The ECB’s Putsch?
Quite aside from the compelling view of the Italian money supply that led me to this article, I was actually fascinated by this article in the Telegraph. It points out that the prevailing view in the media is that pressure from bond yields was what forced out Papandreau in Greece and Berlusconi in Italy. However, the market for Italian and Greek bonds have basically locked up, with nobody other than the ECB willing to buy. Therefore, the spike in Italian bond yields that drove out Berlusconi was something that happened with at least the passive consent of the ECB. They could have prevented it through more aggressive buying.
In other words, the ECB may or may not be deliberately manipulating the bond market in order to (peacefully) depose the democratically elected leadership of Southern Europe, but it certainly looks like that’s happening. The ECB is playing with fire here.