And now for something completely refreshing
Italy… welcome back! Too bad about your shrinking population and mountains of debt
Giorgia Meloni is a far right fascist. She eats babies, shoots lasers from her eyes and will be the death of Italy. At least that’s what the narrative coming from those who have riden climate change, COVID and identity politics into the mainstream as “The Science (TM)” would have you believe. And boy oh boy, are “they not happy about it.”
European Commission chief Ursula von der Leyen has warned Italy of consequences should it veer away from democratic principles, issuing a barely veiled threat ahead of Sunday’s election that a rightist bloc led by Giorgia Meloni is expected to win.
“My approach is that whatever democratic government is willing to work with us, we’re working together,” von der Leyen said at Princeton University in the United States on Thursday,
“If things go in a difficult direction, I’ve spoken about Hungary and Poland, we have tools,” she added.
Well. Here she is. Terrifying! Watch this 2 minute clip and see for yourself.
Well, that was refreshing.
To be clear, Italy has a lot of problems that a new leader alike can’t fix.
Italy is facing an existential crisis that threatens the fate of the entire European Union. The 2022 Italian Crisis is a toxic cocktail of excessive debt, poor demographics, and political instability. The root of the problem is a demographic crisis that is set to accelerate over the next 10 years.
An economy needs people aged 15-64. This is considered the working age population, and this is critically important for an economy because people who are actively working consume more, spend more, and earn income that can be taxed to support a country's debts. Fewer workers mean less income and less tax revenue.
If you have trillions of dollars of debt and no tax revenue, then mathematically, you cannot support or repay your debts.
The working-age population in Italy is completely imploding. In 2012, Italy flipped from positive prime-age population growth to negative prime-age population growth. An economy simply cannot function when prime-age population growth turns negative.
Japan has long been the poster child for the worst demographics in the developed world, but Italy will surpass Japan in the next 2-3 years and hold the title for the worst demographics.
And as less workers are saddled with higher debt, the workers that remain get angry and political instability arrives.
Can Ms. Meloni save Italy? Probably not. But “God, Country, Family… men are men, only women can have babies and we won’t be slaves in your genderless consumerism” isn’t a bad place to start.
Good luck out there this week… it’s gonna be an ugly one in the markets.