Italy Wobbles

Italy has wobbled, she hasn't fallen but the currency and bond traders are watching and they know she wobbled.  If you listen carefully you will hear the sound of knives being sharpened.  There is a killing to be made.  

The power of the currency markets should not be under estimated.  Almost twenty years ago on 16 September 1992 (commonly referred to as Black Wednesday) Britain was unable to keep sterling above its agreed lower exchange limit measured against a basket of European currencies.  The British government were therefore forced to withdraw the pound sterling from the European Exchange Rate Mechanism (ERM). But only after HM Treasury had spent £27bn of reserves trying to avoid the inevitable withdrawal.  In just a few days George Soros, the most high profile of the currency market investors, made over 1 billion US dollars in profit by short selling sterling. The German government after first agreeing to help sterling failed to give the promised support. 
Taking on the combined wealth of all the euro zone economies will not be as easy as taking on the pound sterling but the euro has a fatal flaw and is badly wounded.  The markets are powerful, greedy and merciless, they will be patient and wait for the right moment but sooner or later they will strike; it will not be a pretty sight.

Best Wishes
Will