... "See EU later"!
Apparently they barely squeaked out a vote to leave the European Union. From what I've been able to tell they wanted to leave mainly because:
1) They were paying out a LOT of money to the Union and getting very little in return.
2) They were being told how their borders would be controlled and they didn't have any say on who was allowed to come and go.
Sounds like two good reasons to me.
The good news for the USA (where I live) is that the drop in the exchange rate is probably going to make it more affordable to make a trip to London with the family in the next few years. I was there on business about 8 years ago and loved it and have really wanted to go back with the loved ones. At the time the exchange rate was about 2 to 1 so everything was twice as much there as it was here. Not good for a vacation spot.
52% leave, 48% remain, indicating that 48% of voters in the UK fell for the fear mongering campaign.
In the end, it was all about a choice between UK sovereignty or being tied to obedience to a HUGE unelected bureaucracy in Brussels. Brits have just very, very wisely unchained themselves from a sinking ship that could never have worked in the long run due to the way it was designed. For it to work, every nation within it would have been, among other things, absolutely required to give up fiscal budget sovereignty. This was pointed out as one of the fatal flaws at the inception of the union by those who have since been proven to be so very correct.
Two possible paths are ahead - either a slow, deep decline of the EU into a severe basket case like Japan, now being kept from a catastrophic, self reinforcing economic collapse spiral by insane central bank monetary tricks. One of those tricks.:
How the Bank of Japan Now Owns 90% of the Top 10 Nikkei Stocks (BOJ)
https://www.investopedia.com/articl...-bank-japan-now-owns-90-top-10-stocks-boj.asp
OR a huge FX or bond market (both VASTLY larger markets than mere equity [stock] markets) collapse caused by some unknown trigger event (as Lehman was). The banks of mainland Europe, especially Germany, are far more leveraged than were the U.S. banks before the global financial crisis which was never really sustainably fixed, just papered over with central bank monetary tricks,
now for the first time worldwide.
Don't even get me started on China's massive, insurmountable problems... Their growth
greatly helped to rescue the world during the last financial crisis. This time,
they're more likely to trigger one.
The entire world has finally reached "peak debt." All fiat money is created from thin air solely through the issuance of new debt. When that money is created, the money to pay the
INTEREST on that money is
NOT created. In order to create that extra money, economic growth and the issuance of
MORE debt is required.
Any growth of debt or an economy at a certain percent rate
is necessarily an exponential one and the slope of that curve will get increasingly steep over time, reaching a point where the needed economic growth rate and growth rate in debt is not possible. That's the oversimplified, but ball park explanation. That's where were at,
worldwide in all of the developed economies.
How did we get here? Simple. The
essential Darwinian force in TRUE Capitalism called "bankruptcy" has not been allowed for DECADES for those who, through their own stupid, greedy actions,
deserved to fail. Instead, they were rescued at the expense of everyone via trillions in Congressional deficit spending and via monetary manipulations of the cartel of 12 private banks called the Federal Reserve (which is NOT a "federal" agency by the usual definition, BTW).
This creates the "too big to fail" moral hazard which gives speculators no incentive to act responsibly since they know they'll be bailed out if they fail. Heads they win, tails you lose. Even the now proven to be "ivory tower idiot" Alan Greenspan has said, and I'll paraphrase, "Too big to fail is too big to allow to exist in a Capitalist system." And, yet, due to the powers that be's failure to make the
economically painful but correct choices, here we are.
Bankruptcies
FLUSH DEBT from the system,
resetting the slope of the debt curve to a more manageable one. (note that effect in the graph below). Bankruptcies haven't been allowed for the big guys because we don't have true free market capitalism at the macro levels, we have crony capitalism which shouldn't even be called "capitalism." It should be called "corporatism."
Notice anything very out of the ordinary with the blue line (Fed-set interest rate) in the graph below? Rates are being held at near zero for a length of time far beyond anything ever before seen in the hopes of kickstarting the sort of economic growth
that simply can't be started due to peak debt, maintaining instead only near stagnation:
This brilliant Brit comedy skit from years ago is still 100% correct in the intuitive points it makes. The EU debt crisis that was so much in the news back then has only been papered over by government deficit spending and central bank monetary tricks which will only make the eventual,
inevitable catastrophic day of reckoning
or the
depth of a slow deep decline even worse.:
[video=youtube;I5QwKEwo4Bc]https://www.youtube.com/watch?v=I5QwKEwo4Bc[/video]
Oh, yeah, here's an example of the sort of accuracy you can expect from the ivory tower PhD idiots in charge, locked into a religious belief in their simplistic garbage economic theory and the models based upon it being used to centrally plan the economies of the world, locked to their garbage theory due to something called "theory induced blindness" and the fact that governments and banks still love it because that theory tells them what they
WANT to here - that you can
BORROW your way to prosperity while not having to make any hard choices.:
And here's news that's very hard to find other than on a RUSSIAN news organ site. Wonder why? I only found it via an economic news concentrator site:
Switzerland withdraws longstanding application to join EU - 16 Jun 16
https://www.rt.com/news/346884-switzerland-eu-membership-application-rejected/
"Hannes Germann, also representing Schaffhausen, highlighted the symbolic importance of the vote, comparing it to Icelands decision to drop its membership bid in 2015."
BTW, the country which will come out on top in all of this? The U.S. of A. Trust me.
