Sunday, 23 October 2011
Italy is under fire once again.
French President Nicolas Sarkozy and German Chancellor Angela Merkel took Italian PM Silvio Berlusconi aside for a little chat this morning. According to a source cited by Reuters, the two leaders felt it necessary to impress upon the bawdy PM "the urgent necessity of credible and concrete reform steps in euro area states."
Merkel later told reporters that if Italy's debt remains at 120% of its GDP, "then it won't matter how high the protective wall is because it won't help win back the markets' confidence."
With the fourth-largest economy in the European Union, Italy's $2.2 trillion debt burden has investors running scared, regardless of austerity cuts.
With borrowing costs skyrocketing again, Italy is looking like the weak link that could drag down the euro unless EU leaders can come up with a solution.
Italian Banks Want Protection of Gold Reserves
March 1st, 2011
The Financial Times reports on the front page of their company and markets section (see news below) that Italian banks are seeking to use gold in order to strengthen their balance sheets ahead of coming stress tests. They wish to mark-to-market the considerable gold reserves of the Bank of Italy (Italian central bank), of which they are shareholders, in order to transform their core capital ratios.
As of December 2010, the Bank of Italy had gold reserves of 2,451.8 metric tonnes (68.6% of their foreign exchange reserves) which makes them the fourth largest sovereign owner of gold in the world – after the US Federal Reserve, the German Bundesbank and the International Monetary Fund (IMF).
“Senior bankers say taking into account the surge in gold prices the Bank of Italy could have a mark-to-market value of about €30 billion.â€
The move would mark a further remonetization of gold in the world financial and monetary systems and may be a prelude to similar actions (revaluation of gold reserves or possible devaluation of currencies versus gold reserves) being done by other central banks.
The Federal Reserve may be forced into such an action in order to protect the US dollar. The Federal Reserve’s financial position has deteriorated drastically in recent years and is being constantly diminished by quantitative easing and the electronic creation and printing of money to buy mortgage backed, Treasury and other securities.
German Politicians Want Spain And Italy To Sell Off Their Gold
Aug 09 2011
Members of Berlin's coalition government are pressuring Italy and Spain to sell off their gold reserves in order to stem ECB bond buying.
According to Financial Times Deutsche land (via Finanzas.es), PM Angela Merkel's own Christian Democratic Union (CDU) and the Liberal Democratic Party (FDP) are getting behind the measure.
"They should fix their own budgets, something they can accomplish through privatizations and selling their gold reserves," argued CDU spokesman Michael Fuchs.
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