italy maserati gran turismo luxury
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In December 2006, the ECB established the HFSC network of survey specialists, statisticians, and economists from its own ranks, national central banks of the Eurozone, and statistical institutes. The acronym stood for Household Finance and Consumption Survey.

It would collect “micro-level structural information” on household wealth. A massive bureaucratic undertaking. Surveys went out in 2010. Results are now ready. No one in Europe had ever done a survey on that scale before.
And no one might ever do it again. Because, in the era of bailouts and wealth-transfers, the results are so explosive that the Bundesbank is keeping its report secret—and word has leaked out why.
The surveys were conducted on a national basis, with each central bank publishing its own report. They would then be combined and summarized by the ECB into a cohesive picture of how wealthy—or how poor—people in various parts of the Eurozone were. A number of countries already published their reports, including Italy and Austria.
What the Austrian National Bank found was not pretty (20-page PDF). The considerable wealth in Austria was very unevenly distributed. The wealthiest 5% owned nearly half of the country’s wealth. Their median wealth was €1.7 million in diversified assets. The lower 50% owned only 4% of the country’s wealth. Of them, 83% rented their homes. Their median wealth was a measly €11,000 consisting usually of a car and a savings account. That’s half of the people! And 10% had a net wealth of less than €1,000.
This unequal distribution of wealth created a huge gap between median income (half the people earned more, the other half less) of €76,000 and average income of €265,000 (pushed up by a small number of extremely wealthy households). And that’s why some countries don’t even publish average income values. Too much truth would hurt.
Germany’s data is likely to be similar—but the Bundesbank is treating its report like a secret. Because the results are, let’s say, awkward for two reasons.
The highly unequal distribution of wealth is one of them. The German government already went through wild gyrations late last year, and now again, over its Poverty Report that exposed some inconvenient facts that were then edited out—something that was leaked immediately, and it caused a ruckus [read.... Censored: Poverty Report in Germany].
Italy is the other issue. But it may be too hot for the Bundesbank to touch. Italy’s report (142-page PDF) finds that median household net wealth has increased 56% since 1991. And from 2008 to 2010, it increased by about 5% annually, despite the crisis!
But the wealth of German households stagnated during much of that time while they paid taxes out of their noses. And now they might learn that Italy’s median household wealth is €163,875—while Germany’s is closer to Austria’s, around €76,000. Less than half!
“Politically explosive,” sources at the Bundesbank whispered to the FAZ.
These reports show that in some countries, like Italy, where government finances have been in crisis, median household wealth is actually greater than in some financially healthy countries where governments have kept deficits and debts down.
Germany’s federal government only had a minuscule deficit in 2012. But high taxes and the citizens’ greater willingness to pay them—though cheating is a national sport—have over the years extracted a lot of wealth from the people and transferred it to the government. In Italy, people have been more adept at hanging on to their wealth. To the detriment of government finances. Other studies have shown similar trends, but never on such a scale with such detail, and in this “harmonized” and easily comparable manner.
It could stir up a firestorm in Germany. It’s not just jealousy. Strung-out German taxpayers would have to be bamboozled into bailing out the mountain of Italian government debt that the Italians, whose median wealth is twice that of Germans, refused to pay for. It won’t sit well. Not at all. It could become a political nightmare for Chancellor Angela Merkel, who faces an election in a few months and must keep any kind of tumult out of the scenery.
If the report ever sees the light of the day in unvarnished form—not a certainty given the debacle of the Poverty Report—Bundesbank statisticians will be trying to explain away the difference between countries like Italy and Germany. Household wealth is particularly high in countries with high homeownership rates, they will argue. In countries where renting is popular, like Germany, a considerable part of the housing stock is owned by the government and rented out in a subsidized manner. Thus the wealth is public, etc. etc. Because the bailout saga must go on. The messy reality that Germans can’t afford to bail out their richer neighbors must not be allowed to interfere with the grand and glorious saga of the euro.
Every country in the Eurozone has its own collection of big fat lies that politicians and eurocrats have served up in order to make the euro and the subsequent bailouts or austerity measures less unappetizing. Here are some from the German point of view..... Ten Big Fat Lies To Keep The Euro Dream Alive.


Does Italy bolt from the Eurozone ? 



http://hat4uk.wordpress.com/2013/03/09/the-saturday-essay-why-italys-gold-could-change-everything/

THE SATURDAY ESSAY: Why Italy’s gold could change everything

Italy is about to break ranks in Europe. They could easily do the same on Zirp
boot
There’s an excellent piece by Ambrose Evans-Pritchard at the Telegraph websiteat the moment. It explains how the blame-game between China and the US is being ratcheted up, and most importantly how Politburos are in the same Premier League of can-kicking as Congresses and Parliaments. Basically, the global ‘economy’ is being kept going by funny-money, the banking system by taxpayers, and the Chinese ‘growth’ by subsidies fuelled from the trade surpluses. Leaving aside this Ponzi-meets-grand larceny arrangement, one day very soon there will be no way to stop a ubiquitous driving down of currency values: push will come to shove, then shove will come to punch, then punch will come to gun. What happens between China and Japan now could be Germany and us within two years. Don’t smile: we’re nearer to it than you think. Say ‘Schäuble’ a few times to yourself each day.
Part of the madness is this curious inability to look up from the drop-handlebars that have for some reason been fitted to the world’s econo-fiscal three-square-wheeled bike. We push currency values down/ so that Western consumers can only afford cheap Asian crap/ so the West’s trade-gap just keeps on getting wider and its debt mountain higher/ so the Chinese retaliate by spending more surpluses on more export-price subsidies/ so the trade gap widens again and the debt gets bigger and…..ad nauseam et infinitum.
I wouldn’t hold your collective breath waiting for sanity to prevail. Rather, the process will come to an end because a left-field event or seven forces the maniacs out of office. The best example of this at the minute is unquestionably the Iberia-to-Italy truculence that has taken off bigtime. I’ve been talking to friends and opinion formers over the ten days since I last suggested that Ben Bernanke & the Troikanauts do not rule the world, and cannot keep interest rates at Zirp levels forever. I have to fess up here and say I’m pretty much alone in this view, but anyway here comes another go. Let’s look at how the Italian situation is likely to pan out.
‘Pan’ is the operative word there, because that’s where Italy is descending at an accelerating speed. Equally significant however is that a majority of its political leaders are finally getting through to the People that there is absolutely no point to austerity, and that for pretty much everyone in the long-term, debt forgiveness and/or default is the only practical answer. Yes, I know the damage this is going to do to bondholders and pension providers and banks, but what’s your idea – we just carry on putting monetary infrastructure before people? We continue the race to the currency bottom?
Let’s suppose that Italy won’t play the austerity game any more. Let’s suppose it reneges on its debt, and starts to pull out of the euro just about the same time as some CDU backbench arse-licker starts mouthing off about chucking them out. All confidence in Italian debt disappears overnight….and then the markets adapt. They take the weekend to think about it, and by Tuesday the guys at Goldman are already costing out ways to lend profitably to Italy. But to attract them in, the margins will have to be very attractive indeed…..and with such an epidemic of charred fingers everywhere, the medium is unlikely to be bonds.
Once out of the eurozone, the Italians can ignore what the ECB says about interest rates. The country is broke, and the economy needs seed capital. All they now have to do is make the guarantee of eventual payback stand up.
Not many people know this, but Italy has the fourth largest horde of gold reserves in the world.
Its gold holdings, which account for 66.5% of its foreign reserves, amount to 2,451.8 tonnes of gold. Italy’s holdings, in fact are only a smidgin behind those of France.
Now let’s say the top Italian finance blokes still on the safe side of their office windows decide to go not for the bond markets, but direct to wealth funds and mega-rich investors with an unparalleled deal: a sliding scale of interest – starting at 2.7% – paid monthly depending on size of deposit, with the entire investment being backed by gold held elsewhere in escrow.
I think this would probably have the following immediate effects:
1. Clever product design sells, and greed buys. Within a week, the Italian Treasury would be full to bursting.
2. At least one other European country would follow suit.
3. Italian banks would start lending to business again: at highish rates of interest, but to far more confident borrowers.
4. The value of gold would head for the stratosphere.
5. The US stock markets would drop equally dramatically, and negate anything QE could afford to manipulate.
6. The US Federal Reserve would become actually rather than just technically insolvent.
7. The value of the lira would sky-rocket.
8. The Americans would sell every ingot in Fort Knox to depress gold’s price, and very probably they could apply pressure to other central banks to do the same.
9. With a rising currency and a falling gold price, Italy could keep on buying it, and back more and more investment products.
10. The eurozone would collapse – an event made inevitable when the Germans pull out and start backing their investment range with gold too.
Washington might at this point consider nuking the European continent, but even the Special Relationship would be put under pressure from that one. In turn, the entire global banking system would collapse under the weight of bad debt…except in those countries following the Italian model. America would default. China would be left whistling for its money. Australia would go broke too.
Then and only then – perhaps – would the political, commercial and banking classes be forced to accept that the old system was dead, and the new one wasn’t going to do anyone outside the boot of Italy any good at all. (A hundred other socio-political earthquakes would be in play by then anyway).
Now the most common raspberry blown at this scenario is that Italy’s gold reserves are nowhere near enough to pay for the bailout it needs. But there are two obvious flaws in that thinking:
1. Italy wouldn’t need a bailout, because Italy would default and start again.
2. The Italian gold reserves are worth, at today’s prices, around $102billion. Nobody ever heard of leveraging? Tim Geithner spent most of last year trying to persuade Europe that it could be worth two to three trillion. Like every guarantee in finance, the amount available for guarantee would be exceeded. Nobody would care. And over time, if even only part of my scenario played out, the Italian government could keep on buying more gold.
Nothing is ever quite that straightforward, of course. Pretty early on in this mission, the world – prodded by a large Fed stick – would band together and sequester Italy’s gold reserves. But that wouldn’t hold either if by that stage Spain (and perhaps even India) were doing the same thing. And it is highly likely that, quite early on with gold prices soaring, the Chinese would be attracted to the idea of simply getting richer and richer via its reserves…especially with the Americans selling theirs.
I am only making a general point here, and it’s this: Canute knew he couldn’t reverse the waves, and Bernanke – somewhere behind that anally clipped beard – knows he can’t stop an eventual interest rise somewhere. He’s just praying (like everyone else) that things won’t reach that stage. But they must, and they will.


Deconstructing what happened .....