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Old November 22, 2011, 01:35 PM   #1
Shotgun693
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Trouble In Italy?

I just read a post on the CAS Site. There is a rumor, just a rumor, that if the Italian economy collapses then it will be hard or impossible to get products, including guns from Italy. I would think that they'd want US Dollars but don't know for sure. Anyone have solid news or opinions on this?
Repeat, this is just a rumor.
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Old November 22, 2011, 02:11 PM   #2
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I suppose that it depends upon the financial state of the companies and how the government reacts to a potential collapse. If the companies are reliant upon financing for cash flow or capital growth, then I can see some significant problems. Also, depending upon how serious the situation gets, the raw material suppliers may demand payment up front instead of credit terms. The government could impose new taxes that would have the same effects, by limiting the amount of cash available for continuing operations.

It's not a unique situation to Italy - it's happened to a degree here in the US. Tight monetary policy makes it tough for businesses to grow. One thing in the Italian cowboy gunmakers' favor, I think, is that their market is outside of Italy, so it's quite a bit more secure than their domestic markets.

I don't think that Italy's "problem" is the need to get their hands on dollars. Despite the European financial troubles, the Euro is relatively stable. The problem is that there is so doggone much debt in relation to GDP that, dollars or Euros, their economy is on life support.

I should add two things: The European financial situation is a lot more complicated than the US situation because of the sovereignty of the various countries. Also, I'm an engineer, not an economist.
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Old November 22, 2011, 03:21 PM   #3
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And....

...The arms makers seem to be inclined to take care of their market. If they have the power to do so, I think we should be okay.
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Old November 22, 2011, 04:55 PM   #4
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They will be exporting the heck out of anything that brings in hard cash.

Just like the US. We are the largest weapon seller in the World. Brings in money, money that US politicians can't print, so it has value.

Consider exports as value added to an economy. The Italian politicians, unless they are stupider than American politicians, can understand that.

And American politicians are about as stupid as you can get.
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Old November 22, 2011, 10:32 PM   #5
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We spent $8500 on a new turret drive for one of our C axis lathes, money went to Italy where the turrets are made. Yeah, I feel kinda funny about this.
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Old November 22, 2011, 11:49 PM   #6
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I'm not sure how similar the circumstances are, but it kind of reminds me of the 1990s when many of the Spanish firearms companies went out of business (including Astra, Star, Llama, and CETME). Although, I think their bankruptcies were a result of the Asian recession that occurred during that time. But who knows?
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