollards? "
Carla Poli: "Yes, they contain a certain percentage. We have to continuously research and test. We have to ask ourselves: how do we manufacture this item? How much of this granulate can we use? What can we combine it with? For example, here we have some rubber left over from our recycling of copper cable, the possibilities are endless so we have to research, look for applications and experiment. Pallets, for example, those are used in construction. They have to be submerged in cement in order to improve the aeration and seismic resistance of buildings. The company that used to make them here in Italy, in Ancona in fact, eventually closed down because it was uncompetitive in the marketplace due to its costs, but now, thanks to this new research and application, the company has been re-opened. 80% of this igloo consists of our granulate, or up to 80%, so even partial utilisation of our granulate contributes towards reducing costs. The important thing is our system, not the fact that we have a plant that can be replicated, nor the fact that it can be made to work anywhere, we can .... No, our system relies on organising the territory, in other words, we need the support of the public entities because these public entities are required by law to treat urban waste, while the industrial aspect is a totally different matter. The companies are doing a great job of differential refuse collection because it is saving them money, that’s all there is to it, understand? Amongst themselves, the San Pellegrino Group, the Vera Group, Gatorade and the entire Benetton Group all have canteens and they all practice differentiated waste disposal for the simple reason that it enables them to cut down on their running costs. A method like this can be exported into the Campania region, where the situation is desperate. In Campania, they have to start up the plants, which they already have but which are not working!"
Blog: "That’s because they have been converted and they no longer generate power from waste. "
Carla Poli: "Does this mean that it has to be taken to the waste disposal dump or to the incinerator? Well, either it goes there or it goes off for recycling, the material has to go somewhere! "
Blog: "There is a mountain of eco-bales that no one knows for sure what they contain … "
Carla Poli: "Eco-bales are a totally different problem. You have to know what… we don’t handle unsorted material that arrives in bulk. If you want to go this route, and I’ve said it three times already, then you have to arrange for appropriate refuse collection upstream, because no one wants to work in chaos. Instead, if the dry fraction of the refuse arrives, without any organic matter and we find that it has 4 or 5% humidity, then we will correct the error, the percentage error, not the mix error that is … if you’re not prepared to do this, then the stuff must be taken to the dump. It is obvious that there are certain very specific rules … If a Company mixes its production waste, which may be plastic fragments, with the waste from its canteens, you must understand that we won’t even touch it because we need material, not raw refuse! Those that do differentiated refuse collection must understand that there is a big difference. So the recycling starts here, we transform the stuff into primary and secondary raw materials, as you can see, here you can see it perfectly, this is… you see the dry fraction? There is no smell, do you smell anything here? There is much less smell than there is in the packages because if there is no organic material, it logical. This stuff would all have been sent to the disposal dump, but at least 80% of it, you see that racket … is plastic, so that was our logic … "
Blog: "You get your hands on this stuff … "
Carla Poli: "No, this goes directly into the process, but we do check it to make sure that it is properly sorted. This, instead, is plastic packaging material for which there is no ready market and the Conai National consortium earmarks it for disposal or incineration, but we are able to recycle it. All this material is re-checked before going up to the plant. There is a magnet along the way, so if there’s any metal items … we even recover any metal and aluminium here … because within the dry fraction, someone may overlook a tin can, which we then recover, as well as even the smallest pieces, which we sell. It’s aluminium after all, there are machines to do this job, and it is used in… "

A virtuous industry
Blog: "In your opinion, can anything be done about the compromised material like the eco-bales from Naples? "
I don’t know what is in those eco-bales, but if they include organic material … if it is busy fermenting, which means that it includes organic material, then the first step would be to remove all that organic material, otherwise it can’t be turned into … "
Blog: "Otherwise we wouldn’t be able to breathe here in the first place … "
Precisely! Instead, that problem doesn’t exist here. Let’s skip ahead. After this, it goes into that machine whose blades are being replaced at the moment, where it gets cut up, then heated and melted, then cooled until the temperature drops to around 160/180°, so there is no combustion, the plastic material is simply melted. It also includes certain other materials, such a wood chips, in accordance with legal requirements because there are in fact existing laws, regulations and UNI standards in place. After densification, the material is cooled because it comes out hot. It then goes into that grinder, which is actually called a granulator, then into a screener that separates the smaller particles from the larger ones, after which it gets bagged. "
Blog: "So, these bags contain the magic material then! "
Carla Poli: "This is a type of material that, this is densified material, comes out soft, you can see how soft it is, and then hardens into granules, or even this … because we don’t make any end product, we merely produce the raw material for other companies."
Blog: "Are there those that want it a little coarser … "
Carla Poli: "I don’t keep any material in stock, we only produce to order, booked beforehand. We always produce what the customer orders, for example, if we have a customer who wants the material more or less dense, more or less cooked, more or less fine, then we produce it for him, we’re not a supermarket that has a 3 for the price of 2 sale, here we have to produce what we can sell because if we get 100 tons coming in every day, then 100 tons must go out at all costs every day! "
Blog: "How many people work in a plant such as this? "
Carla Poli: "We have 64 employees, however, we also send some materials out to other companies for processing. There are a number of companies in Treviso Province that are involved in re cycling, for example, these crates are sent out to a company that washes them and then grinds them up into flakes, which they then sell on to another company that will use the material to manufacture new crates or perhaps basins. "
Blog: "So there is also secondary employment. "
Carla Poli: "Yes, there is secondary employment. A research institute has calculated that the secondary employment resulting from our company amounts to around 9,200 people. This is what they have calculated. We could do the work ourselves, but we would have to bring in special machinery and then we wouldn’t get around to doing what we do, namely the initial recycling! Up there is the platform where we do all the sorting and all these rooms will soon fill up, one with clear bottles, one with blue bottles and one with mixed colours. Once a room is full, we push the material up to the press, via these conveyor belts that feed the press, that green machine over there that produces bales, which then go to the production storage warehouse. This, instead, is a production stock pile, which means that, should one of the machines in the first section break down, the second section can continue working. This screen does a great job. It separates out all the light plastic, which has not ready market, as well as the small pieces of plastic. It is called the undersieve. It sends all the bottles and containers up to the platform and it basically does an initial screening of the plastic material so as to optimise production. If we had to do this by hand, we would require another platforms. You hear the noise? That’s because there is glass in this material. We organise all the various materials. A week before delivery we already know what type of material will be delivered so we plan our production around the various materials to be delivered. So, knowing what materials will be delivered, each of the work teams knows what has to be done. We know precisely what types of packaging or other material will be coming in … are sold either before or after they are actually delivered to us, so we have to know what it is and how we’re going to recycle it so that we can gear up our production. So, once again we come back to production. This is a closed circuit, as is the case in nature, not an open cycle. You see, recycling begins at school, because that is where we get the kids used to the idea of re cycling. These are bags of dry fraction, you notice that there are no black bags? We don’t want black bags because the responsibility lies with those that deliver the waste, so they must not think that it has to be concealed, you can see that this is dry fraction, so they are more careful, otherwise it will be seen because the truck operator has a clear view, so he may say: no, this is not okay, so please sort it properly and be more careful in future. If, instead, the bag is black, you can’t see what’s in it. This price we charge for this kind of refuse collection is..... nothing, understand? The other instead… packaging, tin cans, plastic, they separate at the schools, you notice how this stuff has all been separated? All we have to do is put it on the line. It all passes under a machine, if there is any metal or aluminium, because these days tins are made of metal, so, if its metal, it has to be separated from the… however, the bulk of the work has already been done by the schools, and it cost them nothing to do it because instead of putting it there, they put it here, so it is merely a matter of conscience, because they see because they come here on visits and they see what we do with the various materials. "
Blog: "How much would it cost to set up a plant such as this one? "
Carla Poli: "That depends on how much material has to be treated. If you want to set up only the first section or perhaps only the second section, then it cost us around 5.5 or 6 million Euro. But we are continuously buying new machinery , because it is not as if … here they have just loaded a truck with a specific type of material, so… but do you see our selection process? You see the containers, the coloured bottles, the clear ones, the blue ones, that’s what the Italian market wants. The black material, that’s the crates, then there is the nylon, while the assorted stuff that comes in... that’s how it arrives here. That white stuff is all polystyrene bags from a company that has already separated them, then there’s also the cardboard. We separate the cardboard and send it out to the paper recyclers, while the polystyrene goes off somewhere else. After this, there are all the other operations, in other words, the secondary employment is created by the various types of material to be processed. In Sardinia for example, where we will soon be inaugurating a new plant, which will merely be an official inauguration because the plant is already operating, a new co-operative has been established to utilise the granulate in the construction sector, because they currently purchase their sand from the Continent and this is costing them a fortune, they re-utilise it. However, businesses are now being established to utilise this material and, in order to do so, they have to find new ways. Hence the collaboration with the universities and research institutes in Cagliari and Sassari, which have excellent researchers, so we don’t have to go out and find researchers abroad because there are researchers right here, many of whom are indeed looking to go abroad! So we have agreements in place with various university laboratories because certain universities specialise in one specific field, while others specialise in other fields, so you have to go out and find them. This is a job that requires patience and determination, it’s a real job! "
Blog: "But not impossible."
Carla Poli: "No, it is certainly possible. We haven’t only been around since last year, we’ve been around for decades now. At first it was much more difficult to find ideal solutions. But once there are rules and regulations in place that stipulate …., all you have to do is toe the line!

Five Countries constitute the so-called PIIGS of Europe, namely Greece, Spain, Portugal, Ireland and Italy. "We’re five little piglets, five little brothers and no one will ever tear us apart, tralalalala!!" Contagious pigs, carriers of swine plague. A plague called debt, with which they have infected Europe. When one of the Pigs defaults, its creditors are also at risk of bankruptcy. The other European Countries must rescue the Pigs in order to save themselves. In terms of debt to European nations, Greece owes 236 billion Dollars, Portugal owes 286 billion, Ireland owes 867 billion, Spain owes 1,100 billion and Italy, the most contagious of all, owes 1,400 billion. The Pigs are even indebted to each other. Greece owes Portugal 9.6 billion Dollars, which in turn owes Spain 58 billion, which in turn owes Ireland 14 billion. Public debt is like a game of smoke and mirrors in which everyone involved could be left holding the baby. If Greece were to fail, Europe could still survive because the effects of Greece’s debt with other European Countries are still manageable. However, if Spain or Italy were to fail, the Euro would cease to exist. The greater the level of public debt of one of the European Pigs, the faster the spread of the contagion and its destructive effects. Via their public debt, the PIIGS have passed on part of their illness. They have lived well beyond their means, using the means of others. The contagion has already begun. Italy, the European Country with the highest public debt, has three major creditors, which it can bring down whenever it wishes (this is the power of debt), namely Great Britain, to which we owe 77 billion Euro, Germany with 190 billion and France with 511 billion. Italy’s debt to France amounts to 20% of our GDP. In other words, Italy has ceded part of its National sovereignty to France (they party that holds your debt is your master, that is until such time as you fail completely). This explains the unseemly haste to import French nuclear power stations into Italy. It is what Sarkozy wants! Italy’s debt to France is equivalent to no less than five nuclear power stations. Europe is held together byinterconnected debt.. The most important debt hub of all is Italy. Now, at the time of this Country’s 150th Anniversary, there is something to be proud of. No other Country can match Italy’s power to make Europe fail and perhaps we may still succeed! Pigs are born and, modestly speaking, we were born a Pig.

"We have to have fiscal federalism or else Italy will go the same way as Greece, it is absolutely essential." Bossi said this without adding that with fiscal federalism, the cost of which no one has bothered to work out, we will go the same way as Argentina. It’s hard to choose whether to declare bankruptcy immediately or to delay? The rating agencies downgraded the Greek government bonds to the status of trash. There is no longer a market for Greece’s debt and the Country’s bonds are completely unsaleable. The only ones buying them are the Greek banks, ordered to do so by the central Government.
Without access to debt, Greece can only plead for charity from other Countries in order to avoid bankruptcy and default on its public debt repayments, with its subsequent exit from the Euro.
This charity, which is inadequate in any event, has been slow in coming, and the aid required in order to avoid immediate bankruptcy is estimated to be 45 billion Euro. Greece needs to find 160 billion Euro over the next three years just to fund the interest payments on its maturing government bonds and its annual deficit between income and expenditure. The 45 billion Euro loan will be partly funded by the International Monetary Fund, to the tune of 10/15 billion, and the remainder by a number of European Countries, amongst them Germany with 8.4 billion and Italy with 5.5 billion (almost triple the amount contributed by Holland and more than Spain’s 3.7 billion).
86% of all Germans are against the loan. They don’t want to pay the price for other Countries’ free spending. Tremorti, instead, is very enthusiastic, but the opinion of the Italians is unknown, mainly because no one has even bothered to ask them what they think. Before handing over any of the German people’s money to Greek Prime Minister George Papandreou, Ms. Merkel is demanding some sort of assurance that Greece will balance its books. Instead, Tremorti is in a hurry to hand out the loan for fear that the fire will spread. Indeed, Greece is very close by. Our public debt currently stands at approximately 1,800 billion and during the first few months of 2010 it increased by more than 30 billion, while Italy’s unemployment rate is comparable to that of Greece. Our import/export balance for 2009 stood at minus 280 million Euro, while in 2008 it was plus 10 billion. Our tax revenues are declining month after month, our public debt is increasing continuously and our debt to GDP ratio is the worst it has been in the past ten years at 52.3%.
The Greek and Italian figures are very similar indeed. In some areas theirs are worse and in other areas ours are worse. If Greece eventually fails, the Euro will totter. If Italy eventually fails, the Euro will sink altogether, together with all our creditors. For the time being, our huge public debt is also our saving grace.
In 2010, Tremorti will have to move 450 billion Euro worth of government bonds and pay out 70/80 billion in interest (equivalent to 4/5 annual budgets) on the bonds already issued. The Greeks are absolute amateurs by comparison.

While on a trip to Columbia University, Mauro Gallegati interviewed Professor Bruce Greenwald, generally deemed to be the "guru of all gurus of Wall Street", and Joe Stiglitz, winner of the Nobel Prize for economics, on behalf of the blog, regarding the current crisis.

Mauro Gallegati: The current crisis poses a number of problems: what economic theories do we have at our disposal, is it possible to make a comparison with 1929 and how long will it continue?
Greenwald/Stiglitz: The crisis that began in 2007 has highlighted many of the problems of the liberalist ideology, in particular the idea that a free market can resolve all of our economic problems through the efficient allocation of resources by some sort of "unseen hand". And so, thanks to the idea that the liberalisation of the financial markets would lead to a sharing of the risk (via the derivati), market fundamentalism caused the economic system to take on more debt than what it would later be able to service. After a period of disorientation, the economic theory is busy regaining its earlier position. It is not difficult to believe that, once the crisis has passed, economic considerations will once again dominate, without any concern for the intellectual losses suffered.
However, contrary to popular belief, the economic crisis is not so much due to the crisis in the sub-prime mortgage markets but by the excessive indebtedness of American families, the public debt and the United States’ international trade deficit. It is almost as if the Chinese were funding American growth. Does anyone really believe that this process can continue forever?
One aspect that is often overlooked is the issue of unemployment, in other words, those who actually pay for the crisis. In the USA, the number of workers without jobs is far higher than the figure specified in the official statistics, which don’t reflect the chronically unemployed: if these were to be included, the unemployment rate would be hovering around 15%.
It is certainly important to rescue the financial system, but the real causes of the crisis will remain unresolved: Wall Street will get better, the banks will once again make profits, but the job situation won’t improve and the financial situation of the average American family will take a very long time to recover. In other words, the financial system will somehow manage to survive (until the next financial crisis) while the cost will be borne by the workers and the taxpayers. What about the families of Mediterranean Europe? You are hoping that the Euro holds on! For now, perhaps unwillingly, Germany will help out (forcing Greece to pay high interest rates on the financial aid). Will it do so again when it’s the turn of some other (large) Country instead of Greece?
Mauro Gallegati: Globalisation frightens many people and encourages others. What are your views regarding the future of globalisation?
Greenwald/Stiglitz: The fear that some Chinaman is going to take away your job is as widespread as it is irrational. This is because economies are structured differently. Agriculture provided the majority of American jobs back in 1850; now it provides less than 2% of jobs. Manufacturing was an important sector for more than a century, but now, in the USA, there are more people employed in the sports sector than what there are factory workers. Machines now do the work.
Globalisation will come to an end because we are moving to a post-industrial society in which services will dominate, which are in many cases not exportable (if your motorcar breaks down in Italy, you’re not likely to go and have it repaired in Bulgaria simply because it would cost less there). It is also not difficult to imagine that education and healthcare will be the leading sectors in the future: here we can look more optimistically at the USA and less so at China, Japan and Germany, whose economies are still closely linked to industry. The time has come for a Country like Italy to gear itself up to fully exploit it’s heritage of art, tradition and culture, which has the potential to attract millions of tourists. One word of warning though; the three Countries mentioned above are investing heavily in research and they are preparing to make the leap. A leap that will not be painless, but nevertheless essential because without research, there will be no future.

An article published on 13 February in "The New York Times" has been hardly noticed in Italy. And yet it is the bell that indicates the end of recreation for the Italian economy. The headline "Wall St. helped to mask debt fueling Europe's crisis" summarises the hypothesis of the three authors: L. Story, L. Thomas, and N. Schwartz. The American banks and above all Goldman Sachs have allowed certain European countries to hide their deficit from the EU. The one with most exposure is Greece, that in 2000 and 2001 had at least two contracts of “swaps” with Goldman Sachs with names drawn from Greek mythology: Ariadne and Aeolus, to get immediate cash in exchange for a deal on future earnings from airport taxes and lotteries. The Greek government classified the contracts as sales and not as (risky) long-term loans. No one knows how many of these contracts have been drawn up and for what value.
Angela Merkel has declared that it would be a scandal if Greece had hidden its debt. According to the agency Bloomberg, there are at least 15 banks that have granted loans in the form of “swaps” in which the risk of the other party is down to Greece. Basically with the “swaps”, the banks provide sums of money in advance according to an event that may or may not happen and (usually) it doesn’t happen. Thus the client then finds they have to repay the loan with hefty interest rates as is happening for many Italian towns that have got into debt in recent years. The “swap” is used to move a debt further into the future but sooner or later it has to be paid. It’s like a credit card. The problem gets more serious when the debt is not declared as such and it suddenly pops up on the States’ balance sheet. The same that happened with the sub-prime for the banks can happen with the swap derivatives for the States.
The banks are always searching for great business opportunities and the States that are about to go under have always been just that. Last November, with Greece in a full crisis, Goldman Sachs went back to Athens to the scene of the crime to put forward the suggestion of using the umpteenth financial instrument to push the Health Service debt into the future. Greece did not accept, or perhaps it was not able to accept.
The article also mentions Italy … “Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.” …. “countries like Italy and Greece entered the monetary union with bigger deficits than the ones permitted under the treaty that created the currency. Rather than raise taxes or reduce spending, however, these governments artificially reduced their deficits with derivatives.” At the end of 2009, Greece’s public debt was 298.5 billion euro. If Greece were to default, it would drag down with it many large banks. However, the Greek economy is only worth 3% of the European GDP. An intervention plan is possible. The true threat to European economic stability is Italy, according to Robert Mundell Nobel prize-winner for economics. Italy has about 1,800 billion euro in debt, six times that of Greece, a quarter of the whole European debt and it could be the target of speculative attacks. How many derivatives has the Treasury contracted to? And with whom? And with what conditions? On the public debt, State secrecy should not operate. Tremorti, if you are there, knock once!

Greece is about to be placed under administration because of its public debt and its ratio of debt to GDP. The level of debt is rising while production is dropping. In essence, Greece will be obliged to surrender part of its economic sovereignty to the EU in order to survive. Today’s newspapers are talking about the European Countries that are in trouble, without mentioning Italy (!?). PIGS, an acronym representing the four Countries at risk, namely P for Portugal, I for Italy, G for Greece and S for Spain has thus become an unpronounceable PGS. Italy has disappeared so it must have become virtuous. Portugal, which is widely believed to be the next Country to follow in Greece’s footsteps, has a public debt to GDP ratio of 76,6%. If only ours were that low! Italy is sitting with a debt to GDP ratio of 115% and 1,800 billion in public debt. The beauty of the economy is that it is so varied and everyone can continue to bullshit until the moment of default. As from today, the Blog has a new host, namely Eugenio Benetazzo, and a new appointment with "Chaos economy".

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The public debt and the PIGS (expand | compress)

A friendly hello to all the readers of the Blog. My name is Eugenio Benetazzo and I am an independent Stock Exchange trader and an economics expert. We are going to attempt to provide a framework that is as exhaustive as possible on the economic and macroeconomic scenario facing our Country. We are all well aware of what has happened during the past 18 months, including the phenomenal interventions implemented by Western Governments, in order to bolster their economies. Now, with the benefit of hindsight, we realise that nothing has changed and the problems that existed 12/18 months ago, particularly the problems of debt, have merely been postponed. The debt has not disappeared, nor has it been covered, but it has simply been converted from banking system debt or debt accumulated by specific groups of companies to public debt, which has thus been placed at the door of the various communities, in other words the various Countries.
If we take a closer look at our Country, we realise that Italy’s public debt, which has now risen to a very serious level of more than 1,800 billion Euro and that, when compared to the Country’s falling GDP in 2009, gives a debt to GDP ratio of more than 120%, we find that this macroeconomic variable is beginning to become a particularly serious concern because if, as usual, we consider what is happening in Europe, such as the downgrading of Greece’s public debt less than one month ago, we begin to see a possible scenario that is anything but comforting. Greece itself is one of the smaller European Countries and the fact that such a relatively small Country can default on its debt is not particularly disturbing in itself. However, this changes if we begin to consider the so-called PIGS, or Countries with a macroeconomic scenario that is very similar to that of Greece. PIGS is an acronym that stands for Portugal, Italy, Greece and Spain, all of which have shown a significant increase in their levels of public debt precisely in order to support their respective economies during the past year

Argentina (expand | compress)

We often hear talk of comparisons with what happened in the past, especially as regards the case of Argentina, which occurred some ten years ago now but is beginning to reveal a number of similarities with our current scenario and holds potentially negative consequences for our Country, as well as for Europe as a whole. When Argentina defaulted on its debt, the Country’s debt to GDP ratio stood at 138%. Ours is currently standing at more than 120%, so we are beginning to get uncomfortably close. In addition to the problem of the Argentinean debt, we must not overlook the concerns linked to the so-called southamericanisation of any given Country.

Southamericanisation is a term used to define the substantial, widespread and progressive impoverishment of the majority of the population while the wealth of a small number of people skyrockets. That is precisely what is happening to us Italians, with a systematic increase in our level of debt and, on the other hand, an absolute plunge in our ability to save.
The most important question we need to ask ourselves, as has emerged from the analysis in the Italian financial press, is how the deficit of some 37 billion Euro will be covered over the next three months. A deficit of 37 billion Euro is not unreasonable considering the reduction in company invoicing in the previous quarters, a drop in company invoicing that has resulted in reduced tax revenues. Tax revenues are therefore insufficient to cover the Country’s current running costs on an ongoing basis. But there is more, and certain independent analysts are beginning to raise the possibility of the Government implementing a mandatory tax levy, as was done by the Amato Government back in 1991 whereby, if any of you can remember, a tax of 6 per thousand was levied on positive bank balances in view. If we add up the amount of money that is currently in the hands of the Italians in the form of financial capital, we find that this is in excess of 2,500 billion Euro, we then calculate that 1% or 2% of that would cover the 40 or 50 billion Euro shortfall. These are not my words but those of recent statements made by the current Government

Imminent future default? (expand | compress)

From a financial perspective, the Country is currently burdened by 82 billion Euro of interest payments (per year, Ed.) and debt repayments, past debt that is made up of two parts, namely 2/3 medium – long term and 1/3 short term debt. If we take a look at who is holding this debt, we find that 50% of it is in the hands of Italians, namely the banks, pension funds, mutual investment funds, etc, while the remaining 50% is in the hands of foreign investors. This would lead one to assume that any form of default would be highly unlikely in the Italian situation because, if anyone were to compare it to the Argentinean situation, the fact is that the latter was a very different case as regards the holders of the public debt, whereby 90% of Argentina’s public debt was held by foreign investors, which enabled the Government to default on payments precisely in order to avert any repercussions within the Country.

The de-industrialisation of Italy (expand | compress)

What we are paying for now, in terms of the reduction in manufacturing activity, is none other than the collateral effects of absolutely criminal business decisions. In Italy, both the right wing and the left wing and including the centre, embraced the choice of progressive de-industrialisation, assisting entrepreneurs and major industrialists to shut down their manufacturing plants in Italy and to set up shop elsewhere, outside of the Country’s borders and even outside of the European Community by enabling the much-vaunted "commercial bridge", which everyone knows about and that creates economic inequality by enriching those that are able to exploit the so-called industrial transformation system and impoverishing those that instead bear the consequences. The has not been a single political force, not to mention political farce, that has come out in defence of the areas where our Country’s real strength lies, namely the “Made in Italy” brand, tourism and the manufacturing hubs for which Italy is renowned worldwide. We have recently witnessed an economic phenomenon whereby other Countries exploit the opportunity to clone or copy products, using vocal similarity to counterfeit certain Italian products to produce similar products outside of the “DOC” or “DOP” areas, for example Asiago cheese produced in the State of Wisconsin or Limonciello liqueur (with an i) manufactured in China. Unfortunately, anyone who truly believes that, anytime soon, we will be in a position to regain the level of competitivity enjoyed by most Italian manufacturers only ten years ago thanks to a favourable exchange rate is very sadly mistaken.
More specifically, we are facing a collapse in the industrial manufacturing sector that will take us back 20 years, meaning jobs that we will never be regained. Those who are thinking about copying the English model, which is based on the services and advanced tertiary sectors, has unfortunately entirely failed to grasp precisely what happened in England, a Country that, more than 20 years ago now, chose to follow the Thatcher route that entailed the selling-off of major State assets, or in other words privatising everything. Now, twenty years on, while England is still rueing those criminal political choices, these people that continuously talk about a recovery while in 2009 our GDP dropped by 6% and the forecasts for 2010 show an expected recovery of + 0.10% or 0.20%, in my opinion this is anything but a recovery and smacks of us being taken for a ride

Thanks to all of you, good luck and see you again soon!

In 2008, the States saved the banks from collapse, the very same banks that had caused the crisis. From that moment a world domino effect started. Since the world financial crisis that lasted a few months, the time needed to inject liquidity into the banks, there’s been the passage to the economic crisis with chain reactions. Closing down of the companies, mass sackings, drop in consumption, collapse in the value of the property market, reduction in the tax revenue. To avoid collapse, the States have used the Public Debt. They have got the citizens into debt without their being aware (in the public imagination, the Public Debt is always someone else’s), first to keep the banks alive, then for current spending. The effect of the increase in the Debt has been the increase in interest rate that the States have to pay to those who bought the newly issued bonds. The interest rates are blocking the development of the country. The more the interest on the Debt, the lower the capacity of the economic policy. The more the Debt rises, the more the cuts to the social State are the only possible solution.
If before the crisis, a State had a high Public Debt, it has had to get into debt beyond the point of no return. The question that everyone is asking is “When do you reach the point of no return?" It’s simple, when no one buys State bonds anymore. In the absence of buyers, the State has to declare itself bankrupt, it goes into default, it doesn’t pay the salaries of public employees and it doesn’t pay out pensions. Another question that has to be asked is: “Which States have the greatest probability of failing?” Once more the answer is simple in this case, the ones that had a big pre-crisis Public Debt and as well as a big increase in it post-crisis, have decreased their capacity to produce. They are producing less (the so-called GDP) and at the same time, they are increasing their Debt. In the EU, there are at least three States with these characteristics: Greece, Italy and Spain.
Greece and Italy have the same strategy in common, to sell their Debt to the States beyond the EU, in as much that the EU is not managing to satisfy the continual offers of “Tremorti” and of George Papandreou. Curiously, “Tremorti” sold our Debt to China last month and given that the Debt is ours and we don’t know the value of the sale. With the Debt, China has bought a part of our national sovereignty, perhaps Termini Imerese or privileged slides for foreign trade. However, even the Great China has its limits, and after digesting “Tremorti” it didn’t buy the 25 billion Euros of Greek bonds that were offered last week by Goldman Sachs.
At Davos, the people talking about the world economy are the same people that caused the biggest bubble of the last 150 years. There’s a question going around: “Which will collapse first, Italy or Greece?” The international investors have already given a technical response. The State Bonds of the countries at risk are covered by an insurance against their collapsing, called “CDS, Credit Default Swap”. Italy is in the top position, way ahead of the second in the table. Greece is only in fifth position. Into the catastrophe with optimism.

Without any doubt, the real person of the year is none other than the Italian public debt. It has grown more than the economy, inflation or the people’s salaries. In October it climbed to more than 1,800 billion Euro and then took a break in November, settling at around 1.783 billion just before the Christmas holidays. It is ready to take off again and surprise everyone in 2010. No one knows what heights it could achieve. Those who have dared to make forecasts have always been beaten by the reality. 2009 will close with a public debt that is forecast to be about 140 billion higher than that at the end of 2008, which ended with a public debt of 1,664 billion. Every Italian is personally liable for 30,000 Euro, a debt accrued on his/her behalf by the Government. Therefore, a family of four has a cumulative liability of 120,000 Euro. Each of us would have to take out a twenty-year loan to repay this debt. In 2009, Tremorti indebted us to the tune of almost one billion Euro more every two days. On what has he spent this monumental amount of money? What we want to know is where has all that money gone? No one knows for certain. As at the end of November, the Treasury’s account balance between income and expenditure stood at less than 74 billion. Expenditure increased by 44.8 billion compared to the same period in 2008. Tax income dropped by 3.4% in a single year while expenditure rose by 11.1%. A crazy economic policy that no family man in his right mind would dream of applying to his family budget. Our public debt is amongst the highest in the world and has to be addressed, but no politician is willing to talk about it. So our debt is growing and our GDP is falling? No problem, our debt becomes part of our GDP. Italy is one of the biggest producers of debt and exports it everywhere. Tremorti placed a not insignificant amount of it on his last trip to China. Any party that holds another party’s debt can control the debtor and, if the debt is large enough, he becomes the debtor’s master. It works the same way when one is talking about Countries, but who is the holder of our debt? Who is our master and is thus able to influence, for example, our foreign policy or economic policy? The final debtor, namely the man in the street, has no answer to this question. The fact is that we simply don’t know. Prior to the coming of the Euro, monetary inflation was the tool used to balance the Country’s books. Purchasing power would decrease and we all became poorer. Now that this tactic is no longer possible, the debt increases to the point of default. That’s because not even a debt as sound as that of Italy can continue to increase indefinitely. However, today our debt is the world’s latest “Made in Italy” product, if you think about it, it’s absolutely fantastic, productivity along the lines of the olden-day Brianza. Italy is producing half a billion Euro a day of export quality public debt. The public debt is the Country’s top industry and can only grow! Heading for catastrophe with optimism.

***
MoVimento 5 Stelle Emilia Romagna – On Saturday 16 January at 12h00 I will be addressing a press conference at the Farnese Chapel at the Bologna Municipality premises in Palazzo D' Accursio, to announce the regional election list; click here.

The first Signature Day for the MoVimento 5 Stelle in Emilia Romagna: On Saturday 16 we will be accepting signatures in Bologna, Modena, Reggio Emilia, Cesena, Piacenza, Guastalla. On Sunday 17 it will once again be the turn of Modena and Cesena. Click here to view venues and times:

http://www.beppegrillo.it/listeciviche/liste/emiliaromagna/calendario.html

MoVimento 5 Stelle Veneto – On Saturday 16 January at 16h00 I will be dropping in to visit the guys of the MoVimento in Piazza delle Erbe in Verona and at 18h30 in Piazza Ferretto in Mestre (VE). At 21h00 I will be addressing a press conference at the Adria Municipal Theatre at No.1, in Piazza Cavour, to announce the regional election list for the Veneto Region.

MoVimento 5 Stelle Piedmont – On Saturday 16 and Sunday 17 January the second Signature Day will be held for the Piedmont Region. Come down and add your signature to the list, free of charge, at the tables in Turin, Ivrea, Chieri, Bussoleno, Asti, Alessandria, Cuneo, Alba, Bra, Mondovì, Fossano, Biella, Cossato, Novara, Vercelli and Omegna. Full details regarding the agenda (remember to take along your identity document). click here.

MoVimento 5 Stelle Lombardy - To find out when and where to sign to support the election list, click here.

The reforms that are “shared”, “wanted by the citizens” and that “are of interest to the country” are not stopping. In fact they are increasing. Together with the reform of the justice system so that you don’t go on trial and you don’t land up in prison, and the reforms of the Constitution so as to do anti-constitutional laws, Berlusconi has a third law ready: the tax one. A reform done for simpletons. In fact they will never do it because it relates to all the tax payers and not the tax dodgers. It’s an election flash. Just two tax rates, one at 23% and one at 33% with a revenue for the taxman reduced by a few billion euro. To be coherent, Tremorti should have a single tax rate of 5%, the one used for the fiscal shield.
When they speak, they are all close to those who pay taxes. Tremorti wants the tax authorities to be the “friend” of the citizens and to be "socio positivo" with the companies. Paolo Bonaiuti explains that “the government has the intention of designing a system that takes Italy into fiscal modernity”. The PDminusL Opposition through the mouthpiece of Bersanetor, the spokesperson of D'Alema, has however been more specific: “That’s a mistaken proposal as it helps the rich”. For one who, as a result of his absence from parliament, has brought about the approval of the fiscal shield, has helped the ultra-rich and avoided the fall of the government , that is a mega-galactic way of taking the citizens for a ride.
If they want a fiscal reform it has to be based on principles of equity. The amount of tax must not be done at source, with every tax payer declaring their income once a year. No difference between work as an employee and as a non-employee. The research studies carried out in each sector has to be abolished. No one can have the knowledge in advance how much a person will earn and pay tax in advance for an income that often is not in fact earned. Finally if someone is caught red-handed in dodging taxes, any citizen must be treated like a complete tax dodger, a mafioso, an arms trafficker, who exports currency abroad, paying just 5% and then enjoying anonymity. In a few weeks, straight after the elections, there‘ll be not a whisper of new rates of tax as there’ll no longer be any need.
Before the summer, Tremorti, always within reach of a helicopter, will explain to us that the accounts of the State are out of control, that every day he has to sell State bonds worth a billion and a half euro, that he has to sell in 2010, to avoid bankruptcy, AT LEAST 480 billion euro’s worth of State bonds like BOTs and BTPs and that in 2010 we will break through the threshold of 2 thousand billion in public debt, that the unbalance between the money coming in to the State and the money going out is due to be made worse for the lack of tax revenue coming in from millions of people who are unemployed and hundreds of thousands of small and medium sized enterprises, that just for the interest on the debts, unless inflation goes up, the State will be paying 80 billion euro. “But (for the moment) Tremorti does not know this.”

The fat brothers are coming back to Italy with the most shameful clanging of the bells and festivities from the media in the last 150 years. They are coming back thanks to the fiscal shield of the PDL-PDminusL mess-up. The fat brothers have got fat abroad by enjoying the services of the State in Italy without paying for them. They are total tax dodgers, civic delinquents. The Italians who have paid taxes for them as well in these years, the manual workers, office workers, public employees, entrepreneurs, are instead the lean brothers. Between the lean brothers and the fat ones there’s a big difference. The lean brothers are honest, the fat ones dishonest. The State is welcoming the fat brother like a prodigal son, with a fanfare from the newspapers and the TV as though a virtuous hero were coming back from the front. If Mangano was a hero, anyone who has kept their own earnings out of sight of the tax authorities deserves a gold medal.
The money of the fat brothers is of unknown origin. It could come from drugs, from trafficking in arms or organs, from corruption. It’s contaminated money. Its filthy owners are also anonymous and they will stay that way thanks to the Fiscal Shield. This riff-raff with an offering of 5% will once more be virgins and they will be able to invest their money without fear of anyone checking up. It’s not the money of manual workers and neither is it of entrepreneurs with a civic feeling, Italians who have paid 50/60% in taxes, often in advance, often on presumed income. And it’s thanks to the taxes of the lean brothers that the country has not yet gone bankrupt.
Now, the people of the honest ones, as opposed to the “people of love” who want to sanctify a State thief like “Bottino Craxi”, has become the “people of the daft”. The people that have paid taxes even for the others. Taxed and done in.
Tremorti is pocketing the alms-giving from the tax dodgers as the Italian banks are pocketing their wealth, at least for now. Money has no passport. Folk like Profumo and Passera who tour round talking about an ethical bank are not raising an eyebrow at the entrance of mafia capital in their institutions. Just one bank has refused the money of the fat brothers and it’s the “Banca Etica”. Il Corriere, owned by the banks and by the enterprises, and led by “Ectoplasma De Bortoli” today has the headline: "Scudo, il grande rientro: 95 miliardi dai paradisi" {Fiscal Shield, the great re-entry: 95 billion from the tax havens}. Italy is the new tax haven, the world’s washing machine, the money-laundering country.
The entrepreneurs that have paid all the taxes will be subject to unfair and ruthless competition from those who have never paid taxes and who can invest new capital. The employees without capital will continue to pay for loans at extortionate rates, if they can get them. How many Deputies, Senators, Ministers, and Undersecretaries have used the Fiscal Shield? If the State does not respond to this question it can consider itself done for. The lean brothers have had enough.

Mathematician and economist Beppe Scienza is giving you a gift for the new year. A piece of advice that will protect the value of the termination benefits belonging to anyone that has not yet transferred the money into one of the pension funds. Spread the word to all workers, to your friends and colleagues; tell them all to keep their termination benefits safe in 2010. When an orange envelope arrives, containing a request for them to move their termination benefits to one of the pension funds, simply refuse to do so. In order to catch a few more unsuspecting people, there will probably be some silent consent clause, so you must respond at all costs. On 6 June 2007, in other words well before the economic crisis hit, this blog posted an article entitled "The termination benefit murmured", containing precisely this advice: "If you work in the private sector and you don’t say anything by the end of June, then your termination benefits will land up in the managed savings funds. Something that should make you tremble with fear, because the mutual funds have been losing money for the past twenty years. Now the pension funds are ready to repeat this disaster. Silent consent is merely a trap. They change the rules of the game without asking anyone anything. It would be like playing the 3-card game with your life’s savings. They are lying when they say that they are building up a supplementary pension. All they’re doing is giving your termination benefits to the managed fund industry to play with.". Those that subsequently kept their termination benefits within the company definitely scored while those that invested their benefits lost a bundle!

Interview with Beppe Scienza:

"The latest news regarding termination benefits has caused major consternation, even though the situation is not as bad as it sounds. The novelty is that the 2010 Budget Bill will be making use of those funds that the companies have paid over to the INPS (the National Pension Fund) rather than retaining them in-house on behalf of their workers, but this is not the worst thing that could happen in that it doesn’t really affect the workers themselves. However, there are other issues that are and will continue to affect or potentially affect the workers’ situation.
The bipartisan termination benefit reform initially decided upon by Maroni and then by Tremonti together with the Berlusconi government and was then brought forward by one year by the Prodi government was one of the most treacherous blows ever aimed at the Italian workers in recent decades.
The real deceit, the true swindle and the real lie that is being spread by a number of the regime’s economists is something totally different and is the basis of the argument being used to convince everyone to opt for the supplementary pension. It goes something like this: Future pensions will probably be low, and therefore inadequate so, in order to supplement the pension income, your termination benefits must be transferred to the pension funds. This is an out and out lie, and a good one at that! It may well be that the pensions payments will be low, although it is very difficult to forecasts what pensions will be like 40 years from now. Even predicting what salaries or even prices will be like in 40 years’ time is practically impossible. However, even if it were true that they will be too low, it is still a lie that you must transfer your termination benefits to any pension fund or insurance-based fund in order to ensure a future supplementary pension. No, you should hold on to your termination benefits and when you reach retirement age, if you wish, you can then invest the funds in a supplementary pension of some sort. At that stage, if the sum you receive is higher than that paid out to the poor devil who chose to transfer his termination benefits to a pension fund now, then your supplementary pension will be greater than his.
There are some specialists in the ignoble art of pulling the wool over the Italian workers’ eyes by telling them certain things that are downright ridiculous. They use a concrete example, someone by the name of Marco Lo Conte, a journalist for “Il Sole 24 Ore”, the daily rag of Confindustria, who tells the people the following, and I quote from page 4 of the Plus24 supplement dated 24 October 2009: “for anyone who doesn't transfer their benefits to the pension funds, the only certainty is a caravan, in other words, the certainty that, when they are old, they will be obliged to live in a caravan without even enough money to buy cat food”, which is allegedly the fate that awaits 18 million of the 23 million Italian employees. Well, to say that anyone who doesn’t agree to transfer his/her benefits to a supplementary pension fund is guaranteed to land up living in a caravan only shows that there is no sense of the ridiculous at the “Il Sole 24 Ore” newspaper.
It would appear that, in 2010, all employees will be receiving an orange form with their pay packets, although the colour of the form is really irrelevant, presumably indicating what their future pension will be. The aim of this orange form is clearly to frighten the workers, but to convince them or drive them to do what, precisely? To invest their benefits in the pension funds or other insurance-based funds. Now this is something that no prudent person should even dream of doing.
Handing your money over to the pension funds involves taking two risks that don’t exist where the benefits are at the moment. The first risk, which we saw very clearly in 2008, is that a collapse in the financial markets would cause a drop in the value of one’s savings. We’re not talking bankruptcy here, because neither pension funds nor mutual funds go bankrupt, however, they can lose up to 90% of their value without being declared bankrupt. The other risk is that inflation once again begins to climb.
What is certain, however, is that in the case of either of these risks, namely either a collapse in the financial markets or rising inflation, or both, which could occur simultaneously because sometimes bad news comes in pairs, those who keep their termination benefits have peace of mind, since the value of the termination benefits does not depend on the financial markets and, should inflation start climbing, the value of the benefits will hold up excellently.
Now Minister Sacconi comes along and reiterates what he has said numerous times before, namely that: “we are about to start another period of silent consent”, in other words, another six months after which, even if a person decides against it, his/her money will automatically be transferred to the pension funds.
The termination benefit scheme works well for the workers, or rather, it works fairly well for the workers and it also works fairly well for the companies, however, it does not increase the bankers’ bottom line because the workers get their money directly from the companies, without any bank in-between to skim off any profits, without making any profits for the insurers, who have nothing at all to do with the process, the fund managers make no profit because they are in fact not managing anything, it also makes no profit for the trade unions because none of their employees are involved, whereas they have people sitting on the boards of the managed funds, nor does it make any profit for the officials of Confindustria or the other employer organisations, who instead sit on the pension fund boards. The termination benefit system also does not make any profits for the university lecturers, nor for the economists, because it runs on its own and the economists are unable to provide their consultancy services or sit on the management boards of the pension funds, in other words, there is no way for them to make money from the system. Therefore, the termination benefits system is something that only works for the workers and the companies, but doesn’t make any money for the others and that is why they have tried to destroy it. Fortunately they have not yet succeeded!" Beppe Scienza

Tremorti has declared war on Switzerland with the Tax Shield. This is a war between Euro traffickers. They are fighting over the tax evaders’ money. It is estimated that some 600 billion Euro that originated in Italy and was not declared to the tax authorities is now sitting in the Swiss banks. 200 billion of this is in Lusanne alone, in the Ticino Canton. To all intents and purposes, Lusanne has essentially become the homeland of the Italian tax evaders. Tremorti’s mission is to dry up Switzerland in order to balance Italy’s books, so he sent the financial police into 76 branches of Swiss banks that operate in our Country. Since September, members of the Italian financial police dressed in civilian clothes have been checking the motorcars crossing the Italian-Swiss border and beyond. Indeed, there are Swiss citizens that are now on the hunt for any tax investigators sent out “in absolute secrecy” by the authorities in Rome.
The Italian ambassador in Bern was summoned by the Swiss authorities to provide an explanation and the Swiss Minister of Internal Affairs, Pascal Couchepin, has labelled the Italians’ behaviour as a "raid" on Swiss banks.
If all the tax evaders’ funds, estimated to constitute two thirds of the capitalisation of Lusanne, were to return to Italy, the Ticino Canton would risk going bankrupt. It is like a battle to win the public thief award, the most disgusting one of all. Indeed, it can’t be anything else, when you have a tax evader who doesn’t pay tax in his own Country and exports millions of Euro to Switzerland, where the money will be safe thanks to banking confidentiality. Money that has been denied to the community, to the weakest members of society, to the schools and to the hospitals. Hoodlums that have kept their money in the shadow of chocolate and that may now bring it back into this Country on a red carpet of anonymity, of pardon, and paying a levy of only 5%. It’s a case of thieves acting against other thieves. Who will eventually win this battle, Italy or Switzerland?
Whose bloody money is this anyway? Are there any politicians involved? Are they perhaps amongst those who voted in favour of the Tax Shield or abstained from voting?
Even the Swiss are getting pissed off in their own small way. A former bank manager has stated that if he were to speak out, "The Italian Government would collapse overnight".
So speak out my little Swiss chocolate, please do us all a favour and speak out!

Rome, 11 January 2010

Finance Letter
”The unexpected increase (*) of the public debt at the end of 2009 together with the partial reduction in the purchase of State bonds, and especially by financial institutions, that was recorded in the months of November and December last year, now means that the Ministry of the Treasury cannot supply the cash for the current cash commitments. The immediate consequence of the unbalancing of the State accounts will be the block on financing in January 2010, even though already approved and ongoing, of public works, evaluated by a special Inter-ministerial Committee as to whether they can be deferred in the coming 16 to 18 months. The Minister of the Economy, Renato Brunetta who has taken over from Giulio Tremonti, at the forthcoming Council of Ministers, will propose some mandatory measures to prevent the bankruptcy of the State and the consequent abandonment of the Euro. Among these, the most important is the freezing of 30% of the pensions and salaries of public employees, the 30% cut will be compensated by the assignment of an equivalent amount of 5-year State Bonds. The interest on the State Bonds, estimated to be between 0.5% and 0.8% will be calculated every three months. The Bonds will be bought back when they fall due. The re-entry of capital from abroad that took place in 2009 thanks to the Fiscal Shield was not sufficient to allow for a greater purchase of public bonds by the banks, as had been forecast. The tax rate on the returning capital brought only 4 billion euro to State coffers, clearly insufficient for any type of turnaround in the debt situation. From government sources, it seems clear that not only the President of the Republic, Giorgio Napolitano but also all the groupings in Opposition, are in agreement on the urgent approval of the measures to freeze public salaries and pensions. In fact, the alternative could only be the reduction in the number of public employees by hundreds of thousands with immediate effect. To avoid disturbances, the security forces have been placed on alert in the whole peninsular. Even though the credit system is not in a risky situation at the moment, for the next two months, as a precautionary measure, it will be possible to withdraw a monthly amount of no more than 5,000 Euro from one’s own current account. The hypothesis of a “technical government”, led by the Governor of the Bank of Italy, Mario Draghi, to reassure international markets after two years of disarray in the State accounts, is being examined by the President of the Republic.”

(*) The public debt is almost 1,800 billion Euro.

From January to June 2009, 36,000 shops have closed down. That’s 6,000 A MONTH. 200 a day. By the end of the year, the Confesercenti estimate there’ll be SEVENTY THOUSAND FEWER. Above all, the ones run by families. The big chains are hanging on. A prudent estimate, even taking account of the opening of new shops, is at least 200 thousand people without work this year. Shops are closing for the crisis, for the lack of optimism among the consumers, for the competition with the supermarkets and for taxes. It’s difficult to intervene on the first three points, however on the last point it’s possible. The shopkeepers need to insist on fiscal equality in front of the law. If the great tax dodgers pay 5% for the fiscal shield, then even retail sales should have a top tax rate of 5%. Otherwise, as Mavalà Ghedini says “the law is equal for everyone, but the application is different”. Butchers, stationers, greengrocers, grocers, delicatessens and bakers bring your taxes for the shops into line with the taxes for mafia capital. Follow the advice of a friend of mine from Reggio Emilia:
”You have talked about a tax strike. OK, listen to this. A friend was talking to me about it just an hour ago. His wife is a shopkeeper in Parma and she’s furious about the fiscal shield. A lady-made-senile-by-TV came into the shop and started reciting her script: “But have you seen the Annozero scandal? They’ll have to close down that programme, communists, assassins, poor Silvio … bla,bla"... She listened and said nothing until after the client had paid and then she said: “Signora, today I have decided. I’m not going to give you the receipt given that 300 billion euro of tax dodging, Berlusconi has amnestied. Thus now I too am going to do that. What do you say?” The customer-made-senile-by-TV was stunned – she was disoriented. She didn’t know what to say. … and she went out with her tail between her legs saying: “Oh, yes, perhaps you are right…”.
And if we were to organize a protest like this? SHOPKEEPERS who join up and display a sign like this:
”TODAY I AM NOT GIVING A RECEIPT. PROTEST AGAINST THE FISCAL SHIELD THAT AMNESTIES 300 BILLION EURO OF TAX DODGING”

PS This morning, 7 October, Radio24 interviewed Sonia Alfano and David Borrelli. Listen to the audio of the broadcast and take part in the survey.

PPS The competition called “Where were you 32 unfaithful employees?”, is continuing. It aims to find out where the opposition deputies were at the moment of the confidence vote. Participate in great numbers. The blog will keep track of your indications and it will publish them in the days to come, together with your real name or your nickname. Here’s the list: 24 PDminusL: Argentin, Binetti, Bucchino, Capodicasa, Carra, Codurelli, D'Antoni, Esposito, Farina, Fioroni, Gaione, Ginefra, Giovanelli, Grassi, La Forgia, Lanzillotta, Madia, Mastromauro, Melandri, Misiani, Pistelli, Pompili, Porta, Portas. 7 UDC: Bosi, Ciccanti, Drago, Libè, Pisacane, Ruggeri, Volontè. 1 IDV: Misiti.

The fiscal shield has had many fathers. Parties, banks, Confindustria, Trades unions, the President of the Republic, organised crime. Not one of them has raised his or her voice, not Ms Marcegaglia of the incinerators, not Luca Cordero di Montezemolo, not the “Triplice”, not the Italian Banking Association (ABI) not Morpheus. And we couldn’t expect the mafias to do that in their stead.
300 billion euro not declared to the tax authorities will come back into Italy. With a tax of 5%, it will be recycled in the Italian economy with the guarantee of anonymity. When it crosses the border, it will be the banks welcoming it. The bankers of the ethics of finance, including Passera and Profumo, will accept the mafia capital, from abroad to abroad, subtracted from taxes, the fruit of bankruptcy in their deposits. They refused the Tremorti bonds, but they will gladly accept the Mafia bonds.
Who realistically can have the availability of tens or hundreds of millions of Euro abroad unless it is the medium and big industrialists? Now, to finance their companies, in a moment of crisis, they need to get “clean” capital back into the country. For them, the fiscal shield is like manna from Heaven. The property owners who have run out of credit and yet have the cement flowing, need oxygen for their devastating activity on the territory. And they will have that, thanks to the Fiscal Shield. The silence of the Trades Unions is explained only with the hope of work, work, work. It doesn’t matter whether it’s from tax dodger’s capital or to do useless or damaging stuff. All with their hands in the custard pie, apart from the citizens who are obstinate enough to pay their taxes against their own interests. The returning capital will favour unfair competition, will make the honest companies go under, and in particular the small and medium enterprises that pay taxes, even the “presumed” taxes, even a year in advance. The amnestied tax dodger who pays 5%, can reinvest, push down prices, buy up companies. Anyone who pays 60% discount for cash, can just try to survive.
Finally, there’s a great feeling of discomfort for those who stubbornly cultivate the pleasure of honesty and perhaps, they can no longer allow themselves to do so. You need to have great strength of character to pay taxes. To see tax dodgers rewarded. The crafty ones with the 4x4 and the boat and your company collapsed or you sacked. To pay the bills that are ever more numerous and dearer. The last will be the first, perhaps. But the honest ones in Italy are certainly the last. The stupid ones, the idiots. The ones who have been robbed even of the pride of doing their duty.

PS The competition called “Where were you 32 unfaithful employees?”, is continuing. It aims to find out where the opposition deputies were at the moment of the confidence vote. Participate in great numbers. The blog will keep track of your indications and it will publish them in the days to come, together with your real name or your nickname. Here’s the list: 24 PDminusL: Argentin, Binetti, Bucchino, Capodicasa, Carra, Codurelli, D'Antoni, Esposito, Farina, Fioroni, Gaione, Ginefra, Giovanelli, Grassi, La Forgia, Lanzillotta, Madia, Mastromauro, Melandri, Misiani, Pistelli, Pompili, Porta, Portas. 7 UDC: Bosi, Ciccanti, Drago, Libè, Pisacane, Ruggeri, Volontè. 1 IDV: Misiti.

300 BILLION EURO will return to Italy protected by Tremorti ‘s fiscal shield. The State will gain 5% for the amnesty. Money that nothing is known about, in all probability never taxed. To whom does this capital belong? Do you know any labourer, any office worker, electrician, mechanic, hairdresser with tens of millions in a tax haven? Basically, do you know any WORKER who will get an advantage from Tremorti’s shield? Anyone who pays taxes at 15/27/35/50% has the right to know the full names of those who export capital and the origins of the loot. We want the list published in the newspapers by law, anything but the impunity and the anonymity.
Tremorti has stated: “I don’t believe that the criminal world will make use of this provision. Criminal capital is either in Italy and perfectly well “laundered” or they will continue their activity abroad”. “I DON’T BELIEVE”? A Minister of the Economy who does not believe that out of the 300 billion there is mafia capital, from bankrupts, from complete tax dodgers, the product of money laundering, of dirty money? But who does who think he is bullshitting? This State amnesty is, until proved otherwise, an amnesty for the mafia.
” Franceschini Boccon del Prete” said earlier in Parliament that the fiscal shield is: “a slap in the face for all Italians who honestly pay their taxes”. From the words to the actions. The so-called Opposition, acting on the suggestion of Italia dei Valori, asked for the vote in the Lower House on the unconstitutionality of the fiscal shield. If the 280 Deputies of the PD, IDV and UDC had been present ,the Fiscal Shield would have been blocked. But they were in the bar, the restaurant, perhaps at Arcore, to publish a book with Mondadori or getting interviewed in the early evening on “Canale 5”. Perhaps out whoring with Tar Head. Perhaps on an outing with Tarantini. Anywhere but not in the House. 59 Deputies of the PDminusL were not there, together with 8 from the UDC and 2 from IDV. Of the PDminusL, the two champions of the Primaries, Franceschini and Bersani, were absent, together with D'Alema, the psycho-dwarf’s best friend. This is the “really harsh Opposition”. With these characters, mates and accomplices, the psycho-dwarf will last even after his embalming. It’s the Opposition that makes the government filthy. They will never give up (but is it in their interests?). Neither will we.

To have or not to have. We are working longer than the workers did at the time of the Pharaohs. For thirty years, forty years or even fifty years. The pensionable age is moving ever further away, to the point where soon it will coincide with the date of our death. Earning a salary is increasingly becoming the sole objective of work. It is no longer important for work to be useful or to have some sort of meaning for society or for the person doing it. The purpose of a business is usually to show a profit. Money that is useful in order to buy useless goods, produced by people who equally perform useless jobs. In order to make useless goods useful and increase the salivation level of the consumers, we invented the advertising industry. A massive deception, a kind of self-hypnosis for profit.
We have lost all sense of reason and communal purpose. We are like a load of laundry that has been washed and re-washed in a washing machine whose programme has gone haywire. Information and advertising, which at one time were two separate things, have now become one, merged into an obscene entity that is everywhere and justifies everything. The destruction of the planet, the elimination of time (no one has time for anything these days...), the loss of all meaning, the total lack of any values other than financial one. We have lengthened our life span only to find that we can no longer afford to live so long, because we are too busy producing. Having, having has become our drug of choice and we work in order to have. We have transformed our world and ourselves into a GDP, into perishable goods. We have everything, yet we no longer have anything.
In a society that is based on production for its own sake and at all costs, anyone that loses his/her job becomes nothing more than a dead weight. He/she is out of the game. In order to survive, one must have a job, any job will do. Work is progress, work is the future. Progress, instead, should mean a reduction in the amount of work. The elimination of unnecessary work. Work for everyone, but only if the work is useful and in a reasonable quantity.
The damnation of work is the “other” side, a mirror image, namely the social parasites. Those people that don’t work, thanks to the useless work of other people. They are merely devourers of human and environmental resources. They don’t have a job as such, but they manipulate and own the capital, often huge amounts of capital. They are the ones in control of the wheel within which the often unwitting workers turn. Social inequality is what makes useless work become essential. Social solidarity and the equitable distribution of resources would spell the end for production for production’s sake, as well as for the financial parasites. What sense is there for any Country, such as Italy for example, to have millions of people living below the breadline and millions more unemployed, while hundreds of thousands of other people are inordinately wealthy? What does it mean to “live” in the same Country for the tax evaders and for the temporary workers? Poverty is the raw material for consensus for all regimes. A wealth threshold and a poverty threshold must be established, neither of which may be exceeded. To have or not to have.

The revolution is done with shopping. That’s what the priests say. But less, but “just”. Don’t waste. If you do that you will feel better. For example, you can use less detergent, drink fresh milk from the distributor, eat non-imported seasonal food. You will save at least 16%. The rules followed by the families in don Gianni Fazzini’s community of 1200 families are pure common sense and as well as producing a saving, they save time as well. They are families who are doing politics with their shopping and every month they are publishing their family budget. In the future, in the secret of the confessional, anyone who is polluting, wasting, is destroying by what they are buying, will receive absolution only if they sign up to don Gianni Fazzini’s “Bilanci di giustizia” {weighing up justice}. O Lord! Give us this day our daily (just) shopping!

”I am don Gianni Fazzini. I am a priest from Venice and for a few years I have been following Beppe Grillo. Today I would like to use the blog to tell you some good news. In Italy, there are 1200 families who for some time now, have been rethinking how they are doing their spending. And they are freeing their own heads from advertising and from special offers and they are asking what is really necessary for them and what is right that they buy.
These families are connected into a network. It’s called “Bilanci di giustizia”. They are very picky. Every month they send us their family budget and they tell us what spending they were able to do by thinking about it.
Just recently, we have finally analysed all their monthly records and we can give you some figures that I feel are very interesting. These families have been able to change the way they consume and to do this with accuracy and awareness, by 31%. That’s 31% of all their spending. And by doing this they have achieved two results that I feel are very important. One is that – they say they have improved the quality of their lives. We went to Germany and we got some help from the Wuppertal Institute. There, they told us that in order to measure the quality of life, the safest way is this: find out how much time a person has to do the things that they feel are the most important. And so we have used this indicator to find out. OK, on a scale of one to seven, the majority of the families found that they were landing up between five and six. We also asked them about their own views on their quality of life. Here too they ended up between five and six.
If we think about what we buy. If we are questioning whether by buying a certain thing we are voting for the one who is working in a correct way, looking after the environment and paying those who work in a just way, then we too are better off.
By putting this mechanism into action, these families have saved 16% on the same statistical social class of the average Italian.
All this makes us say that a step to gain freedom and for a true political action, can really start from our day-to-day spending.
These families will all come together on 27 to 31 August in Oropa in the province of Biella. They have given the event an interesting title: “Taste the beauty and construct the hope”. You can go onto the site www.bilancidigiustizia.it. They you will find all the information and of course you will find the figures that I have given you but in more detail and selected.
Thank you. If you too try doing your shopping with thoughtfulness, you’ll see that you’ll feel better. “

There are normally only two kinds of people interested in a peach. Those that grow the fruit and those that eat it. The farmer receives 10 cents per kilogram for his fruit but it costs him about 45 cents to produce. The consumer pays two Euro for the same kilogram of peaches. This raises an interesting question, namely, who is it that has stolen our peaches and is driving our agriculture industry into the ground? Here is a long, desperate letter from a farmer from the Emilia Romagna region.

"Dear Beppe,
My name is Samuele Bertuzzi, I am 27 years old and I live in a small village near Imola. I am writing to you to explain what is happening in the world that I work in, a world that my family, my father and my grandparents always believed in, namely agriculture, the fruits of the land. I live in Romagna, where there are a number of major farming companies producing fruit such as apricots, peaches, nectarines, kiwis and grapes for making wine. The fruit growing industry in Italy is currently going through a very rough patch. The growers are being paid ridiculous prices for their fruit, around 8-10 cents per Kg (Source: Bologna Chamber of Commerce) for top grade peaches and nectarines, as against an average production cost of around 40/45 cents per Kg. This notwithstanding, the fruit is being sold in the shops at around two Euro per Kg or more. It is possible to find lower prices, but this is only during special promotions on lower grade fruit and then only for a few days at a time. 70% of our fruit is sold abroad (mainly Germany but also England, Austria, Switzerland, Belgium and Eastern Europe) where the prices being charged are just as incredible. A friend of mine who lives in London tells me that in one of the Tesco stores four peaches are being sold for 1 Pound (four peaches weigh about 500g, therefore, the cost is two Pounds per Kg or equivalent to 2.32€/Kg). At the end of the day, the effect of the production cost on the final selling price to the consumer is ridiculous: imagine, 10 cents as against a selling price of 2€ is equivalent to only 5%! The packaging and distribution of the peaches alone costs more than that! It is absolutely unbelievable that no one says anything about this! When they have to announce a price increase, the first thing that they show on TV are the beautiful market stalls laden with fruit and vegetables because this makes a good impression, but no one says anything about what goes on behind the scenes.
I want to explain to you very briefly how the fruit production “supply chain” works. The main player is the grower, the party that produces the goods, the fruit or the vegetables in question. What we’re talking about here is fruit, because that’s what I know the most about. The grower produces the fruit, which takes him a year to do, and then he harvests his crop over a three-month period (from June through to the end of August in the Romagna region). A lot of work goes into producing the crop, including pruning, soil treatment, fertilising, pest control, etc, with the grower having to fund the process up-front. The grower is essentially a businessman who owns a piece of land and has to make certain business decisions, just like any other businessman. Once the fruit has been harvested, it is time for it to be sold on to people for whom the fruit is the raw material for their business. This is normally a fruit and vegetable warehouse (either a privately owned company or a co-operative) who then stores, refrigerates, processes, packages and sells the end product.
The system that has been created over the past 20 years means that when the grower sells his produce to the warehouse, there is no real sale as such, one involving any negotiation on the pricing, but simply a handover. The grower delivers his products to the warehouse at a price that will only be set at the end of the season once the warehouse knows precisely what he has received from product sales, less his expenses. In other words, the grower receives a set price. He can’t set the price and he sells his product at a price that is only determined at the end of the season.
Continuing along the supply chain, the warehouse processes the fruit, packages it and sells it on to the importer. For negotiation purposes, the importer often utilises the services of a intermediary agency, a party that receives its orders from the importer and sources the product from the Italian warehouses. These are people that ONLY shuffle papers. They don’t even see the fruit that they are sourcing because it goes directly from the Italian warehouse to the loading platform. In many cases even the importer is little more than yet another agent between the foreign distributor and the Italian agency! The fruit arrives at the loading platform where it is checked, re-processed if necessary and then delivered to the sales outlets. Here too there are often other intermediaries that do nothing other than shuffle papers. At the end of the supply chain, the parties that set the price are the final sellers of the product: in the vast majority of cases these are the members of the Wholesale Distribution Network (the Department Stores) which in Italy include chains such as Coop, Esselunga, Auchan, Conad; in Germany, Lidl, Metro, Edeka, Aldi and Tengelmann; in England, Tesco and Sainsbury. The Department Stores establishes the price, which then cascades back down the supply chain, with each party in the chain getting their share of the income to cover their costs, but in the opposite direction taken by the product in the first place and without any TRANSPARENCY whatsoever. The last two parties are the packaging warehouse and the farm, which should actually be the main role players since they are the original producers! The warehouse receives an average price of 0.60€ for peaches and nectarines, from which they deduct their costs and WHATEVER IS LEFT OVER IS PAID OUT TO THE GROWERS!
The farmers are in a position where they know what it will cost them to produce the goods, but not how much they will receive. Above all, they will receive a price that is SET BY SOMEONE ELSE and one that doesn’t even cover 20% of their production costs. This doesn’t even take into account the fact that the farmer is the one that carries all the risks posed by weather conditions, such as hailstorms, excessive rain, flooding of fields and wind damage. On top of it all, at the time of harvest, the farmer cannot afford to leave the fruit on the trees since he has already incurred 80% of the production costs. I conclude by saying that not even the non-profit and welfare associations are interested in taking the fruit, even though there are entire populations without any food!
Beppe, I ask you please to give us some exposure on your Blog because no one else is willing to say anything about this problem. No articles in any newspapers, no television reports, no radio programmes, no one says anything because agriculture does not qualify as news and, in Italy, AGRICULTURE MEANS NOTHING, even though our industry represents 15% of the Country’s GDP! Thousands of farming enterprises are in difficulty (perhaps the ones that are feeling the effects of the crisis more than any others), people, families that believe in what they are doing, in the fruits of the land, that are “dying”, abandoned by everyone. Not even the politicians are raising a finger to help. All they can talk about are the banks and CONFINDUSTRIA, but as far as they are concerned the farming enterprises don’t even exist, while the local politicians, lost in their bureaucratic quibbles, do absolutely nothing for us. Dear Beppe, we are dying, this kind of agriculture is busy dying out and the fields will soon become like stretches of desert, unkempt land, abandoned, replaced by parking areas and hypermarkets selling fruit that has travelled thousands of kilometres and produced more CO2, products that are polluted, poor quality and produced at low cost, often via the exploitation of manpower that will only make certain people rich. All that will be left for the farmers that have left the land is to go and pack fruit and vegetables on supermarket shelves or direct the traffic in the parking areas that now cover their former fields!
Dear Beppe, I am pleading with you to dedicate some space on your Blog to our industry that is in serious difficulty and forgotten by everyone, so that we don’t also simply give up! Regards." Samuele Bertuzzi

The strategy for coming out of the crisis keeps coming back to the same thing, namely construction, construction, and more construction. The construction of another 100,000 new apartments in an Italy that has already been destroyed by concrete is an act of economic dementia, even more so than environmental dementia. Who stands to benefit from all this construction of buildings in a Country that is busy relegating its green areas to the Apennines and the Alps? There are houses standing empty everywhere. Take a walk through any big city and you will see that right alongside these new residential blocks that are devastating the city centres and the suburbs, there are entire buildings of offices and apartments available for sale or for rent. Why is it necessary to build more and more? Italy is full of second, third and fourth homes located in (previously) marvellous areas. Homes that stand empty, with shutters closed, perhaps rented out for one month per year, if that. Construction everywhere, on the sand dunes of Sardinia and on the meadows of mountain villages. What is the REAL economic value of these homes?
The environmental cost of constructing a house that is destined to remain empty is huge. To build when there is no real need for accommodation but purely for reasons of potential speculation is a crime. Italian land belongs to the Italians, not to the property development companies or the banks that finance them with our money, nor to any government lobby group. If any of these parties profit from the land, then the minority shareholders of small building companies listed on the stock exchange, such as "Risanamento" for example, lose everything. “Risanamento” is a spectacular name because its share price plummeted by 43,18% in 2009 and the two previous years, from 3.60 Euro down to 0.11. The shares are worth 34 times less than their peak value back in 2007. A name that sounds like something suggested by Tremorti.
Risanamento is a large Group that enjoyed the support of the politicians and the banks that granted it loans upon loans. The money came from the banks’ customers. The very same banks that reject applications for small overdraft facilities and loans from small companies while granting lines of credit to a company with THREE billion Euro of debt and is heading for bankruptcy. What banks, you ask? Unicredit, MPS, IntesaSanPaolo, Banco Popolare..
The founder of “Risanamento” is a man called Luigi Zunino. An individual that is much loved by the politicians and that is involved in various areas deemed to be essential for the EXPO 2015. He is responsible for the failure of the residential area of Santa Giulia and the "rehabilitation" of the former Falck premises in Sesto San Giovanni. “Risanamento’s” last operating profit dates back to 2005. In Europe, property development companies have an average debt that is equivalent to 50-65% of their assets. In 2008, “Risanamento’s” debt amounted to 85% of its assets.
In order to avoid losing any of the previously granted loans, for which the senior executives should be fired, the banks are about to grant “Risanamento” another 250 million Euro of loans. And so millions and billions of Euro of our savings go up in smoke. All on the great real-estate bonfire. Where has Consob been hiding in the past few years? Were they even aware of this listed company called “Risanamento”? Mr. Cardia, yes I’m talking to you! The real estate bubble will also burst in Italy, it’s only a matter of time so fasten your seatbelts.

One of the Republic's Ministers, Minister Lunardi, once said that we have to learn to live with the Mafia. But in order to live with something you first have to establish exactly what it is. What is today’s Mafia all about? How many parliamentarians, mayors and town councillors do they have in their pockets? The various Mafia groups arrange to have their own people democratically elected to Parliament. They are sitting on the Board of Directors of the banks, the major industrial companies and the real estate firms. Wherever there is an opportunity for laundering hundreds of billions of Euro, they are there. In a single year, the Italian Mafia groups generate a combined turnover of 130 billion Euro (2003 estimate). 70% of this figure is straight profit and they are in a position to re-invest almost 100 billion Euro per year. They can buy whatever and whomever they wish. The life and death of a man. Convert their money into outwardly respectable business enterprises. The Italian Mafia’s GDP is greater than that of many of the medium size Countries around the world. It is greater than that of Croatia or Rumania. The Mafia is one of the largest and most secure employers in Southern Italy (they always pay). Thanks directly or indirectly to the Mafia, some 27% of the residents of Calabria, 12% of the residents of Campania and 10% of the residents of Sicily (*) manage to make a living. When you have no other option, the one that provides your daily bread automatically becomes your boss. The Mafia is not only the most important business, but also the largest employer in the South of Italy. The turnover generated by the Mafia groups must be added to the turnover generated by their investments via their money laundering activities. In the past decade, the Mafia’s total profits have been in the region of 1,000 billion Euro. What kind of yield does 1,000 billion Euro of laundered money provide in political terms, financial terms and in terms of Government influence? What we need to find out is whether or not there is any longer any distinction whatsoever between the Mafia and the Sate and between the “clean” economy and the Mafia economy. To establish whether there is still such a thing as a “clean” economy and whether or not a Country’s economy is still able to survive without the influx of Mafia capital. Whether it is the State that has to live with the Mafia or the Mafia that must live with the State. Whether the State has become a Mafia entity, whether the Mafia groups have become parastatal and protectors of the system that has been set up. The truncheon hailed as a hero on a par with Borsellino in the Panthoen of the Homeland. Andreotti, convicted criminal and senator for life for Mafia association and Government activities. Money is completely undemocratic. Those who have it control the capitalist democracies and now the Mafia groups have the money. We have to ask ourselves whether there is anything left that can still be classified as non-Mafia and whether living with the Mafia has become a process of slow integration that dilutes and eventually swallows up absolutely everything and everyone.

(*) Data drawn from the book entitled "Mafia Pulita" (The Clean Mafia), published by Longanesi

Ps: the buoys are red. I repeat: the buoys are red.

Sounding surprised, the newspapers report that 2008 was a black year for pension funds, which lost almost a quarter of their value. I experienced a kind of déjà-vu and decided to ask Beppe Scienza to explain to this Blog precisely what happened.

"Dear Beppe,
Sooner or later, the chickens always come home to roost. As a matter of fact, it is now official that in 2008, the stock market-based pension funds watched as 24,5% of the money entrusted to them went up in smoke, an additional loss to those of 2007. Even generally speaking, the voluntary retirement provisions fared worse than did the company held Severance Payment Provisions (TFR).

So you can take pride in the fact that you gave the Italians some good advice when they were about to make that crucial choice. As a matter of fact, just two years ago, when I introduced my book entitled “La pensione tradita” (Betrayed Pensions), you told the people outright that they should rather leave their severance money in the company provisions.
Those that took your advice are now as happy as larks. They have not lost a single Euro and their benefits increase day by day. In fact, the TFR is the peak of security.
Those who were arguing against the TFR at the time were an incestuous bunch: government and opposition politicians, trade unions and employer associations, bankers’ allies, insurers and fund managers. They were backed by a bunch of economists, most of whom had some sort of conflicts of interest: Marcello Messori, Riccardo Cesari, Elsa Fornero, etc.
The financial journalists were quick to obey the orders they received, reiterating like parrots that people should hurry up and move their benefit provisions to the voluntary pension funds. I only remember two people who in all honesty defended the TFR, and thus the interests of the workers: Giuseppe Altamore of “Famiglia Cristiana” and Oscar Giannino of “Libero Mercato”.
But there is yet more bad news: one of the historical objectives of the trades union has always been to ensure “equal pay for equal work”. Well, the trade union federations suddenly agreed to accept a lower rate of pay for those workers who chose to keep their TFR. They refused to play ball and so they had to be punished by losing the so-called employer’s contribution, which is a double-edged sword in any event.
But the battle has not yet been won, because there are a number of waiting traps at every step. To find out more about these, feel free to visit my website at the Turin University’s Mathematics Department.
The banks, the Post Office itself and the financial consultants continue to sell the people life insurance policies, open pension funds and individual pension plans (pips). These are all further ways to lose money, even for those who kept their TFR.
As a matter of fact, the only way to ensure financial security for your old age is to stick to one simple rule. Saving money, definitely, but avoiding any kind of pension product. Furthermore, don’t reconsider leaving your severance benefits in the TFR. The advice given two years ago is still valid to this very day.
Until next time … and we hope that things will get better" Beppe Scienza

The crisis no longer exists and if it existed it wasn’t a true crisis. Just a tiny crisis. All thanks to our government, to Italian banks, to “Noemi boy” and to minister Tremorti.
The unemployed, those laid off, the business people who have closed up shop, the creditors that are no longer getting their invoices paid not even 240 days late, are Italians who are mistaken. Who are not sufficiently committed. They are folk, perhaps scum, who form a part of the tens of thousands of precarious workers in the private sector who have been allowed to stay at home. Or of the 60,000 precarious workers in the public administration who will be sacked starting from 01 July 2009, and the up to 120 thousand in 2010 and the more than 200 thousand in 2011. Or of the hundreds of thousands of laid-off workers still being paid, but not for much longer, from a special fund that has grown by 864% in a year. Or of the millions of unemployed whose number is increasing in 2009, and that will continue to go up in 2010 as reported by the European Commission.
Why is the Italy boat not sinking yet? The reply is simple: because the Public Debt is going up. They are getting us into debt. We have reached 1,700 billion euro. The State is paying about 80 billion a year in interest. There’s a threshold before the collapse, but we haven’t got there yet. Meanwhile, what is needed by the State has grown by 17 billion euro in the first three months of 2009: 48 billion euro compared to 31 billion in 2008. The expenditure is going up and the money coming in, is going down. The tax authorities have taken in 4 billion euro less in the first two months of the year. The waste in the public administration is today’s topic. The Region of Sicily will take on 500 extra directors. One for every 8.4 office workers. Are we men or directors?
The unhappy decrease of the GDP continues regardless. Now we are at -4.4% compared to 2008. Tremorti is optimistic. He estimates that there will be a slight worsening of a few decimal points in the annual position. However, as everyone knows, including him, it will be much worse. According to Tremorti we will start to pick up in 2010.

...
They will never give up (but is it in their interests?). Neither will we.

By 2011 there will be a total of five/six motorcar manufacturers worldwide. The market is becoming ever smaller and the only manufacturers that will be able to survive (but for how long?) are those that merge with each other. This is the motor vehicle industry’s equivalent of Highlander, where at the end of it all, only one manufacturer will remain standing (or perhaps none). The collapse of the motor industry is historic, systemic. It has nothing to do with the current crisis because there has been an ongoing global drop in sales for the past decade. In 2009, the auto industry has shrunk by one third in the United States and by one quarter in Europe. The value of their shares on the Stock Exchange has plummeted. The shares of Fiat run by Marchionne, the Napoleon of the runabouts, have dropped in value from 17.702 Euro to 7.470. The State aid granted to the motor manufacturers is much like the subsidies paid to the press, in other words money wasted on trying to keep economic zombies alive. Fiat now wants to merge with Chrysler, Saab and Opel. In Italy, these mergers are held up as a triumph. One of the first effects of mergers is the restructuring exercise. From five factories down to two, from tens of thousands of employees down to just a few thousand. That’s what they call efficiency. Adjusting productive resources depending on market demand. Perhaps Marchionne doesn’t have any choice, but with this move he is safeguarding and perhaps even increasing, above all, his own salary. All in all a very respectable outcome.
Marchionne has hinted at "a gradual reduction in production capacity". In essence, a gentle euthanasia of factories and workers. Does it make any sense at all to invest public money in order to simply dismiss, reduce and close down? Never again will the motor industry go back to being what it used to be in the past. We are the real investors, not the Agnelli family. We citizens, with out taxes converted into national and European subsidies granted to companies with nonexistent development prospects. The motorcar belongs to the past. Renewable energy, the Internet and access to knowledge and environmentally friendly public transport are the future. Do we really want to invest in the manufacture of hundreds of millions more motorcars? Is this what the people who govern us believe to be development? Every Euro spent on the economy by the State must go towards creating new jobs and not towards yet another dismissal.

In the absence of cocaine, the GDPs of many western countries would collapse totally. The organised crime syndicates invest hundreds of billions of Euro of cocaine revenues each year into real estate, shares and companies. Cocaine is a driving force for the economy, but equally the economy is a driving force for cocaine. The cash crisis has had no effect on the Mafia groups, who are now able to go on a global shopping spree at bargain-basement prices thanks to the current financial crisis. He who controls the capital controls society. But who controls the controller of the capital? Financial systems and terrorism expert Loretta Napoleoni appeared alongside me as speaker at the European Parliament in Brussels on the first of April this year.

Text of the address
Financial Fools' Day

Il Patriot Act and money laundering

The alliance between the Columbian drug traffickers and the "ndrangheta"

A gang of delinquents

"Let me begin by saying that if you were feeling a little depressed up to now, after my address you will be feeling totally flat!
Today is a special day, because in London, where anti-capitalism demonstrations have been going on all day, and The City in particular, where the majority of the demonstrations have been well attended, today has been named Financial Fools' Day, or the April Fool’s day of the Financial World.
I think that this is quite an amusing way to describe the people’s anger and desperation regarding an economic crisis that was created by the banks, not only the Italian banks unfortunately, but also by other banks around the world, an epic crisis that no one seems to be able to handle in the first place. The members of the G20 will be meeting tomorrow in the hope that, in those few hours during which they will meet and take lots of photographs, they will be able to resolve all of the world’s problems, something that is highly unlikely to happen, and somehow these demonstrations in London are telling us that people are sick and tired of all these stories and no longer believe them.
I am an economist by profession and I can assure you that this is not a good time to be in this profession. When I deliver these addresses, many people expect me to haul out a turban and a crystal ball, because the truth is that economics and predicting the future are seen as one and the same. So today I thought that, instead of talking about the future, I would rather tell you a story about the past because I believe that in some way history must be our guide. This is something that we often forget and we have, in fact, completely lost our historic memory.
I would like to tell you about the phenomenon of economic interdependence, about how a piece of legislation introduced in one particular Country, and here we are talking specifically about the Patriot Act, which was a piece of legislation aimed at blocking the funding to terrorist organisations, eventually created a terrible and detrimental situation in other Countries, in this case Europe as a whole, turning Europe into the money laundering capital of the world, all of this between September 11 and now. This has occurred under our own eyes without us even realising what was going on.
The story begins with so-called deregulation, which the world leaders will be discussing tomorrow in the hope of reducing the damage done by deregulation. Many of the problems that you have heard about regarding the banks are precisely linked to deregulation, to the lack of legislation and to the fact that the banks were granted high levels of freedom with very little control by the State.
What happens with deregulation? In essence, it amounts to the removal of financial barriers and the removal of financial legislation and the controls between two countries. But who has benefited from this? As a matter of fact, it is not only organised crime that has benefited, but also the entire underground economy and the militant groups.
And so, the period between the early nineties and 2001 saw the establishment of a new economic system, which serves the interests of these groups, resulting in the establishment of joint ventures, such as the relationship that existed between the Columbian FARC movement and the drug traffickers, and associations are even formed by various militant groups and criminal organisations in order to exploit a number of financial channels in order to launder dirty money.
Prior to 11 September, the total value, the turnover, the GDP, or the cash production if you will, of this economic system amounted to some 1,500 billion Dollars, in other words approximately 5% of the global economy, almost all of it in Dollars, in fact about 90% of this cash production was in the form of Dollars. The Dollar was the currency of choice, specifically the 100 Dollar bill. Much of this flow of dirty money was laundered in the United States, in Dollars, via the financial havens in the Caribbean Islands.
In actual fact, this money laundering activity was beneficial for the American economy because it acted like a cash injection, which we discover when we analyse the data relating to the supply and demand for the American currency. From the mid-sixties through to 2001, a certain amount of new money, namely the bills printed annually by the Federal Reserve, was illegally taken out of circulation in America in suitcases or cardboard boxes that left the country in the form of boxes required for removals, etc, illegally in other words, and this money went towards satisfying the demand for cash, not only from criminal elements, but also from terrorist organisations and various other sectors of the underground economy.
In 2001, two thirds of the new supply of American currency, in other words the money printed in 2001, left the United States in this manner, a cash supply equivalent to 500 billion Dollars, which means that cash growth in the United States was lower, thereby increasing the internal demand for American currency and thus increasing the demand for money from outside the borders, which was satisfied by the currency provided by the criminals, the terrorists and the underground economy. However, there is yet another very interesting aspect of this inter-relationship, namely the fact that the Dollar is the global reserve currency, which means that the American Treasury can take out loans against the total number of Dollars in circulation worldwide, so the American national debt is equivalent to the number of Dollars in circulation in the entire world.

Clearly then, if the underground economy demands an increasing number of Dollars every year, then the United States can get increasingly deeper in debt, but this only holds true for the United States because it is part of the so-called "seignorage".
This does not occur in Europe, because, for example, the European Central Bank cannot issue bonds for any sums in excess of the number of Euro in circulation in the EU member Countries, even though there may well be a large amount of Euros in circulation in the United States or even in Asia, Africa, etc, so the United States are in an ideal position, or rather they were in an ideal position until September 11, but why is this? Because the situation changed radically after September 11.
As you are all well aware, the Patriot Act, which is a piece of anti-terrorist legislation, was introduced in November 2001 and it is the financial implications of the Patriot Act that is of interest to us. The objective of the Patriot Act was to limit the amount of funding destined for terrorist groups, however, clearly this objective was never actually achieved because, in fact, it is legislation against money laundering, as proven by the following two basic elements of the Patriot Act: 1) it prohibits American banks and foreign banks registered in the United States from having any business dealings with any banking institutions based in the Caribbean tax havens.
The second interesting element is that the Patriot Act allows the financial authorities to monitor all Dollar transactions worldwide and if any American bank or foreign bank operating in the United States fails to notify the authorities about any suspicious transaction, said bank is deemed to be criminally liable and we know of some very interesting cases including not only "Lloyds Bank", which was one of the latest banks to be penalised and was forced to pay some significant fines, but also USB, etc. So what is actually going on? What is happening is that the Patriot Act was only introduced in the United States and is only applicable to the Dollar, so it has totally revolutionised the cash flows of the legal economy and the underground economy alike.
Let us firstly look at the legal cash flows. Clearly the international banks did not like this piece of legislation because, as we heard a little while ago, back in 2001, no one wanted any Patriot Act introduced in another country that would enable outsiders to scrutinise any dealings between a bank and its customers, so what happened next? What happened next was that the international banks advised their customers to abandon the Dollar Zone and switch to the Euro. The Euro was the new European currency that had just recently come into circulation, so it offered numerous opportunities and, above all, Europe did not have any legislation similar to the Patriot Act and indeed there were tax havens in existence in Europe that worked very well, with no one checking up on anything. Thus we see a flow of money away from the Dollar and into the Euro and it is very interesting to examine the correlation between the introduction of the Patriot Act, the start of the fall in the value of the Dollar and the beginning of a renaissance in the level of interest in Europe. A group of OECD economists did some research, looking for some correlation between the various data, which in essence revealed the following: the introduction of the Euro coincided with the end of era of the Dollar, but this does not relate solely to legal monetary flows and an important aspect of the switch to the Euro is also seen in the underground economy, where the criminal world found itself in a rather complex situation and began wondering where to go next. Money laundering was no longer possible in the United States and it was becoming increasingly difficult to repatriate their money, because the problem of money laundering is a twofold problem, namely, not only how to launder the money in the first place, but also how to get the proceeds of the criminal activities back into your hands. There were a number of potential schemes available, for example the “black pesos money exchange” scheme run by the Columbians, where the drug traffickers acted as veritable currency exchange agencies. How did the scheme actually work? Perhaps there was a Columbian businessman who wanted to go to the United States, without alerting the financial authorities that he would be taking money abroad and thereby having to pay taxes as well as having to convert the money at the official rate of exchange. He would go to one of these currency exchange agencies, hand over his Pesos and then, once he arrived in New York, someone would deliver a briefcase full of Dollars, which Dollars obviously originated from cocaine sales by the drug traffickers.

The basic problem was actually a totally different one, namely that during the 90’s, thanks to globalisation, revenues from the sale of drugs had increased exponentially and the drug traffickers had to find new ways to launder these revenues on an industrial scale since the sums involved were enormous and I’m telling you that 80% of all money laundering is done by means of cash, so the “black pesos money exchange” scheme was physically unable to cope with this amount of money. It was at this point that an Italian emigrant to Columbia, a man by the name of Salvatore Mancuso, who had become the commander of the paramilitary unit of the AUC, had a brilliant idea and decided that the best thing to do would be to put his buddies in the “ndrangheta” in contact with the Columbian drug traffickers, and thus a fantastic alliance was born, in the sense that it represented a new start for the Columbians, and this is the truth!
Why a new start, you ask? Because it provided them with an opportunity to export cocaine to another continent, instead of simply a neighbouring continent that was rather limited in the sense that the cocaine simply moved from South to North into the United States. Now there was this new opportunity to bypass the restrictions imposed by the Patriot Act since Europe is a place where it is easy to launder money, as there is no legislation in place to control and punish these types of business activities.
So what happened next? A proper business is established to sell cocaine, where the cocaine exported from Columbia would initially arrive in Calabria and, from Calabria, the “ndrangheta” would proceed to distribute it via its own network, a network that it had built up for itself in Europe. Here we must pause for a moment to point out that all of this was only possible because the “ndrangheta” already had an existing European network, the only organisation with such a network at its disposal since neither the “Cosa nostra” nor the “Camorra” had any similar network in place. So the “ndragheta” had this widespread network, not only extending throughout Europe, but essentially worldwide, a network created by the dispersion of millions upon millions of people from Calabria who had moved abroad over the past 30/40 years as foreign immigrants, so the “ndrangheta” was not only in the right place at the right time, but also used its brains in that, instead of offering high-ticket services, they did the exact opposite, offering the drug traffickers a low-cost importation, sale and money laundering service through the network, because the network also included a number of attorneys, accountants and real estate agents who collected the money as soon as it came in and, thanks to the existence of the Euro, moved the funds from one Country to another, investing it in real estate because this network, working in conjunction with various real estate agencies, in essence launders money and generates profits, which are then legitimately repatriated to Columbia via the formal banking system.
The “ndrangheta” handles all of this for a 30% cut. In the United States, following the introduction of the Patriot Act, the laundering of drug revenues costs the drug traffickers around 60%, so the “ndragheta” offers a fantastic service. Furthermore, according to the available intelligence, the organisation is able to market the cocaine on the European market by selling it at a very low price, thereby competing with the so-called lighter drugs rather than with the more expensive drugs, and so we see that between 2001 and now there has been an exponential increase in the use of cocaine as the preferred recreational drug of the middle classes, so you see how easy it is? It is therefore true that all anyone needs is a brain and an established network. This is the current reality, namely, there are no laws and there are no controls in place. Just think that this money laundering is occurring via the real estate sector and it is thus very difficult to control because, for example, the Deeds Registry Office on the Costa del Sol has no way of communicating with the Deeds Registry Office in London, so they will never know whether the same company is busy making purchases in various locations in Europe, either simultaneously or at different times and, furthermore, there is no system in place to monitor the financial and cash transactions in Euro that may be taking place across European borders, there is no such thing!

Therefore, the situation in Europe is currently ideal for the criminal element and that is why Europe has become the money laundering capital of the world. Now let’s examine the latest development before we all go home. The latest developments began in 2005. Demand for cocaine was increasing exponentially because the drug was cheap and fun, the “ndragheta” had done a marvellous job of marketing the drug and it was becoming increasingly difficult to keep up with the speed required in transporting the drugs, so what was decided? They decided to utilise Guinea Bissau as a trans-shipment point, the latter being a final destination point from where the drugs generally distributed. A smart idea because Guinea Bissau is easily reached within 3 to 4 hours by means of light aircraft and or tourist aircraft from Columbia or from Venezuela, because a lot of these drugs come through Venezuela. And so Guinea Bissau becomes a drug trafficking country and is promptly colonised by the drug traffickers, who then organise warehouses where the incoming drugs arrive, are stored and where the European buyers arrive the same day, buy the drugs and take it back with them to Europe either by means of light aircraft or small boats.
The truth is that currently, all it takes is one week for the drugs to get from the Columbian producer to the consumer in the European disco, and the majority of this trade is controlled by criminal organisations linked to none other than the Italian “ndrangheta”.
So what is lesson to be learned from this story? I can see that you are looking very dejected. The fact is that we need to accept that there is an economic interdependence between the official economy and the underground economy and it is useless for us to attempt to deny this. Many of the products that you buy inevitably contribute to making some or other delinquent very wealthy, not only drugs, and that is a fact. So if we truly want to do something about it, if we want to block this trade and if we want to resolve the current economic crisis, because in reality this crisis was created by the gang of delinquents that are the bankers that have caused the problems we are currently facing, we must firstly accept the fact that this interdependence exists and that we can only get ahead by preventing further cross-contamination of our legal economy by the criminal and underground economy, otherwise the situation I have described will only deteriorate and we will increasingly become the victims!" Loretta Napoleoni

> Loretta Napoleoni’s latest book, entitled: "La Morsa".

The demonstrators in the City of London smashed the windows of the Royal Bank of Scotland. From inside the bank, bank officials threw out some banknotes, hoping to calm down the crowd. Instead, it infuriated them even more. This gesture is somehow symbolic of the crisis itself. The banks have the money, they make the money and they can therefore give the money away. We are constantly being told that if the banks fail, then the entire system will fail. In other words, the banks are the system. They are immune to fraud. If their top managers steal, particularly in Italy, then they are rewarded. They are the guarantors of the funding granted to lobby groups, to the political parties and to Confindustria.
The bank thefts are always within the law. In Italy, there is no such thing as class action. How many of the banks would still be going if they had been obliged to reimburse all of the people defrauded by Parmalat and the Tango Bonds? The banks were well aware that the shares had lost all of their value and so, in order to get rid of them, they sold them to their customers, current account holders and investment funds right up until the day before the crash. The leading bankers knew all about the Argentine default and the Parmalat crash.
The banks are organisations with unlimited irresponsibility. Mediobanca, which is quoted on the Stock Exchange, is the case in point of the Italian financial system. The Bank’s President, Cesare Geronzi is under investigation for the Parmalat crash, for aggravated usury and for collusion in fraudulent bankruptcy. In the case of the Cirio crash, he is under investigation for fraud in terms of the issuing and distribution of Cirio bonds through Capitalia. In the case of the Italcase crash, he was found guilty of fraudulent bankruptcy and sentenced to one year and 8 months imprisonment,