United Kingdom (UK) citizens should vote to leave the European Union (EU) on Thursday when they go to the polls for the BREXIT vote.
Up until last Thursday the leave vote had been steadily gaining in the polls and increasingly looking like victory was theirs. However, after the cold-blooded daylight murder of a Member of Parliament, Jo Cox, by a man openly revealing a preference for leaving the EU, polls have turned and the lead held by the leave camp has dwindled.
As horrible as the murder was it should not be cause for judging the costs and benefits of the UK remaining a member of the EU. For more than 40 years UK citizens, excluding the top 5%, have known this was a bad deal for them. The UK has lost their independence in terms of regulatory oversight, foreign affairs, cash flows, border control, budgeting, and the protecting individual freedoms.
This isn’t the first time the UK has considered not playing along. Though each time they tried in the past some event always occurred as votes approached to sway, affirm, and harden the stay vote.
Strangely, PM Cameron, part of the scare team to persuade the UK to stay in the EU, was the man who called for the referendum in February and started this whole debate in a lame attempt to gain leverage over the EU Bureaucrats in Brussels in order to gain greater freedoms and control for the UK over the UK. He must regret that move every day.
There have been economic benefits for the UK from being part of the EU, though those benefits have accrued mostly to the financial sector, global manufactures, global dirty money billionaires, the globe-trotting elite, and the political class. Otherwise, as most citizens can clearly see today, the costs accrue to a much larger population and are damaging the whole economy. Immigration, trade, failing politicians, too much regulation, worsening education outcomes, uncontrolled borders, and a nanny state expanding uncontrollably from Brussels have all come to darken the economic and financial outlook for tens of millions across the British Isles.
There is risk to leaving, though the UK won’t sink into the North Sea. The citizens will still want to eat, and shelter themselves and cloth themselves, and travel, and be entertained, and everything else they do today. While not a huge economy, it is still the 5th largest in the world home to one of the world’s greatest cities; London.
Apart from short-term financial market turmoil, and heated responses from globalists about the fallout of the leave vote victory, the UK will be fine. In time it will be stronger.
If the leave vote wins it will represent the first meaningful setback to the forces of globalization since it was released upon an unsuspecting world in the 1970’s. Like citizens from the U.S., Canada, Australia, and other countries in the EU, UK citizens have come to recognize globalization is failing. The costs far outweigh the benefits. The evidence is there for all to see now in the gutted manufacturing landscape, massive public and private debt, falling wages, a decline in the number and quality of jobs available, a bleaker outlook, and controls on their actions and speech.
For those involved in financial markets and public policy Thursday will be an exciting day one way or another. If the stay vote wins, market reactions will be more muted, but if the leave vote wins, strap in and put your helmet on. On the front lines will be the British Pound, the Gilt market (bonds), the FTSE (stocks), and the Euro. Though, given the globalized financial system existing today, all driven by black box algorithms with not dissimilar correlation functions, all asset prices will be moving in all markets.
While the vote concludes Thursday a leave win wouldn’t mean an exit the next day. It is expected to take up to two years to negotiate the exit of the UK from the EU.
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