Italy's horse of a different color

  et dimítte nobis débita nostra There has been in the past month or so a renewed attention to words said by important Italian political figure, most notably Mr. Sassoli , the current President of the European Parliament,  and more recently Mr. Fraccaro , who is a notable figure in the present Italian government.  After their words, or as a poetic Italian phrase says, " Vóce del sén fuggita" , a lot of commentators have rightly pointed out the absurdity of the idea. For a good cut on that, in Italian, there was an article by my friends Luciano Capone e Carlo Stagnaro, that you can find here .  What they did not provide, given that space is at a premium on a national paper, is a framework about WHY  Italy beats anyone else at producing AND ADVANCING TO HIGH OFFICE such outstanding human material.... and keeping it there even after they opened their mouth. So, I think I should give an explanation about why those words did not appreciably increase my heartbeat, things that non

  NEVER do an after action report   How on Earth did we end up with negative rates? Simple, by avoiding as much as possible any “wargaming” of economic predicaments.   Thanks to a friend, Marc Udeschini,  for starting my down this rabbit hole. He asked: " Is a period of hot inflation the likely path forward?". That got me thinking, not so much about the future as about  the past.  After all, one of the high point in my life was meeting a person who was a "high priest" in insurance since the 60ies. I won't name him because he passed away and he was quite prominent, but after the meeting we talked a little, liked each other's way of thinking, and started REALLY talking. at some point, I asked him "Why do life policies carry a 4% minimum guaranteed return?". He told me that prior to the Yom Kippur oil crisis and the resulting inflation explosion, Insurance companies merely gathered assets by offering a fixed 4% return  against their name. Fast forwar

  Dude, where's my money? Why the attempt at suppressing the reward of dispossessing oneself (i.e., “Interest”) failed... and where has that money gone. It sometimes happens. You are tired, distracted, scared, nauseous.... and that's when it hits you, a different way of looking at things, some vantage point on reality you hadn't found before. A bit like being the point man of a patrol in enemy territory. In my case, the “Enemy territory” have been the financial markets. Mainly because of this: ECB total balance sheet (source: Bloomberg LP) Now all that Central bank liquidity, like a Tsunami hitting a shore, has wreaked havoc on price discovery which is (was, actually) the basis of the accumulation of wealth since time immemorial. Just to do a quick "back of the terracotta tablet" recap on why I think what's happening is way off the reservation, here is how I would explain “interest” to a very young niece at a wedding reception, where there