So of all the leaders in the world, I am chagrined to say that the only one talking any sense right now is the former Prime Minister of Italy, Silvio Berlusconi. He’s self-interested, of course. Even as he was pushed out in Italy, he was plotting a comeback. And that comeback rests on making the new Prime Minister, Mario Monti, look bad, setting himself up as an alternative. But he’s doing so by giving what happens to be precisely the correct advice:
This is your hot weekend reading: Former Italian PM Silvio Berlusconi has done an exit interview with newspaper Corriere [...]
But the most interesting line is this one, from the Google Translated version:
We asked the government’s commitment to become a promoter of transformation in Europe ECB guarantor of last resort in the euro area, as are the central banks against the dollar, sterling and yen. Without this decision not only the euro is at risk, but all the European countries will experience sooner or later the hard way the effects of speculation.
Yes, this is what must happen. The only way out for Europe is for the ECB to start acting like a central bank. In this case, that means becoming a lender of last resort, rather than holding back out of fear of losing “credibility” on inflation. Further, Berlusconi is right that all of Europe is at risk from the ECB’s inaction. There is no way for other countries to avoid peril if they cannot manage their own currency. Right now the ECB is acting only in the interests of maybe Germany, although by impoverishing all of the countries who buy their goods, Germany is slowly strangling its own economy, so maybe I shouldn’t even add that caveat. They’re really acting on behalf of wealthy interests who, for one reason or another, don’t want to see any inflation.
The point is that the euro has no backstop right now, and the markets are acting accordingly. Silvio Berlusconi, heaven help us, gets this. So of course, he’s the one that the “technocrats” had to depose.
Of course, it’s at least somewhat likely that the banksters will crash the economy again regardless of the ECB’s actions. So there’s that.