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Durudarshan - Investment Analysis

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The Brexit vote will not change things for about 2-1/2 years

Posted on July 3, 2016 at 4:56 PM Comments comments (53)
Although the majority by over a million people voted for Britain to Leave the European Union, the verdict was almost split, half the Kingdom voting to Remain, and half to Leave.  Moreover, London voted by 60 percent to stay, as did Scotland by an overwhelming majority (and in all constituency seats) to Remain, as did Northern Ireland. 

That leaves a mixed picture for the new Prime Minister to weigh up carefully and consider the implications before triggering the famous Article 50.  Now everyone knows that the Brexit vote will mean only the British peoples' declaration that they wish to separate from the European Union, but that separation won't even commence until the Article 50 is triggered.....and it will take another two years from such time until a final resolution can be agreed and achieved. 

Amicable separation, and what would be the terms and conditions?  That is something the U.K. parliamentarians will have to discuss and chew, and debate and propose the changes the people would seek.  Also, it will be upto the European Union Ministers in Brussels to throw up counter arguments, and will be a mildly heavy two years plus before some sense can be made of the issue.

Until such time, it will be at best possible for the British government to muddle through, anticipating and conjecturing on the final outcome, and how it will affect the rest of our days. 

In the meantime, until a new Prime Minister is selected by the Conservative Party, and thereafter the Prime Minister decides in consultation with the Civil Service as to when it would be prudent to trigger Article 50, the whole matter can only be considered to be in abeyance, pending that decision.

Is it a given that in the meantime, trading can continue as previously between U.K. and the other 27 European Union nations?  Will the same tariff free arrangements apply?  Can the citizens travel freely without visas to the different nations in the Union, or will there be visa requirements? 

Is Denmark pulling out its £150 billion investments in U.K. - or will it only take that decision once the famous Article 50 is triggered?


The vast majority of the British people seem adamant on one thing.  They would not like to see unrestricted, controlled immigration to the U.K.  The open door policy harboured by the E.U. has to be closed.  The U.K. feels pretty full, and there aren't the additional spare resources to feed, house, clothe, school or provide medicine for any more, the services are already stretched.  However, in view of the increasing number of older people in the country, they will allow selective immigration to fill certain jobs, based on a points and quota system.  People seeking an easy life on free resources provided by the state are definitely gone, and now in an effort to balance the national budget, funding is being reduced wherever possible.

Also, a bone of contention is the £8.5 billion 'Club fee' that Britain pays to the European Union.  This may be used in providing a few 'cushy jobs' for the Eurocrats, but the people in the deprived and neglected areas of England and Wales who overwhelmingly voted to Leave, don't see the value of it.
The £8.5 Billion could provide over half a million reasonably paid jobs each year, restoring services which have been reduced, and creating a new line of workers.   

They would much prefer this £8.5 billion per annum to be kept here in the U.K. and spent on funding the NHS, schools, and restoring things like library services, lights on the streets, community centres, provision for youngsters to do some creative activities instead of a delinquent life, etc.  It would also open up a lot of disused factories, shops on the High Street, and create local jobs.  In these hard times, it seems a practical choice - in these times when the rest of the U.K. economy seems to be improving all the time, some of these areas seem to be left behind.  Predominately they happen to be Labour dominated areas, so I believe it will be up to the Labour Party Leader to demand answers from the government as to why they have been so neglected.  The Labour Party M.P.s who sit on the Opposition benches must pull up their socks, and question why they have not queried these matters; and if they did, why have they been ignored and the growth of their areas neglected.  It is now obvious to everyone that there is huge potential for growth in these areas, and amicably the government must focus on this as a matter of national priority. 

If that becomes a real possibility, the European nations I estimate may wish to keep their investments in the U.K., for further appreciation.   And with the current 85 Billion Euros a month E.C.B. Stimulus, this could augur a period of further growth and continuation of the worldwide economic Recovery in this region.  If my assumptions are correct, it seems a very rosy picture for Europe in the near future.

Let me know your views, I shall be pleased to hear from readers as usual.

Kind regards,

Durudarshan


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