The Next Domino Falls As Predicted… Here’s What Comes Next
by Nick Giambruno via InternationalMan.com,
ZeroHedge.com
Dec 8, 2016
The next domino has fallen…
I recently spent several weeks in Italy, taking the pulse of the country. The Italian referendum on December 4 turned out exactly how I predicted it would.
The “No” vote won in a landslide, with 59% of the vote versus 41% for “Yes,” with a 70% turnout.
The pro-EU Prime Minister promptly announced his resignation after the crushing defeat.
A surging populist party waits in the wings. They’re now likely a matter of months away from taking power and then holding a new referendum on whether Italy should dump the euro and go back to the lira.
If that happens, Italians will likely vote to leave.
Without Italy, the euro currency would likely disintegrate. Without the euro, the whole European Union—the world’s largest economy—would likely come unglued.
Italy’s referendum is likely just the first of many dominos to fall.
Here are the ones that will come next…
A Banking Crisis
The Italian banking system is a mile-high house of cards.
It’s looking wobblier every day.
The triumph of the “No” side will also accelerate the crises in the Italian banking system, which was already on the verge of collapse.
The collapse now appears imminent. It could start as soon as this weekend.
Banca Monte dei Paschi di Siena (BMPS) will likely be the spark that sets it off.
BMPS—Italy’s third-largest and most troubled bank—is likely to announce in the coming days whether it has successfully raised enough capital to remain solvent. My view is that this would be highly unlikely.
If the capital raising efforts fail, there’s only one way to keep BMPS—and the entire Italian banking system—from collapsing… a bail-in.
A bail-in would have a catalyzing effect, like political nitroglycerin. If and when it happens, expect support for anti-euro Italian populist parties to skyrocket.
The Super Bubble in Italian Government Bonds Will Burst
The Rest…HERE
