This Super Bubble Is About to Burst… Here’s How to Make Huge Profits
Italian government bonds are in a super bubble.
They are primed to collapse soon.
Italy has one of the most indebted governments in the world. It’s borrowed over $2.4 trillion, and its debt-to-GDP ratio is north of 130%. (For comparison, the US debt-to-GDP ratio is 104%.)
But the situation is actually much worse.
GDP measures a country’s economic output. However, it’s highly misleading. Mainstream economists count government spending as a positive when calculating GDP. A more honest approach would count government spending as a big negative.
In Italy, government spending accounts for a whopping 50%-plus of GDP. A more accurate debt-to-GDP ratio would exclude government spending from economic output. I suspect that figure would reveal the Italian government’s hopeless insolvency.
I don’t see how it’s possible for the Italian government to extract enough in taxes from the productive part of the economy to ever pay back what it’s borrowed.
Yet Italian government bonds are trading near record-low yields.
It’s a bizarre and perverse situation.
Over a $1 trillion worth of Italian bonds actually have negative yields. That’s completely insane.
Given the huge risks associated with lending money to the bankrupt Italian government, the yields on Italian sovereign bonds should be near record highs, not record lows.
Source: Zero Hedge
Italian government bonds are, without a doubt, in super-bubble territory. It won’t be long before a pin pricks it and… pop.
A critical vote in Italy on December 4 could be that pin…
That’s why you need to act now. You may be exposed to this toxic financial waste without even knowing it.
My friend, mentor, and globetrotting colleague Doug Casey thinks the situation in Italy is just the beginning of a disaster much worse than the 2007–2009 global financial crisis.