Mutating Promises

We are less than one week away from the EU referendum, the moment when the British people will be called upon to make a historic decision – will they vote to “Brexit” or to “Bremain”? Both camps have been going at each other with fierce campaigns to tilt the vote in their direction, but according to the latest polls, with the “Leave” camp’s latest surge still within the margin of error, the outcome is too close to call.

 

corbyn, cameronThe battle lines are drawn….

 

It is a rare moment in history. The British haven’t had their say since they voted to join the European Community back in 1975. What was initially thought of as a project to unite Europe into one common market, with the benefits of free trade and great promises of increasing national wealth, has mutated into a completely different entity.

The British have, instead, found themselves being dragged into a regional economy of zero growth, a weak currency and heavily indebted states. You may have come across the arguments of both camps, but here we wish to address what a “Brexit” or “Bremain” scenario would mean for Britain.

 

If the UK Bremains…

If the British vote to “Bremain”, Britain will start to operate with a “special status” within the union, after Prime Minister David Cameron reportedly renegotiated Britain’s relationship with the EU, in anticipation of the referendum. Cameron tried to change some of the rules of the agreement, to address the concerns of the British public that made them favor a Brexit in the first place.

The matter of ‘sovereignty’ came first in the list of the most common anti-EU grievances, as the public felt the country no longer had a say in its own affairs, and was pressured to comply with EU regulations as part of the greater union. Cameron succeeded in having the UK released from any commitment to be politically integrated into the EU body, and there were talks about granting some autonomy and power to national parliaments, through the “red card mechanism” (i.e. if 55% of national parliaments object to one vote, they can block a proposal submitted by the European Commission).

This proposal, however, does not in any way alter the UK-EU relationship, while it is also unlikely to be practically enforced, much like the preexisting “yellow” card that has only been used twice so far. Thus, British autonomy, specifically, remains unaddressed.

When it comes to economic self-governance, Cameron got an explicit recognition that the Euro is not the single currency of the EU, and that the UK will not be pressured to contribute to euro zone bailouts. But what about the British economy itself? British businesses have long complained about losing competitiveness. In general, the EU single market makes it easier to move money and products and grants businesses a large consumer base.

However, the data released by the Office for National Statistics cast a different light on this point: Europe has become a less important trading partner. In 2000, the EU represented 60% of the UK’s total exports. As of April 2016, this number has dropped to 48%. Meanwhile, imports from the EU have been within the range of 47% to 55% since end-2014, and are thereby contributing to a growing trade deficit.

According to the chief executive of the “Vote Leave” campaign, Matthew Elliott, the drop in UK exports to Europe is linked to the poor economic conditions in the euro zone, thus reducing demand from Europe, while demand from non-EU partners has grown. Therefore, a Brexit will allow British businesses to speak for themselves, as opposed to speaking as one of 28 countries. The chart below reflects the increase in trade balance of non-EU trade partners, compared to the EU, particularly since 2012.

 

1-UK_trade_balance_EU_2000_2014UK trade balance: EU and non-EU – click to enlarge.

 

Immigration and its impact on the domestic job market is another major concern to voters. According to the latest data release by the Office for National Statistics, net annual migration to the UK reached peak levels at 336,000 in June 2015, as shown in the chart below. Ironically, after his election victory last year, David Cameron had pledged to bring net migration below 100,000– arguably an overoptimistic promise, given that the last time the figure was that low, was in 1997.

It is no coincidence that 1997 was the same year the Labor Party (founded by the Fabian society) came to power. Andrew Neather, former advisor to PM Tony Blair, revealed that the true nature behind the open border mass-immigration policy of the Labor Party was politically motivated to help construct a “truly multicultural country”. As per Neather, the ministers hesitated to reveal their plans publicly, which could risk alienating the Party’s “core working class vote”. Therefore, to promote their open-borders agenda, they focused on arguments based on tentative projections of potential economic benefits.

 

2-migration_UK_2006_2015United Kingdom: Long-Term International Migration, 2006 to 2015 Source: Office for National Statistics, UK  – click to enlarge.

 

Although Cameron managed to limit some of the benefits awarded to migrant workers, he failed to strike a deal that would make the biggest difference: imposing immigration quotas. In fact, Cameron’s approach made things worse: failing to restrict immigration while simultaneously cutting back on public spending, is a recipe for disaster; it will only increase the risk of the immigration crisis devolving into tensions and violence. What is really at stake here?

Immigration has indeed grown into a crisis and the British were forced to deal with the new realities that come with it. Not only did it affect the job market, but it has also affected British culture, even language. Already back in 2009, English was not the first language of more than half a million students in Britain’s primary schools. In Britain and beyond, the wave of mass immigration is often presented as a great leap forward, bringing us closer to multicultural societies, a concept that has long been promoted as the ideal.

 

Project FearThe leader of Project Fear…

 

However, beneath the surface, this heavily marketed idea of “multiculturalism” or “cultural Marxism”, to describe it more accurately, has very little to do with diversity and positive cultural exchanges, as advertised. In essence, it allows governments to intervene extensively in society, under the pretext of acting as a protector of the minorities who grow increasingly dependent on the state. The social division, tensions and discords that would inevitably ensue, would provide fertile ground for further restrictions on personal liberties and self-determination.

 

If the UK Brexits…

The Brexit camp argues that Britain has lost its sovereignty and autonomous decision-making, and paid a high price, both economic and political, to be part of the union. The immigration crisis and the inability to react to it, is merely another manifestation of this excessive centralization.

After Brexit, though, Britain would no longer answer to a higher entity, nor be constrained by it. It would enjoy more self-determination and be able to directly address the interests of the British public. That does not mean that there will be less trade or that Britain will close its borders in the name of protectionism. Let us not forget, the UK is the second largest economy in the EU, so a Brexit will be a severe blow to the EU.

With this leveraging power in mind, an independent UK can simply renegotiate its trade agreements, and most likely achieve a better deal overall, as well. Brexit, despite the “doom and gloom” predictions and dire warnings of the Bremain camp, will just allow the country to freely make whichever decision is right for its citizens at any given moment in time.

The UK Referendum is indeed of great significance, but there is another country that has already gone through with an EU exit of their own, yet no one seems to remember: Greenland, an autonomous Danish territory, which voted in a referendum in 1982 to leave the EEC (European Economic Community), the EU predecessor.

Greenlandic fishermen wanted an end to externally imposed restrictions on how much fish they could take out of their own waters and the outcome of the referendum achieved exactly that; and more: Greenland was given tariff-free access to the Community market for fisheries products, in return for allowing them continued access to Greenlandic waters, while it also got EU funding, on top of the money it received and continues to receive from Denmark. It did take Greenland three years to successfully negotiate this exit, but it happened.

Back in Switzerland, recent polls showed impressive support for the Brexit camp. Last year, the Swiss voted on a referendum against immigration. By doing so, they essentially refused to commit to EU regulations and demanded to limit immigration quotas according to what they see acceptable for their economy and social cohesion. Staying true to their historical record, the Swiss know all too well the value of autonomy.

The significance of a Brexit outcome goes even beyond economics, regional political games and trade relations. It would also mark a cultural and philosophical turning point: Brexit would be an act of modern enlightenment. As Kant put it, 250 years ago:

 

“Enlightenment is man’s emergence from his self-imposed nonage. Nonage is the inability to use one’s own understanding without another’s guidance. This nonage is self-imposed if its cause lies not in lack of understanding but in indecision and lack of courage to use one’s own mind without another’s guidance. Dare to know! (Sapere aude.) “Have the courage to use your own understanding,” is therefore the motto of the Enlightenment.”

 

Every freedom loving person on the planet has their eyes fixed on this referendum. A clear majority voting for Brexit and therefore for more decentralization, would show that the British realized they can break free from their self-imposed nonage, and reclaim individual liberty.

It would be nothing short of an act of courage to challenge the status quo and a chance for the British to speak their own mind. Writing from a little town in Switzerland, I wish the British public a smooth transition to a sovereign United Kingdom, for the sake of freedom, self-determination and peace.

 

The-answer-is-yesDavid Cameron, clad in his EU burkha…(this one never gets old)

 

Cartoons by Steve Bell

 

Image captions by PT

 

Claudio Grass is the managing director of Global Gold, a Swiss bullion depository.

Preserve your financial freedom with physical gold.

 

 

 

Emigrate While You Can... Learn More

 


 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

2 Responses to “Toward Freedom: Will The UK Write History?”

  • ben:

    “The majority have forgotten how to take responsibility for their own livelihoods, successes and failures. They respond to FEAR and want “security”.”

    This is clearly evident in the vitriolic behaviour of the losing Remain voters. Their behaviour since the results were announced, include; immediately holding a second referendum to get the right answer, blaming the whole thing on “old people” even though below 30 age demographic only had a 40% turnout, to just wanting Parliament to ignore the result and carry on as before.

    Unfortunately, with a Parliament stuffed to the gills with Remainers, the “do nothing” scenario is looking increasingly likely. Although, I suspect now that the British Lion has finally roared it may not be so easily mollified.

  • Kreditanstalt:

    The masses are afraid of change and of the future. And many, many people trust elites, leaders and establishment figures in the same way that they still believe in the benevolent trustworthiness of doctors, government employees, financial advisors, government teachers or “social workers”…

    The majority have forgotten how to take responsibility for their own livelihoods, successes and failures. They respond to FEAR and want “security”.

    And the elites NEED larger and larger entities an arrangements, bigger government, more power, more laws, more money, more “unions”, more “inclusiveness”, more experts & planners and more authority. Their system doesn’t go in reverse; it can’t slow own.

    When absolutely all elites, all political parties and leaderships, the CBI, big labour unions, The City, numerous wealthy celebrities and every vested interest whatsoever tell people what they should do, shouldn’t the natural instinct be to RUN A MILE – the other way?

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • America Goes Full Imbecile
      Credit has a wicked way of magnifying a person’s defects.  Even the most cautious man, with unlimited credit, can make mistakes that in retrospect seem absurd.  But an average man, with unlimited credit, is preeminently disposed to going full imbecile.   Let us not forget about this important skill...  [PT]   Several weeks ago we came across a woeful tale of Mike Meru.  Somehow, this special fellow, while of apparent sound mine and worthy intent, racked up...
  • Retail Capitulation – Precious Metals Supply and Demand
      Small Crowds, Shrinking Premiums The prices of gold and silver rose five bucks and 37 cents respectively last week. Is this the blast off to da moon for the silver rocket of halcyon days, in other words 2010-2011?   Various gold bars. Coin and bar premiums have been shrinking steadily (as have coin sales of the US Mint by the way), a sign that retail investors have lost interest in gold. There are even more signs of this actually, and this loss of interest stands in stark...
  • Credit Spreads: Polly is Twitching Again - in Europe
      Junk Bond Spread Breakout The famous dead parrot is coming back to life... in an unexpected place. With its QE operations, which included inter alia corporate bonds, the ECB has managed to suppress credit spreads in Europe to truly ludicrous levels. From there, the effect propagated through arbitrage to other developed markets. And yes, this does “support the economy” - mainly by triggering an avalanche of capital malinvestment and creating the associated boom conditions, while...
  • Gold Divergences Emerge
      Bad Hair Day Produces Positive Divergences On Friday the ongoing trade dispute between the US and China was apparently escalated by a notch to the next level, at least verbally. The Trump administration announced a list of tariffs that are supposed to come into force in three week's time and China clicked back by announcing retaliatory action. In effect, the US government said: take that China, we will now really hurt our own consumers!  - and China's mandarins replied: just you wait, we...
  • Industrial Commodities vs. Gold - Precious Metals Supply and Demand
      Oil is Different Last week, we showed a graph of rising open interest in crude oil futures. From this, we inferred — incorrectly as it turns out — that the basis must be rising. Why else, we asked, would market makers carry more and more oil?   Crude oil acts differently from gold – and so do all other industrial commodities. What makes them different is that the supply of industrial commodities held in storage as a rule suffices to satisfy industrial demand only for a...
  • Chasing the Wind
      Futility with Purpose Plebeians generally ignore the tact of their economic central planners.  They care more that their meatloaf is hot and their suds are cold, than about any plans being hatched in the capital city.  Nonetheless, the central planners know an angry mob, with torches and pitchforks, are only a few empty bellies away.  Hence, they must always stay on point.   Watch for those pitchfork bearers – they can get real nasty and then heads often roll quite literally....
  • Lift-Off Not (Yet) - Precious Metals Supply and Demand
      Wrong-Way Event Last week we said something that turned out to be prescient:   This is not an environment for a Lift Off Event.   An unfortunate technical mishap interrupted the latest moon-flight of the gold rocket. Fear not true believers, a few positive tracks were left behind. [PT]   The price of gold didn’t move much Mon-Thu last week, though the price of silver did seem to be blasting off. Then on Friday, it reversed hard. We will provide a forensic...
  • Merger Mania and the Kings of Debt
      Another Early Warning Siren Goes Off Our friend Jonathan Tepper of research house Variant Perception (check out their blog to see some of their excellent work) recently pointed out to us that the volume of mergers and acquisitions has increased rather noticeably lately. Some color on this was provided in an article published by Reuters in late May, “Global M&A hits record $2 trillion in the year to date”, which inter alia contained the following chart illustrating the...
  • Cryptocurrency Technicals – Navigating the Bear Market
      A Purely Technical Market Long time readers may recall that we regard Bitcoin and other liquid big cap cryptocurrencies as secondary media of exchange from a monetary theory perspective for the time being. The wave of speculative demand that has propelled them to astonishing heights was triggered by market participants realizing that they have the potential to become money. The process of achieving more widespread adoption of these currencies as a means of payment and establishing...
  • The Fed's “Inflation Target” is Impoverishing American Workers
      Redefined Terms and Absurd Targets At one time, the Federal Reserve's sole mandate was to maintain stable prices and to “fight inflation.”  To the Fed, the financial press, and most everyone else “inflation” means rising prices instead of its original and true definition as an increase in the money supply.  Rising prices are a consequence – a very painful consequence – of money printing.   Fed Chair Jerome Powell apparently does not see the pernicious effects...

Support Acting Man

Item Guides

j9TJzzN

The Review Insider

Dog Blow

Austrian Theory and Investment

Archive

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

Mish Talk

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com