How December 4 Could Trigger the “Most Violent Economic Shock in History”
It was the one moment that convinced Hitler suicide was better than surrendering.
On the morning of April 29, 1945, the bodies of Italian dictator Benito Mussolini and his mistress were dumped like garbage into Milan’s Piazzale Loreto.
A large mob of Italians quickly gathered. They pelted the former leader’s corpse with vegetables. They spat on it. They urinated on it. Some even emptied their pistols into his lifeless body.
After a few hours, the crowd hung the bodies from a metal girder at a nearby gas station for all to see.
The corpse of Benito Mussolini
I walked through Piazzale Loreto during a recent trip to Italy, which is suffering its worst economic downturn since 1945. And I realized that Italians are angrier now than they’ve been since they hung Il Duce up by his heels.
Italy has had no productive growth since 1999. Real GDP per person is smaller than it was at the turn of the century.
That’s almost two decades of economic stagnation. By any measure, the Italian economy is in a deep depression. And things will probably get much worse.
It’s no surprise Italians are in a revolutionary mood…
The Five Star Movement (M5S) is Italy’s new populist political party. It’s anti-globalist, anti-euro, and vehemently anti-establishment. It doesn’t neatly fall into the left–right political paradigm.
M5S has become the most popular political party in Italy. It blames the country’s chronic lack of growth on the euro currency. A large plurality of Italians agrees.
M5S has promised to hold a vote to leave the euro and reinstate Italy’s old currency, the lira, as soon as it’s in power. That could be very soon.
Given the chance, Italians probably would vote to return to the lira. If that happens, it would awaken a monetary volcano.
The Financial Times recently put it this way:
An Italian exit from the single currency would trigger the total collapse of the eurozone within a very short period.
It would probably lead to the most violent economic shock in history, dwarfing the Lehman Brothers bankruptcy in 2008 and the 1929 Wall Street crash.
If the FT is even partially right, it means a stock market crash of historic proportions could be imminent. It could devastate anyone with a brokerage account.
Here’s how it could all happen…
On December 4, Italian Prime Minister Matteo Renzi’s current pro-EU government is holding a referendum on changing Italy’s constitution.