Posted Jun 23, 2016 by Martin Armstrong
QUESTION: Mr. Armstrong; If BREXIT wins here since everyone I speak to seems to want to vote out rather than stay in, what would really happen?
ANSWER: Assuming the politicians actually honor the vote, which is a very big IF, you are looking at, at least a two-year process. But it is important to understand that this vote is only “advisory” and is by no way binding on Cameron. Even if a miracle took place and the British people voted to save their country from foreign suppression, Cameron would stall and the process would take years to happen. Then, government can simply take the vote as “advisory” and refuse to implement the will of the people. This is the pitch behind the curtain to Brussels.
The reason you still have the pound is because it had to leave the ERM back in 1992, and then Spain and Italy were also forced to follow. This incident proved that fixed rates or pegs never work, just as we saw with the Swiss. The idea of fixed rates failed, and there is the underlying simple fact that creating one currency and one national policy means that some nations will suffer as others prosper.
When the Federal Reserve was first established, each branch was autonomous and set its own interest rates to manage internal capital flows. Roosevelt usurped the Fed by bringing it under political control in 1935, thereby removing the design and creating a single national rate. This design was imposed for World War II, but it does not promote economic stability. Farmers suffer because the Fed will raise rates to stop speculation in New York. The system is actually unstable. This is what Europe copies and why the ECB will fail. We saw Southern Europe suppressed into a depression with youth unemployment over 60%, but the ECB is worried about banks and bondholders.
Cameron will delay, stall, and most likely deny the vote if BREXIT actually won.
Tags: Brexit, EU, Fixed Rates, Pound