To our friends in the UK...

[Fox]

What's it like on this June 24th, 2016 in the UK with the news out that the "yays" have it for the Brexit

[neoJaguar]

I don't even know what all this is about.. I should probably read up on it.

[Fox]

The UK voted to leave the European Union today. I'm curious as to what the overall reaction is over there.

[Marcel]

Oh,crap!

Frexit next?

[Guest]

or Gerexit?

 

I too am wondering how this will all play out. I know I read or heard recently, that financial collapse would result "because" of the EU. Whoever wrote or said that is likely using Greece and Spain as examples to back the statement. (NOTE: I really don't like "because" as it infers cause and effect. In this case, it is difficult to determine cause and effect)

 

I'm NOT an economist, but know one here. It would be great if she weighed in.

[Guest]

I'm NOT an economist, but know one here. It would be great if she weighed in.

 

Since you asked.

 

I don't think one can directly attribute the European debt crisis to the EU as an economic institution. The United States had similar problems (bubble bursts; assets drop, liabilities stay the same) and was not part of the EU. During the early to mid 2000's global savings was up, as borne out by massive increases in fixed-income securities. Investors and policies makers had money signs in their eyes with predictably calamitous results. What is true is that interconnected economies, industries, financial institutions rise and fall together but at different rates. Even during strong economic times, if your euro gets more mileage in Germany than in Greece, why would you spend it in Greece? You wouldn't, at least not on a macro level.

 

As for Brexit; I don't really know. Nobody really knows, therein lies the problem. The markets didn't expect it to happen and had no time to prepare. All of the volatility we are seeing unfold now is short run adjustment. Investors are more inclined to hold on to their money which will cause "dips" in the value of financial assets and exchange rates. Non-financialized industries (which is to say those that deal in hard goods and services, as apposed to financial vehicles) seem to be doing business as usual more or less. As ever the value of gold will go up because of doubt about how the value of X currency will maintain (although US T-bonds are selling at lower interest rates indicating that global investor may lean on the dollar, the US may offer a liquidity program as well). In the long term it is really really really hard to say. I caution everyone against believing what the talking heads speculate. In two years time this could amount to nothing, or it could amount to everything. It is all guess work at this point. At best we can say that it will be a little while before global investors are willing to put money into the UK.

 

TL DR: Sell your gold now and buy it back later.

[Guest]

Thanks Foxy! I knew you could explain the "ins and outs" of Brexit.

[Marcel]

I don't even know what all this is about.. I should probably read up on it.

 

http://www.bbc.com/news/uk-politics-32810887

[Fox]

One newsfeed that I read said that Scotland might now try to break up from the UK. As for any other countries leaving the EU, I think a lot of it is speculation so far. But the fact that their second largest economy left doesn't look good for the EU in general.

Edited June 25, 2016 by Guest

[ozfurlova]

Unfortunately, the economic implications were the most important yet were least thought of by most voters (especially if the demographic voting I've read is correct).

 

Knowing a good many Brits from each of the British states, the underlying movement was two main issues - immigration and domestic economics. Whether it be from the steady influx of Eastern European migrants or more recently Syrian refugees, it doesn't take too long for that topic to raise with any expat who returns home briefly. Working in an industry with very deep and important links to the UK, you can imagine the number of British expats I encounter daily - I've truly lost count of the amount of times I've head "I can't believe how many more immigrants are around now". Beyond the xenophobia or racism one could associate with that, it doesn't help that the UK is one of the physically smallest countries in the UK yet gets some of the greatest number of migrants from all over the world. At some point in time, it'll get full and that's something that most of the over 55's worry about most. The sad part about that is they're the demographic that won't be around in 20 years time to "reap the benefit" of no more open borders

 

Staying on the topic of migration, the events of Germany in recent times of gangs of allegedly newly arrived muslim migrants in Germany committing vile sexual assaults on women (e.g. this past New Years Eve in Cologne) has stirred up an underlying fear amongst most of the European countries, the UK included. By being part of the EU immigration policy, there are some people in the UK that may feel they're vulnerable to similar undesirables arriving and perhaps understandably don't want them without at least having the opportunity to conduct some sort of background checks. With Syrian refugees landing in either Greece or Turkey first, the door to any EU country virtually opens to them (I'm incredibly simplifying this so please don't take me task with details I've left out purely in the interests of not boring people).

 

Then finally there's the own domestic issues which have been stirred recently, perhaps assisted with radical political parties like UKIP. An issue to raise of late is the under-funding of the NHS - the publicly-funded health system of the UK. The Leave Campaign seized upon that issue pointing out that the UK sends £350 million to the EU each week and how much better that funding would be being sent to the NHS instead (let's not mind the fact that the real figure is actually smaller than that). For the average person that doesn't have much of a clue on the UK domestic or EU economy, it wouldn't take much conviction to decide where'd you prefer "your" money to be sent. Over the weeks, there's been similar claims made yet both the major political parties did a terrible job of allaying fears or making corrections to some statements - perhaps a good case of a political party failing it's constituents and it may yet cost the leader of the Labour party his job due to a non-confidence motion placed against him by his own party members. Certainly if a Scottish succession movement starts up all over again as well as a far possibility of a unified Ireland pop up, it's going to place even more pressure on all members of parliament to perform the best they can - the consequences are incredibly dire if they don't.

 

On the brighter side, the UK is the 5th largest economy in the world as it stands now and was still a world economic powerhouse well before the EU or EEC were ever dreamt up. As Foxy pointed out, no-one can tell the immediate effects or ramifications right now (not least because the EU divorce proceedings take 2 years to settle) but we're not talking about a country already reliant upon EU funding as a good % currently are or a country that doesn't have the economic and business intelligence to weather a storm like this. They'll get through it but it won't be a walk in the park

[chloelovesfur]

Still wearing furs in the uk x (:

[neoJaguar]

Still wearing furs in the uk x (:

 

isn't that the most important part though?

[alphonso]

Hi.

 

The mood here in the UK is brittle. The wall to wall, non-stop media coverage does not help. Anyone with any sense is keeping their cards close to their chest.

 

I voted out for democracy. People are incredibly naive to believe that their rights will be upheld by the un-elected. For me this trumps all of the other issues.

 

If the EU advances unchecked then in the long term its direction is more 'Soviet Union' than 'United States'.

 

The European Commission is more corrupt than FIFA. Did you know they have had no accounts audited for at least ten years, would you trust these people with your money? I have a good friend whose career was at the European Commission and the United Nations aid programs and a family member who lived and worked in Brussels for 5 years. This is what the younger voters cannot see. They don't have the necessary life experience.

 

I feel it was a shame that the media have chosen to focus on the rallying flag of immigration. It is an easy sell for the newspapers.

 

My concern now is that I fear our politicians are out of their depth.

 

Up the furs!

[Fox]

Thank you for this. This is basically what I was looking for, what it's like "on the ground" right now. I'd love to hear of the experiences from any other UK members here if we have more.

[alphonso]

A week has passed now and I think that most people are agreeing to get along. Day to day activity is much the same. Prices are expected to increase in the coming weeks and business is uncertain. Early days.

[Marcel]

Do many people think it would be like it was, before you joined EU?

[Marcel]

Boris Johnson is out and Zlatan is in.