Winter is coming, so does a long politico-economic wave


The views expressed below are solely those of the author.

Maurizio Giuliani is an Italy-based Financial Advisor. He founded M. Giuliani & Co., an investment advisory firm, in 1994 in Torino. Giuliani is a seasoned expert in world and Europe's macro-finance.

Winter is coming, so does a long politico-economic wave. The political elections in 2017 could change the face of the old continent. The advantage we have had so far from Brexit and President-elect Donald Trump, was to a considerable lowering of tone towards Russia. The appointment of General James Mattis, nicknamed “Mad Dog” and an excellent strategic thinker, allows to balance perfectly the enthusiastic inspiration of Trump for his soon-to-be counterpart Vladimir Putin. Mattis sees in fact, “as it should be,” Russia as a strategic enemy.

So if on the one hand the tones of the armed conflict between NATO and Russia seem to have calmed down, on the other hand remain fiscal imbalances that are unlikely to be filled. The global debt amount does not allow healthy growth, in spite of interest rates to levels close to zero, the economies are no longer able to generate sustainable growth. The debt deflation has infected the world. There is “rumor” according to which the major central banks led by the IMF or the BIS, could cancel the debt of their respective countries; however, this solution should be taken after a new and deep financial crisis.

Of course, this choice will have to be “one off”. To avoid the problem of hyperinflation, they are planning to hook the new fiat currency to a commodity (gold standard) or possibly the blockchain (digital standard). And from where will start the next big financial crisis? Probably from the Italian banking system: how will Italy manage to save the banks with a public debt that amounts to 133% of GDP? How can it intervene in conflict with EU directives?

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