Hey Folk
This Friday Britain decision to be in or out of EU.
So what if it is out. My analysis as follow
There are surely effect if Britain leave EU, probably that explain the
sluggish performance of the England team as the players are very worried of their
future.
So what would happen?
1)
The bank of England have assess the long term economic consequences of
Briexit, it is a loss of 3000 to 5000 pound annually per household for the next
5 years before Britain settle down.
2)
The pound will surely depreciate very quickly. I think it would drop
about 15% to more than 20% from current price. Which will bring the pound to be
almost the same value as the Euro. That’s mean joining Euro despite out of EU. However
one can argue that a devaluation will be helpful for the economy, but these
effect now is less significant than what happen in 1992.
3)
The Bank of England do not have the ‘necessary ammunition’ to reduce
interest rates as rates are low. I think there is very little the monetary policy
can be done for these.
4)
Trading condition now have changed so devaluation of currency might not
help England at all as compare what happen in 1992. This is mainly due to
regulation and cross border issues.
However the reasons, people are driven by emotion at times rather than
logical deduction. That why the other side of the Atlantic Ocean ban immigrants
is a good idea and people likes it so much.
I do agree this is a golden opportunity to make a lot of money, or lose a
lot of money. Like how Georges Soros broke the Bank of England in 1992. But
according to him the planning, analysis and execution take 10 years.
Anyway it goes good luck to everyone.
Cheer
