- Despite economic tailwinds and a massive bond buying program by the ECB, Italy hasn’t been able to even dent its debt/GDP ratio.
- When the ECB ends its bond buying program and/or economic tailwinds turn and the new government embarks on fiscal largess, things will turn pretty rapidly.
- The eurozone framework makes the situation that much worse, activating potentially three vicious cycle at once with the potential for things to spiral out of control.
Source: 3 Vicious Cycles Threatening To Blow Up Financial Markets | Seeking Alpha