roaminblue
Well-Known Member
- Joined
- 27 Apr 2008
- Messages
- 2,991
The FX market is definitely feeling the pressures of the potential brexit. You're right that its uncertainty, but it is very much the uncertainty of brexit. The pound is depreciated against lots of major currencies, enough to offer an insight into the thoughts of real money and other investors. Lets not forget an outvote is just the start. Then we enter negotiation phase, its not obvious that there will be upward pressures on the pound during a protracted negotiation period.
For me, enough researchers, economists, investors and alike are suggesting brexit will pose real risks to the UK government. Say what you will about them, they're not stupid, they're probably not even as vested as other commentators as they will continue to operate regardless. Players in the FX market would probably welcome a disintegration of the euro, so the fact that there are voices in that market warning against is enough to pay attention. I think Moody's even came out and said they'd consider a negative on the UK credit rating further down the line.
This whole talk about the in campaign being scaremongers is disingenuous in my opinion. The out campaign do nothing but scare monger over refugees, immigration, loss of control. its cognitive dissonance. We have no control over what our politicians do, and the legislation they pass, we just like to think we do.
For me this whole topic boils down to matters much more important than immigration (something which will continue unabated, regardless). Its about the continuing trend to regional trading blocs. The biggest powers in the world, the USA, Russia, China, are all powerhouses. Huge gdps, huge populations, huge opportunity for industries. The EU can offer the same. Look at bodies such as the IMF, NATO, the UN, all have a great deal of clout because they are many voices, hopefully, pulling in one direction. Globalisation is a truly irresistible force, and it would, in my opinion, be madness to isolate ourselves from this. If we had ever taken the EU seriously, we could have a serious voice at the table and could shape it from within, on our own there is no hope.
honestly, even if we cut our ties with europe, we obviously would still want access to the market. Which will mean ceding some elements of sovereignty, to me its not obvious why we would want to do this without being able to steer.
Further, Europe has made great strides to facilitate peace across a traditionally warlike region. Some say its not due to the EU, some say the EU played a part, but whatever you think, being intrinsically tied with our closest neighbours offers greater security in general, than not being. Sure maybe mistakes were made during the recent refugee crisis, but a part being an active part of the EU means we can develop closer ties and prevent these issues from happening again. Further, the EU with britain is stronger than without, so on a certain level, we can offer a great deal more to the rest of europe and help to steer it closer to where we think it should be. It really should be asked, but why are the likes of Putin keen for brexit, whereas those such as Obama are not. We can help build the type of eurozone we want as a part of it, and I firmly believe we should do. If the EU weakens, it is bad for the UK in a lot of ways, the EU will have less weight. Sancitons on Russia, helping to draft a nuclear agreement with Iran, it could all potentially affect us in terms of economics and security.
I know people like to hark on about trade, and I do believe they have valid points. However, last time I checked our trade surplus was with germany, not the remaining member states. If memory serves, and it may well not, we rely a great deal on trade from the EU and account for what, 10/20% of total EU exports, or similar? Someone can confirm I am sure. But even if we had a surplus, people show a glaring disregard for both sides of the economic equilibrium. If we are buying more from the EU than we sell, this doesn't necessarily put us in a better bargaining spot. For one, input costs could rise. How does that filter down through a company's structure? It may very well result in cost cutting. What gets cut first? Staff. How many SMEs buy obtain input products from the relatively low cost eu? What happens if they become more expensive, can that company even operate. I strongly believe that tarrifs will rise, I think its pretty fair to say the EU will continue to try and prop itself up. This may simply result in more industry in the EU as they fill the expected void from a reduction in exports to the UK. I do think people underestimate how strong the EU is at negotiating trade agreements. Its a no brainer for a lot of countries. negotiate with the EU, one legislation to cover 27 countries. Great.
That said, I'm wearily omniscient over the whole thing. i think most politicians know the direction the globe is heading, and what we need to do/be/offer in order to be a part of it.