Yesterday’s first round contest for the new Conservative leader duly skittled 3 of the candidates whose supporters will now add their votes among the remaining 7 next week. Meanwhile further stories about one or more of the 7 are rumoured to be splashed in the weekend press. GBP rangebound depending on rhetoric from the Boris Johnson team.
Oil prices firmed on the back of 2 ships suffering attacks in the Straits of Hormuz through which 20% of global oil supplies pass. WTI rose $1.61 to $52.75 yesterday morning. Germany issued 10yr Government Bonds at yet another record low of minus 0.24%.
Italy and the Italian Job: a not so cunning plan to circumvent EU rules imposed by Brussels
Each member of the EURO is prohibited legally from issuing new currency as they have all signed up for the EURO. Italy’s government coalition is seriously looking to issue low denomination non-interest bearing Treasury Bills called Mini BOTs which will circulate along with EUROS as a parallel currency.
The argument goes that Italy needs more money to give a boost to the economy and the tax increases and spending cuts insisted on by the EU are unbearable. So the plan is for Italy to issue Mini BOTs and take them back as payment for say taxes or train tickets which would boost liquidity but crucially not expand the official money supply-and there is nothing that the EU can do about it.
This is very dangerous as this parallel currency will damage the integrity of the EURO. What this apparently dry economic description implies for the EURO is nothing short of calamitous and as a maximum could lead to Italy leaving the EURO.
A case of the Italians stealing from …..the Italians.
Kleindienst + Moldova = A Dubai home plus EU Citizenship
Kleindienst is a Dubai real estate developer; Moldova is not in the EU but enjoys visa free access to 121 countries including the EU for its current 3 million citizens.
So anyone (and that means anyone) with 5 million Dirhams or GBP 1 million can buy a Dubai home and Kleindienst will thoughtfully(?) pay the EUR 135,000 investment and fee to those helpful Moldova officials who will immediately spring with Moldovan citizenship and all the EU privileges that accompany it for the applicant.
So a case of buy one Dubai home and get one quasi EU citizenship free. A variation on a Bentley parked in the driveway of a new dream home and…..cheaper.
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – European Central Banks
Humphrey Percy
Fri 15 Sep 2023
European Central Banks Going in to the final few hours before the ECB announcement and press conference on interest rates, the expectation was for a rise of 25BPs to 4% which is the highest level since the inception of the EUR in 1999. The market was poised to send the EUR lower whether the decision […]
Morning Brief – EURUSD lifeline?
Charles Porter
Tue 12 Sep 2023
EURUSD lifeline? Contrary to where market consensus would have read EURUSD at the start of the year, the currency pair has failed to find support as it grinds ever lower. The recent peak of 1.12 was short lived and largely macroeconomic factors have swiftly and confidently forced the Euro-Dollar currency pair to retreat. The causality […]
Morning Brief – Buoyant vessels
Charles Porter
Tue 5 Sep 2023
Buoyant vessels If loose lips sink ships, then the monetary policy institutions of the European Central Bank, Bank of England and Federal Reserve should be firmly afloat. Despite the President of the ECB speaking yesterday in London, there are still very few clues available about what lies in store for the European monetary authority’s September […]
