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Foreign Investment: Profit from Italy’s election

Posted April 23, 2008

“All this would make you think Italy was a basket case, except for one fact.” — Martin Hutchinson

by Martin Hutchinson

Baltimore – (TFN): Italian elections have traditionally been confusing, with one weak center-left coalition government replacing another. But the election held on April 13-14 was unusual for Italy, as it produced a clear result. What’s more, that result gave a majority to the center-right government of Silvio Berlusconi.

Berlusconi, a media billionaire, is pro-U.S. and strongly pro-capitalist. While the forces preventing free-market reform in Italy are extremely strong, he should at least be able to make some improvement in Italy’s economic position, with consequent benefit to the local stock market. While sensible investors have in the past avoided Italy, with Berlusconi in office, it might be worth taking another look.

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He “Retired” at 43… But He’s Still Making People Rich

The last few months have been treacherous ones for investors. Oil has spiked. The housing market has rolled over. A stubborn credit crunch has induced fears of recession. And most stock market investors have taken it on the chin.

But not all . . .

One small group of traders has been able to use the recent volatility to take advantage of elite international stocks researched and recommended by Oxford Club Investment Director Alexander Green. For example, while stock market averages both here and abroad have slumped, his new service is still generating double and triple-digit gains.

Learn more…

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There’s no doubt that Italy has some weaknesses. By European standards, it is fairly corrupt, ranking 41st on Transparency International’s Corruption Perceptions Index, below the other major European countries (but above such investor magnets as China and India).

Italy has a budget deficit of 3% of GDP, with too much government spending at 50% of GDP, and far too much government debt at 105% of GDP. The country had relatively slow economic growth of 1.9% in 2007.

Foreign Investment: Italy isn’t in decline

The home to Rome also has a declining population - not in itself a problem, but since its social security system is generous it creates difficulties in funding Italy’s pension system. It has suffered badly in the past few years from expensive government and expensive labor costs, particularly as it is a member of the euro, which has almost doubled in value against the dollar since 2002.

All this would make you think Italy was a basket case, except for one fact… Read on to learn more.

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Posted by Martin Hutchinson · Filed Under International Investing 

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