The Collapse Of Italys Banks Threatens To Plunge The European Financial System Into ChaosBy Michael Snyder So what makes Italy so important? Well, we all saw how difficult it was for the rest of Europe to come up with a plan to rescue Greece. But Greece is relatively small they only have the 44th largest economy in the world. The Italian economy is far larger. Italy has the 8th largest economy in the world, and their government debt-to-GDP ratio is currently sitting at about 132 percent. There is no way that Europe has the resources or the ability to handle a full meltdown of the Italian financial system. Unfortunately, that is precisely what is happening. Italian banks are absolutely drowning in non-performing loans, andas Jeffrey Moore has noted, this potentially represents the greatest threat to the worlds already burdened financial system Shares of Italys largest financial institutions have plummeted in the opening months of 2016 as piles of bad debt on their balance sheets become too high to ignore. Amid all of the risks facing EU members in 2016, the risk of contagion from Italys troubled banks poses the greatest threat to the worlds already burdened financial system. At the core of the issue is the concerning level of Non-Performing Loans (NPLs) on banks books, with estimates ranging from 17% to 21% of total lending. This amounts to approximately 200 billion of NPLs, or 12% of Italys GDP. Moreover, in some cases, bad loans make up an alarming 30% of individual banks balance sheets. Things have already gotten so bad that the European Central Bank is now monitoring liquidity levels at Monte dei Paschi and Carige on a daily basis. The following comes from Reuters The European Central Bank is checking liquidity levels at a number of Italian banks, including Banca Carige and Monte dei Paschi di Siena, on a daily basis, two sources close to the matter said on Monday. Italian banking shares have fallen sharply since the start of the year amid market concerns about some 360 billion euros of bad loans on their books and weak capital levels. The ECB has been putting pressure on several Italian banks to improve their capital position. The regulator can decide to monitor liquidity levels at any bank it supervises on a weekly or daily basis if it has any concern about deposits or funding. A run on the big Italian banks has already begun. Italians have already been quietly pulling billions of euros out of the banking system, and if these banks continue to crumble this stealth run could quickly become a stampede. And of course panic in Italy would quickly spread to other financially troubled members of the eurozone such as Spain, Portugal, Greece and France. Here is some additional analysis from Jeffrey Moore A deteriorating financial crisis in Italy could risk repercussions across the EU exponentially greater than those spurred by Greece. The ripple effects of market turmoil and the potential for dangerous precedents being set by EU authorities in panicked response to that turmoil, could ignite yet more latent financial vulnerabilities in fragile EU members such as Spain and Portugal. Unfortunately, most Americans are completely blinded to what is going on in the rest of the world because stocks in the U.S. have had a really good run for the past couple of weeks. Headlines are declaring that the risk of a new recession has passed and that the crisis is over. Meanwhile, South America is plunging into a full-blown depression, the Italian banking system is melting down, global manufacturing numbers are the worst that we have seen since the last recession, and global trade is absolutely imploding. Other than that, things are pretty good. Seriously, it is absolutely critical that we dont allow ourselves to be fooled by every little wave of momentum in the stock market. It is a fact that sales and profits for U.S. corporations are declining. This is a trend that began all the way back in mid-2014 and that has accelerated during the early stages of 2016. The following comes fromWolf Richter Total US business sales not just sales by SP 500 companies but also sales by small caps and all other businesses, even those that are not publicly traded peaked in July 2014 at $1.365 trillion, according to the Census Bureau. By December 2015, total business sales were down 4.6% from that peak. A bad 18 months for sales! Theyre back where theyd first been in January 2013! Sales by SP 500 companies dropped 3.8% in 2015, according to FactSet, the worst year since the Financial Crisis. I know that a lot of people have been eagerly anticipating a complete and total global economic collapse for a long time, and many of them just want to get it over with. Well, the truth is that nobody should want to see what is coming. Personally, I rejoice for every extra day, week or month we are given. Every extra day is another day to prepare, and every extra day is another day to enjoy the extremely comfortable standard of living that our debt-fueled prosperity has produced for us. Most Americans have absolutely no idea how spoiled we really are. Even just fifty years ago, life was so much harder in this country. If we had to go back and live the way that Americans did 100 or 150 years ago, there are very few of us that would be able to successfully do that. So enjoy the remaining days of debt-fueled prosperity while you still can, because great change is coming, and it is going to be extremely bitter for most of the population. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. Everything is working just fine The EU socialism and UNs socialistic Agenda21/Agenda2030/ sustainability/social, economic and environmental justice are the culprits here. Socialism, a.k.a. communism doesnt work. Just ask the former USSR, China, N Korea, Cuba, half of S C America (Argentina, Brazil, Venezuela and others) and half of Asia and Africa. The hard core Karl Marx followers have been at this since the 1880s. The One World Order, predicted for over 100 years, is upon us. Its time to defeat it, once and for all. Oh,this will p*ss off the Muslims.Europe is supposed to fully support them.You cant do it if they are broke.Watch the violence increase. I dont trust Micheal Snyder he pretends to be rational but if you go to his site it becomes clear that he is actually a rabid christian who relies on bible prophecy and deletes any comments that dont support Israel. Mentioning the Talmud instantly gets any comment deleted. He and his posse of commenters are strictly christian zionists. I have zero respect for such people. All zentral banks the world over should fail. Iceland got it right the rest of the world needs to start the same clearing. The fall of the nwo will start the thousand years of peace. 