the Government Bets on Savers. And what will you do?

One is coming new issue of BTP Italia starting next 6 March: does it make sense to invest?

Many are probably asking themselves this question and in today’s article we will try to give an answer.

Who there are all characteristics of the new tool, we will update the content in real time as we know all the details.

We come to ours analyses sui pro and on against general to invest in today BTP Italy.

Pros: why invest

In general, the main reason that pushes the investors to buy the BTPs is the relative safety instruments that can represent a relatively stable and secure alternative to other riskier or more complex financial products.

Furthermore, BTPs offer a predetermined return in the form of coupon, which is paid periodically and guarantees a certain level of income for the investor. This yield is generally higher than that offered by deposit accounts or other similar products.

Another advantage of BTPs is their simplicity. Compared to other financial instruments, such as i mutual funds or bank policies, BTPs are relatively easy to understand and do not require great knowledge of the financial market.

Furthermore, i BTp offer a predetermined maturity, at which the investor receives the invested capital, plus the interest paid through the coupons. This allows the investor to plan his long-term investment relatively precisely.

Finally, in the specific case of BTP Italythere will be one guaranteed coupon (we’ll find out on March 3) which could further motivate investors. The fact that there is a guaranteed minimum coupon could give savers a certain level of peace of mind who can count on a somewhat certain level of income even in a context of decreasing interest rates in the medium term.

Cons: why not invest

While BTPs can offer advantages such as relative security and simplicity of instruments, there are also several disadvantages to consider before investing.

In particular, BTPs are subject to fluctuations on the secondary market which can lead to important losses, especially if the investor does not have a solid knowledge of the financial market. In addition, inflation-linked securities lose value when inflation falls, and since inflation is subject to change, this represents an additional risk for investors.

In particular, it is important to consider that the bait used to encourage investments in BTPs is inflation hedging, but we must know (and hope) that high inflation can last for a limited period of time given that Central Banks they are activated precisely to make it decrease. If double-digit inflation persists for a decade, Italy may find it difficult to pay its debts and repay the capital invested.

Is the government “rooting” for Italian savers?

Since its establishment, at least in words, the Meloni government is encouraging the purchase of BTPs by Italian citizens, arguing that this would help the country to be independent from speculation international.

According to the government’s reasoning, attracting i Italian savers in a time of economic uncertainty it is possible by promising them an attractive coupon with zero risk.

However, this strategy ofdebt sovereignty” hides a trap which could be risky for investors.

To understand the potential risk, it is important to note that Italy’s public debt is unsustainable for several reasons, such as excessive pension spending relative to GDP, the demographic crisis and wasteful public administration. This means that the government needs to restructure the debt itself and has a free hand to do so.

However, Italian governments do not have a good track record for handling public money, which could cause concerns among investors.

The important question to ask, therefore, is: is our country worthy of credit?

In other words, would you give credit to a country that wants to “have a free hand” with respect to international creditors?

Since the debt, in the “sovereign” hypothesis, would be entirely in the hands of the Italians, any debt restructuring would be easier and could include coupon cuts, deferments or reductions on the amounts to be repaid to creditors. In essence, the risk of buying BTPs in this context could be greater than Italian savers believe.

Definitely, buy BTPs right now it may seem like an attractive option, especially to the less experienced, but it’s important consider the potential risks before deciding to invest your own money.

Think about it…that’s your money!