What The Italian Election Could Mean For Gold
German Chancellor Angela Merkel wants a job. But not a real job…
Merkel is a career politician.
She’s on track to win a fourth term on 4 March.
We’re not sure whether that’s good for the European economy. We’d argue it’s not. It shouts ‘more of the same’ for another four years. Higher taxes, more regulation and austerity are the name of the game.
Merkel is planting the seeds for the next sovereign debt crisis.
She’s in charge of the European Union’s largest economy and was also the chief architect behind the refugee crisis. She is an extremely dangerous career politician. Merkel is a huge supporter of the European Union — an unelected and power-hungry establishment.
Thanks to Merkel’s hard-line policies, multiple countries could leave the European Union within the next five years.
Will Italy be next following the Italian election?
Will Italy be next to leave the European Union?
openDemocracy, a British political website, reported yesterday:
‘Has Italy lost its way? And could instability in the country jeopardise ambitions for a reform of the EU and the Eurozone? In the run up to an election that most commentators expect will produce no clear governing majority, ink has been generously spilt discussing the uncertainty surrounding the Italian vote.
‘The Five Star Movement (M5S)’s establishment as a major force on the national political stage has recently added further uncertainty to an already faltering picture. Its self-declared posture beyond left/right politics disrupted a bipolar system that had crystallised in the previous two decades around the competition between centre-left and centre-right.’
Five Star Movement is the favourite to win the Italian election on 4 March. It’s an anti-establishment party, led by Luigi Di Maio. The 31-year-old was an unemployed university dropout five years ago. Today, he’s the front-runner candidate for prime minister.
Di Maio wants to renegotiate the country’s policies with the EU. But, considering Greece’s negotiations in 2015, there’s a slim chance of a successful outcome.
Di Maio says he will let the people vote to leave the EU. But will that make a real impact? History suggests no. Independent reported on 27 June, 2016:
‘There are a number of examples of referendums in Europe which have been ignored by the government of the day.
‘The most recent and striking example was in July last year when the Greek people voted by about 61 per cent to 39 per cent to reject harsh austerity policies sought by the EU and other global institutions in exchange for a multi-billion-pound bailout.
‘Despite the vote, the left-wing government in Athens, fearing the country’s banks and economy would collapse, agreed shortly afterwards to even tougher austerity measures.’
Greece looked set to exit the Eurozone at the time. It didn’t happen. The country’s politicians didn’t want to give up power, putting their heads on the line. Italy might follow in the same footsteps.
We expect a referendum in the second half of the year, provided Five Star Movement wins the election in Italy. Whatever happens, politicians tend to drag negotiations on for months. So, if Five Star Movement does win the election, uncertainty should rise across Europe later this year.
The majority isn’t happy with the status quo and is demanding change. That’s putting pressure on politicians in power. Angela Merkel has found it more difficult to stay in power, as have others…
A growing movement
Multiple countries are electing ultra-right-wing leaders, such as Donald Trump in the US and Shinzo Abe in Japan. And at the age of just 31, Sebastian Kurz became the world’s youngest prime minister in Austria last year.
Other countries have rejected their former socialist governments. But they haven’t moved fully to the right yet.
Some socialist nations, such as France, decided on a centralist government last year. It couldn’t decide on a left- or right-wing party. The Dutch couldn’t decide either. Politicians took 208 days to form a centralist government last year.
Former Italian Prime Minister Silvio Berlusconi also wants to form a new centralist government. He wants to sway voters away from Five Star Movement in the Italian election. There’s a good chance his plan could work, considering what happened in France and the Netherlands.
Jacinda Ardern, leader of the New Zealand Labour Party, won the federal election in October. She is ultra-left-wing. But, similar to the stories above, voters wanted something drastically different to their previous government. That’s why they elected the youngest woman in history as prime minister.
Jeremy Corbyn is the Labour Party leader in the UK and is a favourite to win the next election. He is a pure Marxist and wants to keep the UK in the European Union. Given the failures of the Theresa May government, especially when dealing with Brexit, there’s a good chance he could win.
It’s clear that people aren’t happy and want something different. That’s why we’re seeing old governments thrown out and extreme politicians, whether left or right, elected around the world.
The bottom line: The political tide is changing, and that’s starting to impact markets. How is it influencing gold? Find out more here.
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