What do Brexit’s opposition, President Obama, Prime Minister Cameron and the European Union Elite have in common along with the British Treasury, the International Monetary Fund, the Organization for Economic Cooperation and Development? They all are using hyperbolic, exaggerated paranoid economic forecasts of doom and gloom pitched with great arm waving and volume. Those supporting the British Isles leaving the European Union are equally voluminous and strident. There are entire lists of arguments favoring each side as well as dire predictions of horrific disasters with which to attack each side. So, where is the reality which a sane and measured approach of scientific study would support? The sad truth is that no such rational and unemotional report has actually been released and for good reason, leaving the European Union is a completely unprecedented occurrence. The best thing we can do in approaching Brexit is to simply add another opinion which in reality is not that different from every other opinion out there, the best we can reason out and then we will wait and see what happens should the vote go the way we would advise, but we so not expect to influence too many Brits as the other thing that has been polled is that the populace is divided mostly by age and everybody has chosen and are unlikely to compromise on their assumptions. The older generations, possibly because they remember the pre-European Union Britain, favor Brexit while those who have lived entirely as members of the European Union do not support rocking the boat. Perhaps it does break down to whether you lived in a period when Britain was not just another national entity lost within the folds and bureaucracy known as the European Union.
The one thing which the British have done which would facilitate their leaving the European Union much more easily than most other European Union nations is the British kept the Pound Sterling as well as accepted the Euro. This may prove to be one of the smartest decisions the British have ever made as eventually, whether it is next month or not all that far into the future of humankind when the European Union finally tears itself apart as the economic strains of retaining Greece, Italy, Spain, France, Poland and Germany as a single economic union while continuing to allow each of the aforementioned nations to rule themselves and make their own economic decisions within some unenforced presumed limitations which would have made minimal difference anyway. So, there will come a time when Britain will be leaving the European Union or the European Union will be leaving Britain along with every other member nation as it melts down from economic hemorrhage. The one thing which is easy to predict is what will happen if Brexit is voted down next month, nothing, absolutely nothing as the entire world will continue with possibly a slight amount of sighs in Brussels and a few perplexed looks from some of the financial wizards across Europe and in the United States as all their studies and predictions of the perils that Brexit will entail.
Pound Sterling
The question which needs examination is what will happen should Brexit pass. The only honest answer is that we have no idea, none at all. President Obama has predicted that should Brexit pass that Britain will lose out in every manner especially in trade with other nations. President Obama threatened that Brexit passing will necessarily place the British at the back of the line in trade with the United States. The President did not explain why this condition would come to pass; he just claimed that would be the result. Perhaps somebody should inform President Obama that first he cannot place anybody at the back of a line which does not exist and unless he was going to place trade sanctions on the British, there was nothing preventing their trade continuing with the United States without suffering any change as membership with the European Union has little effect on United States trade with Britain. The trade between the two nations would simply revert to the same manner as before Britain joined the European Union. Sure there would likely be some legislation passing through the Congress and being sent to the President reverting some of the trade regulations clarifying trade relations but even that would likely be more a reassurance than any drastic alteration such as what President Obama threatened. Even should President Obama veto such legislation, it could be readdressed come January 21 immediately after the new President is sworn in and it is doubtful that whomever should be in the White House would make any difference as such legislation is fairly innocuous and there would be little reason outside obstinacy for a veto.
That will not prevent us from offering our point of view. The immediate advantage the British would gain is they would no longer be constrained by the monetary policies of the European Union and the Euro. The British have had the advantage in setting some form of monetary policy free of European Union regulations as they did maintain their old currency, the Pound (we love the old term of Pound Sterling as it sounds so provincial and proud). The British also have their natural relations with the Anglosphere nations of New Zealand, Australia, Canada, United States and a few other more minor English speaking nations. Such a natural set of trading partners being made simpler by a common language grants Britain an easier transition should Brexit pass and they be free to trade under their own desires free of European Union constraints. Further, the British economy would no longer be having some of their resources diverted to support those nations which are in financial meltdown which is causing an ever more serious crisis one after another. Despite the economic restructuring and presumed limitations placed on spending pressed upon those nations suffering economic difficulties ranging from slow economic growth after the 2008 worldwide financial meltdown which began with market collapse in real estate and mortgage collapse due to lax lending standards which were dependent upon rising real estate prices to complete financial freefall such as the collapse in Greece, these nations often ignored these limitations regarding them as impinging on their national pride and being so draconian that they prevent their addressing the economic needs to climb out of their difficulties. Whatever the reasoning, the strain these failing economies place on the productive nations is slowly strangling their monetary gains, threatening to drag them down the same drain with the financially crippled nations. This could be the main reason for the appeal to many British and the reason that establishment supporters of the European Union desire to persuade the defeat of Brexit as they fear an even faster decline of the European Union should the British economy be removed from the sum total of the European Union economy.
What those who have as their desire the continued existence of the European Union fear most is Brexit passing as they are completely aware that Brexit would be the first and far from the last nation to exit the European Union. The reality is well known, once Britain leaves the European Union the writing is on the walls in Brussels, the end is nigh. How much longer would France or Germany remain should the British economy become positive and surging forward with a bright future becoming apparent? The answer is not long, weeks, months, but definitely not years. As the European Union is seen as the best stalwart against another ruinous European war and the only manner where the continent of Europe can fairly compete with the United States, China, Brazil, India and any other up and coming economic powers; the European Union core believers are of the mind that only as a unit does the European nations have any hope of competing with any form of equality with the far larger economies and simply larger nations which have the advantage that size brings. The European Union members see their union as the enabler of trade advantages and refuse to see that they are simply another layer of regulatory strangulation and further taxation depriving the nations and some companies from greater profits. They claim that without the European Union such companies as Airbus could never have been created and survived as it was the European Union which allowed the separate nations to work as if a single unit. The reality is that the nations would cooperate as doing so increases their financial strength and in this world of information technology the old differences and impediments which often strangled trade with tariffs and protectionism would not return as the new reality so obviously rewards cooperation between nations and so many of the corporations are now international in nature that nations no longer benefit from such measures. That is the reality and the British remember the freedom of pre-European Union Britain and with any luck, they will be able to reason and influence those without such experience and Brexit will pass and strike a mortal blow to the European Union.
Counter to what numerous economists claim, and luckily this is not a universal opinion, the European Union is not the answer to the problems faced by the troubled economies such as Greece, Italy and Spain but rather the result of the Economic Union and its common currency, the Euro. Whether Brexit passes inflicting a mortal wound to the European Union or if we need wait for the European Union to reach its inevitable implosion, the individual nations reverting to their natural independent currencies will initially cause some difficulties but will soon be able to alter their currencies in relation to one another and thus permit the struggling nations to have a devalued currency permitting them to have economic advantages of lower manufacturing costs and thus an economic advantage that accompanies such. That will bring a new vitality which is impossible when they must share an equal cost rate against Germany as the two nations are as different as night and day. Greece and the other struggling nations are closer to an agrarian or light industrial base while Germany is a heavily industrialized and entered the information age and has robotic manufacturing in many industries making a similar currency preposterous in the max. Brexit may just be the key to freeing Europe from Brussels and the self-appointed crowned aristocracy which has placed themselves over a continent for far too long and have reached well past the point where they have gone from a unifying and strengthening of the continent to a detractor which now regulates Europe slowly into a stagnation which was unavoidable as the simple fact that the European Union was an unelected oligarchy which thought itself above the people and not for or of the people and saw the people and individual governments and the nations as merely pawns in their social and economic games and misadventures. There may never be a study done which will find exactly when the European Union went from a path for greater economic growth and strength to a drag upon the continent and a guarantee of a slow but inevitable decline as the bureaucracy grew to the point that it became a ponderous beached whale no longer capable of reacting to financial needs and instead squelching any vibrancy making responding to changing economic forecasts next to impossible. The European Union has gone from a force for European economic cooperation to a farce siphoning off an ever increasing price dampening economic activity.
Beyond the Cusp
Beyond the Cusp 