The UK won, the EU lost
The UK did the right thing; they extracted themselves from a failed globalist experiment. As of today the future is brighter for all UK citizens. Though we mustn’t run ahead to far, there are still a whole bunch of things that have to happen, and still other things that could happen. The unintended consequences and blowback from this vote could disrupt globalism in a variety of ways from weakening regional blocks, to inspiring pride and nationalism.
Article 50 of the EU membership agreement requires a lengthy 2 year process to cut ties and return to square one. The sooner the UK declares their intention to initiate Article 50 the sooner the process can be concluded. However, between now and then we can expect repeated efforts to renegotiate a deal between the UK and the EU in order to stimulate a 2nd vote on leaving in hopes the sweetened pot will cause the UK to pause Article 50 activities and reenter the failed globalist experiment.
For today, for now, the story is about market contagion, volatility, discounting new information, and watching the globalists around the world panic while trying to tell the world; nothing to see here, all is well, we got this.
As expected, given the dominance of algorithms and high frequency trading controlling all market asset prices, wrapped up by a globalized financial system, volatility has gone parabolic around the world; particularly with the British Pound Sterling (GBP), the Euro, and fixed income prices.
That the Nikkei in Japan is sharply down because the UK voted to leave the EU makes no rational sense. The size of the UK economy and the market reaction do not match. Fundamental analysis is not part of the picture right now. The loser in this vote is the EU. The winner is the UK and the GBP. Take this massive sell off in the GBP against the U.S. dollar and the Euro as an opportunity to get long Sterling.
There has been lamenting by the poorly informed global celebrities and the one-percenters about the poor youth in the UK losing out with this vote. The reality is the youth in the UK were just given a life-line. The prospects for greater prosperity for them have just been improved. Of course, it is hard for them to see it now because for those in the UK under the age of 35 have all been taught from the first grade that globalism is the savior of the world, the key to peace for all mankind, and what is best for them.
It has all been a lie, and enough people have finally caught on.
June 23, 2016, UK Independence Day.