Those people who do not avidly track global economic events may be a bit confused by the growing tensions surrounding the U.K. referendum to exit the European Union, otherwise known as the “Brexit.” Or, they are completely indifferent. Unfortunately, the potential fallout surrounding the event could very well affect the entire world, but perhaps not in the manner the mainstream media and international financiers would have us believe…
I would point out that under normal global economic conditions, the Brexit really shouldn’t matter much to anyone outside of the U.K. If the EU was fiscally stable, if its banks were solvent and its national debts well in hand, if the EU was actually a practical and successful supranational body, then the damage done by a British vote to leave the union would be minimal. Of course, this is not the case. As many other independent economic analysts and I have been outlining for years, the European Union is on the verge of economic breakdown. Look at it this way — if financial turmoil in a tiny member state like Greece can cause widespread doubts about the EU’s stability, then there is something fundamentally volatile about the entire structure.
The Brexit matters greatly to the future of the EU because, theoretically, if one of its most prominent members says adios, then other members may do the same. As it stands now, the EU cannot afford to have even one member, economically large or small, drop out of the system.
The Brexit matters to the rest of the world including the U.S. because of the brilliantly-destructive program of interdependency and globalism that has shaped our financial house for decades. Interdependency leads to extreme economic weakness because no piece of the global system has the tools to survive without the other pieces; and on top of this, when one part of the machine goes down, ALL the other parts are affected.
It is a truly horrible and seemingly idiotic system; but not so idiotic if you accept the reality that it is deliberately engineered to fail.
When you examine the fiscal foundations of every major economy in the world today, what you find is a financial shell game. The fundamentals tell us the truth; with global exports and imports in decline, global shipping of raw materials in decline, manufacturing in decline, retail in decline, employment in decline, real unemployment numbers including those people no longer counted by the Labor Department skyrocketing and the number of people on welfare and food stamps skyrocketing.
In reality, the global economy is one massive thin-skinned bubble searching for a sharp object to impale itself on. The Brexit may very well be that sharp object.
Before I go into the various details surrounding Thursday’s vote, I want to state that I am in full support of the British movement to leave the European Union. The reasoning behind a successful Brexit is solid. The European Union’s rabid socialist tendencies have created a doom scenario for all those shackled to the supranational body. Forced multiculturalism and cultural Marxism has opened a floodgate of Islamic refugees which hold ideological beliefs completely incompatible with western principles and heritage while at the same time introducing a massive vampiric drain on the prevailing social welfare systems.
The EU’s governing body is a mostly faceless and unaccountable bureaucracy that hands down legal dictates from on high while the general population of the member states have little or no input. The European Central Bank’s monetary policies support failed financial institutions and fraudulent markets while siphoning tax dollars from stronger and more successful nations in order to feed the debt addictions of weaker countries. The very philosophical engine behind the EU is one of collectivism; it is a system that requires a hive mentality in order to function. Only a fool would WANT to participate in such a political and financial farce.
That said, I think we need to take stock of certain underlying realities.
First, as mentioned earlier, the EU, like most other economies today, is an interdependent structure and is thus designed to fail. The EU is not the golden goose for globalists, it is just another appendage that can be sacrificed or rearranged in order to achieve greater goals. The EU is a means to an end, it is not the ultimate prize.
The ultimate prize for globalists would be a system like the EU with a single currency and a single monetary authority, but this new system would erase all sovereign borders and install a single governmental authority as well.
What does this mean? It means that the failure of the EU does not necessarily mean a failure for the internationalists. For groups of globalists that promote an ideology of Fabian Socialism, a breakdown of the EU, whether partial or total, can be used as leverage for a larger and more centralized global power structure in the long term. Mark my words, when the system comes crashing down (whether after the Brexit or after another trigger event), internationalists will say that the EU failed not because it was centralized, but because it was not centralized ENOUGH.
Even though I support the Brexit movement based on the principle that supranational unions are a heinous affliction upon free individuals and nations, I have no illusions that a successful Brexit vote will actually harm the globalists. In fact, they may very well desire the U.K. to leave the EU.
Why? As noted, the global economy is on the verge of implosion. The ONLY elements of the system that are not yet crashing are stock markets. This is because stock markets do not in any way reflect the fundamentals of the economy, they only reflect investor perceptions of the economy. Perceptions can be manipulated for a time, and public psychology can be subdued by false optimism and lies. It can take years for a population to psychologically accept the idea that they are in the midst of a recession or depression. Therefore, it can take years for stock markets to finally reflect the legitimate dangers within the economy.
Central banks at the behest of globalist institutions like the International Monetary Fund and the Bank For International Settlements have spent incredible amounts of capital and energy managing public perception. Through subversive monetary policies, they have weakened national economies to the point of collapse, and this collapse is meant to create enough chaos to inspire the masses through fear to support greater centralization.
While certain banking institutions may fall, the bankers themselves have no intention of taking any blame for the inevitable collapse.
If you examine modern history (the past century), you will find in the aftermath of every crisis that globalist organizations have consistently blamed nationalism and sovereignty while promoting socialism and centralization as the most civilized solution. That is to say, globalists create widespread war and financial terror, blame conservative ideals such as sovereignty, then argue that such ideals must be eradicated for the greater good of the greater number.
We have to be honest in our exploration of the Brexit event and admit that in this case the globalists win either way.
If the Brexit succeeds, the globalists can allow the market systems they have been inflating for years to finally crash. They can then blame those dastardly "far-Right extremists" in the U.K. for triggering a domino effect within the global financial system, conveniently scapegoating British conservatives, moderates and sovereigns for a breakdown that was going to happen eventually anyway. Their solution will once again be to argue for the end of “barbaric” conservative principles and install complete centralization and socialism as the cure.
If the Brexit fails, or if it is a controlled fake out, they can artificially boost markets for perhaps another month while distracting the public away from the negative fundamentals yet again.
We should also not overlook the possibility that the referendum vote may be rigged one way or the other. Current polls indicate a tie between the “Leave” crowd and the “Remain” crowd. Any vote this close is the easiest kind of vote to rig a few percentage points to either side.
I believe the Brexit vote may be allowed to succeed, here’s why…
1) Elites including George Soros have suddenly decided to dive into the market to place bets on the negative side. Dumping large portions of their stock holdings, shorting equities and buying up gold and gold mining shares. Soros has been preparing his portfolio for a successful Brexit vote while at the same time publicly warning of the supposed dire consequences if the referendum passes. The last time Soros put this much capital into the markets was in 2007, just before the crash of 2008.
2) The IMF and the BIS have been warning since late 2015 (for six to eight months) that a global economic downturn is on the way in 2016. We saw considerable volatility at the beginning of this year, and markets are due for another shock. The last time the BIS and IMF were so adamant about an impending crash was in late 2007, just before the 2008 market plunge.
3) While the Federal Reserve has not yet implemented a second rate hike (I still believe they could use a rate hike this year to stab markets in the back if necessary), Janet Yellen pulled a maneuver which was almost as upsetting to investors. After the Fed policy meeting last week, markets were moderately exuberant and stocks were rising, then, Yellen opened her mouth and blamed the Brexit for the rate hike delay…
Here is what the Fed has done: By delaying the second hike for another month, and then blaming the Brexit vote as a primary reason, they have created a bit of a paradox. If the Brexit vote passes, the Fed is asserting that they may not hike rates for a while, giving market investors the impression that the global economic recovery is not all that it is cracked up to be. If the Brexit vote fails, then the Fed MUST hike rates in July, otherwise, they lose all credibility. I believe Yellen’s claim that the Brexit vote was the cause of the hike delay was highly deliberate. It has triggered what may become a growing firestorm in equities and commodities.
From the point of view of investors, if the Brexit passes, then all hell breaks loose. If the Brexit fails, then the Fed will hike rates and once again, all hell breaks loose. Or, the Fed refuses to hike rates even though its number one scapegoat is out of the picture, it loses all credibility, and all hell breaks loose.
It’s a lose/lose/lose scenario for the investment world, which is probably why global markets plunged after Yellen’s remarks. Investors have been relying on the predictability of central bank intervention for so long that now when ANY uncertainty arises, they run for the hedges.
The Fed decision to blame the Brexit for their rate hike delay could indicate foreknowledge of a successful Brexit vote.
4) The recent murder of British lawmaker Jo Cox is perhaps the weirdest piece in the puzzle of the Brexit. For one thing, it makes no sense for a pro-Brexit nationalist (Thomas Mair) to attack and kill a pro-EU lawmaker when the polls for the “Leave” group were clearly ahead. One could simply argue that the guy was nuts, but I’m rather suspicious of “lone gunman,” and his insanity has yet to be proven. I see no reason for this man, insane or not, to be angry enough to kill while the Brexit side was winning in all the polls.
If someone was using him as a weapon only to discredit the Brexit vote or sway the public towards staying in the EU, you would think that they would have initiated the murder closer to the day of the referendum when it would have the most effect. The information flooded public has days to digest new data and forget Jo Cox.
My theory? Thomas Mair has handlers or he is just a mentally disturbed patsy, and his purpose is indeed to paint the Brexit movement as “angry” or crazy. But this does not necessarily mean the intent behind the assassination of Jo Cox was to break the back of the Brexit movement. Rather, the goal may only be to perpetuate a longer term narrative that conservatives in general are a destructive element of society. We kill, we’re racists, we have an archaic mindset that prevents “progress,” we divide supranational unions, we even destroy global economies. We’re storybook monsters.
Even the cultural Marxists at the Southern Poverty Law Center somehow produced documents allegedly linking Mair (a veritable unknown) to Neo-Nazi groups in 1999. Wherever the SPLC is involved, the official story is always skewed.
The murder of Jo Cox has had a minimal effect on Brexit polling numbers. In the end, the elites may find Thomas Mair more useful as a mascot for the Brexit AFTER the vote, rather than before the vote.
So now the Brexit movement, which is conservative in spirit, is labeled a “divisive” and “hateful group”, and if the referendum is triumphant, they will also be called economic saboteurs.
There is also the possibility that the Brexit is yet another fake out. We have seen many of them over the past few years. So many in fact that a lot of analysts in the Liberty Movement have grown pretty cynical, as if the system could be propped up forever. The issue is always, of course, one of timing. All fundamentals indicate that the global economy is going down regardless of what central banks and international financiers do in the long run. The only question is whether or not they feel it is time to pull the plug on one of the last remaining bubbles (stocks). A successful Brexit could be a perfect scapegoat for the next leg down in the economy, or it could be a perfect placebo to boost markets for a short time if it fails. In either case, I have no doubt that the outcome has already been decided.
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written by shutupnsing , June 22, 2016
Turning and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity. ~ WBY
written by Islander , June 22, 2016
Thank you for letting us know your thoughts about this British referendum in this very interesting article. As you said Brexit or not the outcome has already been decided. But no Indian is allowed to leave the reservation and that includes Great Britain. It was the same thing for Greece. While taking us to serfdom the masters of the world want us to accept our fate and so in their great “kindness” they allow us to vote and “choose”. And as you wrote, a Brexit failure will boost markets for some time.
written by Brandon Smith , June 22, 2016
@Islander
A Brexit failure will boost markets for another month at most, until the fundamentals start to creep in again. Then it will be the Fed's turn to either put up or shut up on rate hikes.
written by vanpelt , June 22, 2016
All correct. The number of high powered Op-Eds warning against Brexit (along with other globalist luminaries the latest being U2) position them as being on the record that if Brexit happens, global instability ensues. Cameron would never have brought this forth to vote if it were never meant to happen? Yes, it could all be much ado about nothing but
the real economic indicators are globally dismal while the
US stock market barometer is running on fumes yet pinned to "all is well"
Certainly an opportunity for resolution. We will know soon enough.
written by Jasper , June 22, 2016
Most people in the UK are pretty much brain dead. In or out, I'm just going to look after about me.
written by Major Skeptic , June 22, 2016
1) A faked Trump assassination,
2) A biblical earthquake in California, which would make FEMA 3 for 3 (2001 FEMA report identifies 3 catastrophes that FEMA suddenly becomes concerned might happen (in this order): 1) Major terror attack to hit New York (check), 2) major hurricane to hit New Orleans (check), and 3) major earthquake on the San Andreas fault. http://blog.chron.com/sciguy/2...astrophes/ I think the question we need to ask is: "what are the odds of anyone suddenly becoming concerned that 3 catastrophes (that have never happened before (on this scale), might happen, and so far, 2 of them have happened (in the order listed)? Most such people would be labeled paranoid, but FEMA will go down as one of the greatest prognosticators of all time!)
Like Brandon says: "They tell us what they're going to do before they do it. I'm glad I no longer live in California!
written by Sir Peasant , June 22, 2016
The Bullingdon boys Battle of Brexit and other ripping yarns of derring do
http://i.dailymail.co.uk/i/pix/2009/07/22/article-1201536-05CECED3000005DC-662_468x359_popup.jpg
written by ridge point , June 22, 2016
Wondering if the fall out from a UK exit would initiate a panic situation among the citizens of some of the other member nations such as Germany - furthering what you state Brandon as a reason to initiate the vice grips on our freedom.
written by Gary Leaf , June 22, 2016
Thanks for this article. It does look like brexit triggering a financial collapse is the preferred outcome.
Another data point I think supports the timing of this trigger is that delivery action in precious metals at COMEX has changed last month and this month.
For many years gold contracts standing for delivery have quietly disappeared as they come due, presumably due to cash settlement. This has allowed the paper derivative gold market to remain intact. But last month 9 tonne of gold stood for delivery, this month is expected to see about 50 tonne delivered, and 105 for July
Most commentators I follow think this will break the COMEX as a viable arbiter of bullion prices, and that such failure signifies much higher bullion prices and the end of the current monetary system. Bill Holter or Andy Hoffman are probably the easiest to understand on this subject.
Meanwhile the banking syndicate are short gold something like 300,000 contracts, which is 30 Moz, about US$40 billion at $1300/oz, or US$300 billion at Jim Rickard's $10,000/oz target. Also, they are short silver about 95,000 contracts or 475 Moz. Could be something like US$500 billion after a sudden price reset.
So if Brexit is the chosen trigger, then it seems likely that bank bail-ins will also be triggered due to bank losses on bullion derivatives. Otherwise surely the banks would have closed their short positions by now.
written by PeterK , June 23, 2016
Another masterpiece article from Brandon,its in line with my analysis here www.hidencode.com
written by Brandon Smith , June 24, 2016
@Islander
Yes, as predicted here at Alt-Market, the Brexit was indeed a sharp object for the bubble market.
written by Islander , June 24, 2016
Good on you Brandon. I invested all I could lay my hands on in physical gold and silver, but I wish I had had more time. Anyway cheers!
