Don't worry, the GBP is still plummeting, we might get a worldwide depression yet. From which humanity will come out with a new emperor whose visage is at once both shocking and indescribable.
Looks like it's stabilising
That's probably because it's the weekend, the markets are closed and almost no one is trading. If it were to appear to stabilize on a weekday that would be a good sign. But even if it was to do so it won't change what's happening right now.
What is happening right now (or rather what will be happening on Monday because our financial system is so insane economic collapse breaks for the weekend) is that a whole mess of economic partnerships and contracts between companies inside the UK and outside the UK are being ended. Such things take a bit of time, effort and negotiation. Not all companies are willing to invest that time and effort just yet But as the GBP falls more and more they will see staying connected as too much of a risk. As more companies cut ties the GBP will fall more.
The British Finance industry as a whole is great reason for doom and gloom. It provides £41bn in taxes a year by itself. (for reference the entire British military budget is £40bn) Britain prior to the Brexit vote was the largest financial country in the world. (Yes the brits beat the Swiss in that regard) In fact Britain is where a large number of sovereign countries keep their current accounts as it makes dealing with European companies, governments and financial institutions far easier. Another reason to pick Britain was that it had a strong reputation as both an economically stable place as well as a politically stable one and in Finance reputation matters more than fact. That reputation is gone now. Most if not all the reasons Britain became a finance giant look to be stripped away with it's European exit. All those companies and countries that have accounts and ties with British institutions will be looking to move away. However as before moving that much money away requires negotiation and takes time. They aren't all going to vanish at once until we're looking at full blown financial collapse.
But I'm worried, I'd go as far to say I'm scared. Banks only hold so much money and it's usually much less than is in the accounts they hold because of how they make money. These big banks and institutions will slowly bleed accounts and clients until it becomes clear that they are going down. At which point we'll probably have a run on the banks, except this time it won't be the banks holding personal accounts and dealing out housing loans it'll be the banks handling the cash for multinational corporations and governments the world over that'll get hit. In short it'll be the banks that bailed out the banks in the housing crisis that will be hit hardest. Harder than they have ever been hit before.
Do I blame the leave voters for this? Honestly just a little, many seemed to ignore the economic implications but then not everyone is that versed in or spends much time thinking of economics. However I feel the lion's share of the blame lies at the feet of the UK government. If some one
anyone had a plan things wouldn't be as bad. In fact financial collapse could be mitigated if not stopped outright if the UK government comes out with a clear, concise plan. It's still early, it's still at the point before things are irreversible. It doesn't even need to be a very good plan. It just needs to convince investors that they have some idea of what's coming in the future. But I do not have high hopes right now that they will.
So yeah, buy gold.
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Topic: Brexit! Conversation Continued (Read 192782 times)