11 Signs That Italy Is Descending Into A Full-Blown Economic Depression

Tyler Durden's picture

Submitted by Michael Snyder via The Economic Collapse blog,

When you get into too much debt, really bad things start to happen.  Sadly, that is exactly what is happening to Italy right now.  Harsh austerity measures are causing the Italian economy to slow down even more than it was previously.  And yet even with all of the austerity measures, the Italian government just continues to rack up even more debt.  This is the exact same path that we watched Greece go down. 

Austerity causes government revenues to drop which causes deficit reduction targets to be missed which causes even more austerity measures to become necessary.  But if Italy collapses economically, it is going to be a far bigger deal than what happened in Greece.  Italy is the ninth largest economy on the entire planet.  Actually, Italy used to be number eight, but now Russia has passed it. 

If Italy continues to stumble, India and Canada will soon pass it as well.  It really is a tragedy to watch what is happening in Italy, because it really is a wonderful place.  When I was a child, my father was in the navy, and I got the opportunity to live there for a while.  It is a land of great weather, great food and great soccer.  The people are friendly and the culture is absolutely fascinating.  But now the nation is falling apart. 

The following are 11 signs that Italy is descending into a full-blown economic depression...

#1 The unemployment rate in Italy has risen to 12.2 percent.  That is the highest that it has been in more than 35 years.

#2 The youth unemployment rate in Italy is sitting at 38.5 percent, and in southern Italy it recently hit the 50 percent mark.

#3 An average of 134 retail outlets are shutting down in Italy every single day.  Overall, approximately 224,000 retail establishments have closed since 2008.

#4 Italy's economy has now been contracting for seven quarters in a row.

#5 It is being projected that Italy's GDP will shrink by 1.8 percent this year.

#6 Industrial production in Italy has declined for 15 months in a row.  It has now fallen to its lowest level in about 25 years.

#7 Overall, factory output in Italy has fallen by about one-fourth since 2008.

#8 In May, automobile sales in Italy were down 8 percent compared to one year earlier.

#9 The number of people that are considered to be "seriously deprived" in Italy has doubled over the past two years.

#10 Italy now has a debt to GDP ratio of 130 percent.

#11 It is being projected that Italy will need a major EU bailout within six months.

At this point, Italy is flat broke.

And unlike the U.S. or Japan, Italy cannot run over to a central bank and have them print up oodles of new money with which to buy up government bonds.  Italy is married to the euro, and so that greatly limits their options.  Unfortunately, the money is rapidly running out.  The following is from a recent article by Wolf Richter...

In most countries, it would be an act of mind-bending chutzpah, or perhaps a display of political insanity, but in Italy it barely made ripples: for a government official, a minister no less, to declare that the country cannot pay its long overdue bills, and not for a month or two, but for the rest of this year! Due to "technical" problems.


The Italian government is out of money. Not that the US government is in any better shape in that respect, or the Japanese government for that matter, but they have central banks that print the missing moolah with lavish abandon. Italy doesn't. It has the ECB which is run by an Italian who promised last year to print with lavish abandon to keep countries like Italy afloat. But that promise is not the same thing as having your own central bank.


On July 4, Italy's budget fiasco came to light once again. Wracked by the pretense of austerity, expenditures rose 1.3% in the first quarter, while revenues remained flat. So the deficit rose to 7.3% of GDP, up from 6.6% last year, bringing the national debt to 130% of GDP. Ballooning debt and deficits in a shriveling economy – Italy has been in recession since the fourth quarter of 2011 – is a toxic combination in the Eurozone.

While those numbers may sound really bad, the reality is that the people that are suffering the most are the average folks on the street.  Many Italians have been completely blindsided by this economic depression, and suicides are skyrocketing...

In Italy, the tragic stories of suicides apparently linked to the deep recession are becoming all too frequent. Last month, a former factory worker hanged himself near Turin because he could not find work, his relatives said. In May, a young man committed suicide outside of Rome shortly after he lost his job. The next day, Italian President Giorgio Napolitano begged the government to deliver “the utmost attention for situations of greatest malaise and need” to help stop the wave of suicides.

That is absolutely tragic.

But you know what?

The United States is headed down the same path that Italy has gone.

In the coming years unemployment and suicide will both skyrocket here too.

Those that are sticking their heads in the sand right now will be absolutely blindsided by what is coming.  But those that understand what is on the horizon and are preparing for it will have the best chance of making it through.

Italy is kind of like the Leaning Tower of Pisa.  Everyone knows that it is going to fall eventually, and when it does fall it is going to be a major disaster.

When the financial system of Italy totally implodes, that will be a sign that things are really starting to accelerate.  Expect dominoes to start tumbling much more rapidly in the aftermath.

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Manthong's picture

The good news is that they have substantial gold reserves safely secured in the US,


Fuh Querada's picture

a goodie on KWN today



"....Regarding that gold, which could have had the symbol of the Bundesbank on it when it arrived in Hong Kong, a leading refiner, one of the biggest in the world that deals with the People’s Bank of China (PBOC), certified that, ‘Yes, we’ve got gold available that we can deliver.  We’ve melted it down, we’ve tested it.  It may have had the Bundesbank symbol on it when it arrived, but now it’s melted down .9999 (fine) gold.’..... 

Manthong's picture


remember.. "full faith and CREDIT"

don't leave home without it.

lakecity55's picture

"This note is legal Tinder....."

Skateboarder's picture

A few years ago I gave my sister some advice: "marry an Italian chef (in Italy) and run a mom'n'pop."

Might have to take that back.

Manthong's picture

no, man..  I think you were good with that..

good and/or productive service ...  but.. need to be aware of the pitfalls that whichever .gov puts in the way ...

low profile..  and keep your back to the wall.

franzpick's picture

Italy: where repossession is becoming 9/10th of the law.

Manthong's picture

nah..  it could never be like Cyprus,,

BaBaBouy's picture

""The good news is that they have substantial gold reserves safely secured in the US,""


Hehehehe ... We All Know How Well BEN Shalom ET AL Guards Their Physical GOLD...

Panafrican Funktron Robot's picture

At least from official reporting, Italy has about 2500 tonnes of gold.  It seems increasingly likely that they (along with Portugal and Greece) are being specifically targetted for their gold holdings.  

TBT or not TBT's picture

Or maybe those are simply democracies run amok, with populations voting themselves goodies out of the public treasury rather than working, saving, and investing to get what they want. The founders warned of this, based on their knowledge of past collapses dating back to antiquity, and the origins of the word demagogue.

Seer's picture

The cows are out of the barn, I think that we all recognize that.  PF's statement is still THE relevant angle/question (though it only seem like a logical extension of the BIG PATH).

Italy doesn't have energy.  In a world dominated by energy anyone without energy, no matter their style of money management (or lack there of), is ultimately of no real determinant of the final outcome.  The BIG PATH is dominated by the energy theme.

If the "founders" were here today I could easily derail most of what they'd projected by confronting them with simple math (growth and exponential functions): did any of them have any real mathematical acumen? (many of them proved to be really bad with their own money- and why would we expect ANY politician to behave anyway other than this?)  Issac Asimov elucidated it quite well with his metaphor of "the bathroom:" http://www.youtube.com/watch?v=d1ZX-x7sySI


Sudden Debt's picture

that reminds me... did they already get the water out since that flooding? Do people now get to go see their gold?

holgerdanske's picture

Yeah, right. All nicely together with the gold reserves of the US itself.

ArkansasAngie's picture

Mario won't let that happen

It can't happen.

Errr ... maybe it won't happen

please ... please let it happen

asteroids's picture

That asshole is seeing people kill themselves because they have lost hope. What do he and his central bank assholes do? Ignore them. Historically, they do so at their peril.

Skateboarder's picture

Squid radar says:

[x] Fed
[x] BoE

The takeover is complete. Full steam ahead!

Seer's picture

"people kill themselves because they have lost hope."

Not trying to be trite or insensitive (I had a sibling commit suicide, in which case I have had a bit of a peek at what this means), but perhaps they should never have sought out "hope?" (I'd think that the "Obama = Hope" thing should have made this quite clear, put it to rest.)

My favorite definition of "hope," one that I think is most accurate, was concocted by one of Derrick Jensen's audiences:

"Hope is a longing for a future condition over which you have no agency."

"Hope" and "unicorns" differ little.

As long as you're insistent upon operating in a perpetual-growth paradigm with a bunch of sharks (mobsters, govt, big business, church, military etc.) then you're clearly working against the odds of generating any results that are personally favorable to you.

"What do he and his central bank assholes do? Ignore them. Historically, they do so at their peril."

Does anyone really expect them to start giving the shirts off their backs (everything seemingly feeling that way to them)?  One does not maintain a hierarchical structure by flattening it out!  "Historically" They may end quickly, but their seeds still abound... AND! people are ignorant enough to think that they were involved in "fixing" things, only to merely end up changing the players (the "shoot the bastards" mentality, which ends up with a bunch of dead bastards and the System just regenerates new, live, ones).

Anusocracy's picture

If they want government then they are getting what they deserve - the consequences of their actions - good and hard.

All government lovers should be Darwin Award winners.

Manthong's picture

"anything it takes"

from GS, JPM, FRB, BOJ  ...

same difference

fonzannoon's picture

If it was totally about debt, Japan would have been dead and buried already.

Japan is in worse debt shape than Italy, yet their 10yr bond yield is .87%.

Hedgetard55's picture

Personal savings is the difference. Japan can still fund their debt internally (well, maybe not much longer) but Italy cannot.

Manthong's picture

not without the FRB with swaps as a backstop like they did with LTRO1 an LTRO2 for the ECB

get hip..   SMOKE AND MIRRORS.

NoDebt's picture

Japan has a central bank and their own currency, of course.  And deflationary pressures have helped keep interest rates on that debt neary zero since I was a mere lad.  Whether Abe's "kitchen sink" reflation plan will work or put the final nail in their coffin.... who knows.  Remember that .87% used to be .37% not more than a few months ago, if memory serves.

It's combination of big debt and not having your own printing press that puts Euro-zone debtors into trouble so quick when they step over that invisible interest rate line. 

Of the two ends of that spectrum, I think the US most closely resembles the Japan situation.

McMolotov's picture

The difference between Japan and the US is that the Japanese will quietly sit there as their economy implodes and they starve to death. Here in the US, we'll riot and start eating each other.

Forward History's picture

I'll be Rick, you be Shane. What's the worst that can happen?

Manthong's picture

some nip said something about every blade of grass.. i forget what that was about.

TBT or not TBT's picture

What happens though when America invades itself? Maybe a Zimmerman acquittal will let us rerun the Rodney King riots here in 2013, so we can see what holds today. We have far more militarized police in the us today, but also lots of guns, bullets, and a rate of zombie themed entertainment consumption that presages that Something Graphic This Way Comes. Like a whole month of Chicagoesque blue state mayhem, but per hour, for a couple of days.

Totentänzerlied's picture

In Japan they are already ready (though diminishing with each generation - but only ever so slightly) to return to a far more sustainable mode of civilization. Their national culture never really left that mode, and it will save them from a total societal implosion.

Those countries whose societies long ago abandoned the cultures that no longer suited their fancy progressive bourgeois modernity ... they'll pay for it in blood, and the rest will laugh at their hubris.

What works, versus what sounds good.

Seer's picture

"Whether Abe's "kitchen sink" reflation plan will work or put the final nail in their coffin.... who knows."

I do.

It ain't.

Questions?  Wagers?

Dr. Engali's picture

Japan has a printing press and they actually make stuff. Italy has.......wel they have????l... Ahhh they have Bunga Bunga.

fonzannoon's picture

Italy has a shtload of gold. That is all they have going for them.

Dr. Engali's picture

Not for long. The Eurocrats will be demanding that shortly.

fonzannoon's picture

Italy will leave the euro before they sell that gold.

lakecity55's picture

No, Brussels will take their gold then kick them out of the yooro.

ArgentoFisico's picture

We do have just a little bit of our gold here in Rome ... majority is at the FED (sure, it's there ...)

Video on today fight in italian parlament. One from the "Democratic Party" takes on a 5 star one. The 5 stars were clapping hands to the 1 day suspension of works of the parliament decided by BananaBerlusconiParty & Democrats to protest (!!!) against the judges that want to put B. in jail for tax evasion


Kirk2NCC1701's picture

I sure hope you're right.  In fact, I'd like to see all the countries with decent gold holdings leave the EU.

Then you'd have a real Shock & Awe show.  If they had guns.

kito's picture

fantastic wines............rolling hills...........wonderful coastline....................skiing in the alps (just ask simon black).........................greatest pizza in the world found in naples.................fonz....why are you dissin your paisans!!!!!!!

Freddie's picture

Fonz is being stunod.


It is hilarious if you use southern Italian dialect with northern Italians.  It is like eBonics to them.  The northern Italians are real snobs but it is a wonderful country.

cifo's picture

They also make ferarris, maseratis, vespas. And helicopters.

Freddie's picture

And motorcycles - mama mia!  Ducatis, MV August (F3,F4), Aprilla (RSV4) to name a few.

DoChenRollingBearing's picture

Berettas...  RIV bearings...  I hope they can pull themselves together because it is a wonderful country.

Kirk2NCC1701's picture

Italy.  Wasn't that one of those cowardly countries that rolled over, and denied air passage to the Bolivian President Evo Morales?

We should have all US and NATO tanks made in Italy:  1 Forward gear, 4 Reverse.  Peace would brake out everywhere.

HardlyZero's picture

Is the Vatican like The City in London ?  Couldn't the Italian government just move the location of their Gold to internal location behind the Vatican walls ?

It would be like an internal thing...and might encapsulate their Gold so it becomes 'untouchable'. 

Just a thought about where the Gold may go to be safeguarded.

Has Italy requested to have its physical Gold returned ?  when ?

CH1's picture

Italy has.......well they have????

Southern Italy grows an immense amount of foodstuffs. Northern Italy manufactures a LOT of things.

Dr. Engali's picture

Well they do have two of my favorite gun manufacturers I'll give them that..Benelli and Beretta.