Guest Post: Has Italy Gone Fascist?
Submitted by Morpheus
Has Italy Gone Fascist?
In August this year, CLSA’s Russell Napier wrote: “Italy is scary – yields will rise when governments chose to take money from their savers – what Russell calls THE GREAT THEFT - Expect massive capital flight”. Yet while Russell was commenting on Italy’s opening move in repressing private capital by raising the capital gains tax, but not on gains of government debt, the situation has moved with such speed over the past 5 months that the emergence of the first Fascist regime following the 2008 crisis can probably now be associated with the new Monti government.
And while Doug Casey addresses getting out of Dodge on these pages (http://www.zerohedge.com/news/doug-casey-addresses-getting-out-dodge), it may be time for Italian to get themselves as well as their capital even faster out of Pizzaland.
Here are the latest developments which are coming in at extraordinary speed:
- The appointment in December of an unelected government. This government has no accountability and no fixed time mandate. It is being sold as being “technocratic”, but is in fact headed by a University Professor who is distinguished for: (i) having been head of the EU Internal Market Commission, where he used the power of the State to fine Microsoft and other corporate that were “getting too big for their boots”;(ii) being a good friend of Romano Prodi, another University Professor from the Communist heartland of the University of Bologna and creator of the Euro (more on him later);(iii) a paid hand of Goldman Sachs and a friend of Mario Draghi, another Goldman puppet who dispatched of the government of Berlusconi within days of taking the helm of the ECB; (iv) a fervent believer in the pre-eminence of the state over the individual;
- Prodi, the original architect of this catastrophe, famously made this comment in 2001, indicating that this cabal of Professors are playing a very long game indeed:
I am sure the Euro will oblige us to introduce a new set of economic policy instruments. It is politically impossible to propose that now. But some day there will be a crisis and new instruments will be created.”
Romano Prodi, EU Commission President, December 2001
- Thanks to his friendship with Monti and the current government, he is very much still involved in shaping just what such instruments can be;
- The passing of an extraordinary edict making cash transactions of more than Euro 1,000 illegal (not subject to reporting – just plain illegal). Following Prodi’s own desire, the existing regime has indicated that this level will be progressively reduced to a limit as low as Euro 300. Hence cash is maybe for the first time in history no longer legal tender (over Euro 1,000, for now);
- A requirement that credit card companies report all transactions carried out by Italians, in Italy and abroad to the fiscal authorities;
- Delays and refusals by banks in allowing customers to withdraw cash balances of as little as Euro 10,000;
- Finance Police has placed cameras at the physical borders with Switzerland (see below) to register all license plates. In addition, currency-sniffing dogs have been deployed at the border (http://www.cdt.ch/ticino-e-regioni/cronaca/56250/fiscovelox-riapparsi-no...).
Events in Italy must be watched closely. The country that gifted Fascism to the world in the 1930s was widely admired even by FDR, who held Mussolini in high regard and was no doubt inspired in many of his own policy choices. Will Italy lead the way once more, as politicians in Europe and the US watch to see what oppressive policies they may get away with?
And while Russell Napier (correctly) foresees capital controls being imposed and suggested that one parks his cash in Singapore dollars, Italians may want to get themselves out as well before the current group of Professors slams the gates shut. Things are moving even faster than one of the world’s leading financial historians could foresee.