I didn’t give the initial election returns from Italy much significance because so little of the political game is actually not completely staged for our benefit.  But the more I read about Beppi Grillo and his Five Star Movement the more I’m paying attention to what’s going on.  Specifically that his:

goal was to do away with a system that had “disintegrated the country” and build “something new” that would restore Italy to a true participatory democracy. “We can change everything in the hands of respectable people, but the existing political class must be expelled immediately,” he said.

Now, that’s music to this libertarian’s ears but we’ve heard this before and no matter what happens anything beyond the control of those currently in power is usually subordinated and destroyed as a matter of existential survival.  If this man is able to truly shake up the apple cart of Italian politics and force a referendum vote on the Euro it could be the start of an anti-Euro backlash the envelops most of the continent.  At which point the rules of the game change entirely.

I don’t give that outcome very good odds of occurring but stranger things have happened in the past.  While I don’t believe in coincidences in politics the situation in Italy with their very casual attitude towards central governance is just weird enough that it could create real problems for the current economic power structure.  The implications for the Euro and the West are incalculable.  Watch Italian bond yields, especially the 10 year, very carefully.  The market is expecting chaos at this point.