How to get the better of instability in the markets

The upheaval in the international markets that concerns above all the sale of the European countries’ State bonds, are due to two main factors. They are aggressive American rivalry in the search for people to underwrite its own public debt and the awareness of the increase in risks linked to European bonds, with the consequent reduction of their value in share portfolios.

To get the better of this instability and to curb the unjustified sale of government stock, their risk profile must be reduced and subscription to them rendered more attractive through clear prospects of economic recovery. Growth is the only element that permanently guarantees the reduction of public debt and the ability to underwrite it.

Projects for economic growth at this specific moment must be based on the real and competitive support of employment, thanks to the best use of the resources available in every individual country. Employment security is based on the consolidation of domestic production, which must also be competitive if it is not to penalize consumers with protective measures.

In order to achieve this objective resources are needed for investment and to fund a more aggressive growth. Such resources are available. They are savings, which must be protected and turned to account by channeling them into projects that strengthen the national economy and employment and which, consequently, increase the value of the savings themselves.

However, savings today seem to be seen as one of the many resources for solving contingent problems in the short-term. Instead, they are not a resource like other resources. They cannot easily be replenished, indeed, they are somewhat similar to oil whose reserves are running out and must therefore be used with caution, limiting waste. However, unlike what happens in the energy sector, savings cannot rely on alternative sources. We must therefore stop seeing them as a lemon to be squeezed and value them instead as a good to be preserved and increased.

Savings today are the target of heavy taxation on the income they produce and are subject to further fiscal charges when they are invested and when income is created. They are also secretly taxed even when their remuneration does not cover the inflation rate and are threatened when, in the search of returns at all costs, they are channeled into dangerous investments. Yet the greatest risk, that of extinction, is incurred by savings when they are directed to supporting consumption, that is, when their purchasing power is transformed into obligatory purchasing (only in Italy, in the last 25 years, has the rate of savings on income earned fallen from 27 to 5 percent).

Savings are therefore a precious raw material and a competitive advantage to be used in the best possible way: to encourage development, growth and employment. They must not be considered as a obligatory guarantee of the debts contracted by States but rather as a guarantee of autonomy and of the independence of the family that has made them. This same family which, in generating children and in raising them, creates a value for society, also producing investments and consumption. The family is basically the primary driving force of true and stable economic growth, that will absorb the debt and stabilize the markets.