An unlikely pair? Absolutely not. The new Prime Minister of Italy, Mario Monti, is a thin, no smiles, tough number. Impeccable manners and grooming, but don’t let that fool you. He stopped Germany from financing its central bank and forced France to give up its government owned electricity cartel, selling it to private hands. If he hangs on, Italy may well become solvent, and especially if it sells the nationalized industries which were taken over by communist, socialistic governments decades ago, and which are run unprofitably…to put it mildly.
Italians have a huge private wealth of 8.6 trillion euros, and low private and household debt. The private Italian wealth, makes them actually richer than Germans or Americans. It also has a small budget surplus, but the debt of 2.6 trillion euros is what horrifies everyone. Maybe all is not as bad as is publicized. If Monti can copy Margaret Thatcher, he may pull it off handsomely. The Italian government owns 4% of huge oil giant EMI, 31% of ENEL utility company, 33% of aerospace group Finmeccanica, and 100% of Post Italiane. Sell them off and pay the debt?
Now Consider Margaret Thatcher. As soon as she took office, income taxes were cut. She refused all pressure to inflate by printing money, and it gave her great pleasure, when 364 ’economists’ wrote to the Times, denouncing her policies. She re-shuffled the cabinet that her predecessor had, and within a few months, all of them were gone. The “U Turn” of Margaret Thatcher, got rid of the post World War disease of socialism, state intervention, debauched currency, weakened incentives, and overly powerful trade unions. She removed legal immunities which protected the coal mining unions, and the resultant strike lasted a year. That year long coal miners strike, crippled the hard left union leadership, and employee missed union days fell from 29.5 million to 1.9 million after the strike was settled, which was a disaster for the unions. That strike was also responsible for the closing of dozens of coal mines, as is shown in a biased way in that wonderful movie, “Brassed Off.” ( A good rental if you like music!)
When she took office, inflation was 27% and when she left, it was 2.5%. She argued that inflation was a disease of money that could be cured by controlling the growth of the money supply alone, and of course she was correct. She declared that the state should not be running British businesses and led the world in ’privatization.’ She sold off airlines, airports, utilities, telephone and oil companies to the private sector. These companies had been nationalized by previous labor governments, run terribly, and had run the British debt to the heavens. She was quoted as saying, “We made Britain strong in defense, we reduced the power of trade unions, and we cut taxes so that the people could keep more of what they earn. And if people keep more of what they earn, they earn more.”
Italy might well be copying Maggie Thatcher if Mario has his way, and wouldn’t it be nice if America did the same thing? America is copying Greece, Spain, Portugal, and Italy, almost to the letter, and it spells death to us, like is did to them. The big difference is that they have a common currency, the euro, and like dominoes, if one or two fail, they can take the whole system of the euro with them. Our dollar is the world’s reserve currency, but this can only protect us for a limited time. Our credit rating has already been taken down a notch, and we must get ourselves under economic control, which is the object of the Tea Party, which controls the House of Representatives, and which has thrown a monkey wrench into most of the Democrat-Obama plan. The health bill passed by one vote, remember? It’s less than a year from the all important election, which can hopefully restore economic sanity to America. protect yourself, and support the Tea Party.
P.S. gold and silver are building a huge base from which to rise in price, not value. When prices go up, values of goods don’t change. A pair of pants 50 years ago at $5 and today at $50 are the same pants! Only change is in the value or purchasing power of the money used to purchase the items. Gold is the same thing now as it was at $20.67, 80 years ago in 1931. Only the dollar has lost value. See why we constantly harp on NOT SAVING EXCESS ASSETS IN DOLLARS? Save them in gold and silver, whose prices, like all other prices will continue to go up in un-backed monopoly type dollars.