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Brexit - bmyers - 07-23-2019

I wasn't sure where to post this topic, so feel free to move it.

With the change of leadership in Britain, it looks like Brexit is more likely to happen at the end of October, one way or another. 

I wonder how this change will effect the global economy? Once Britain exits, will other countries decide to go? Will this be good for the US Economy? 

We are now such an interconnected world, I'm trying to grasp what the effects will be on the US? I think it may be advantageous to the US in the long run if we are able to bring back some of the business and prove/re-establish that we are the stable economic driving powerhouse. 

The worrisome part, China, India, and I'm sure Russia are all chomping at the bit to see what great deals they can grab and what markets they can devour.

RE: Brexit - David - 07-23-2019

It is good to see the will of the people is still (somewhat) alive in G.B. because that government is crazy out-of-control.  They are losing their country to the muslims and the masses are only now starting to wake up to that fact.  

I don't anticipate a huge issue financially here in the U.S. as far as economics.  If anything, I think we'll continue to increase.

RE: Brexit - Tom Mac - 07-23-2019

Keep hearing that the new PM and Trump have talked about striking up new trade deals... time will tell.

RE: Brexit - bdcochran - 07-24-2019

(07-23-2019, 07:42 PM)Tom Mac Wrote: Keep hearing that the new PM and Trump have talked about striking up new trade deals... time will tell.

Well, when you understand that the current tariff structure was between the EU and the USA, it makes sense.

The exit was not going to be smooth and will not be smooth for some simple reasons:
1.  Currently, GB is part of a customs union, a union which sets standards for the manufacture/distribution/sale of many goods.  Now those issues cannot be all addressed without review of products, new treaties;
2.  Currently, Ireland and Northern Ireland share the same item and the same customs union.  The goods go back and forth freely.  This will have to change.
3.  A whole new bureaucracy has to be created, both in GB and in the EU.  New physical facilities have to be created.
4.  Now comes the underlying problems which are not in the news.

  Greek debt situation.  Since becoming independent in the 1800s, Greece has gone bankrupt 5 times.  The Greek government cooked the books when it applied for membership.  It also never kept a requirement that a national budget could not run a deficit of more than 3%.

When you started reading the news accounts about Greece, the national bonds and debt were largely held by private individuals and French banks.  The Germans wanted to continue having Greece as a market place for manufactured goods and the French were concerned about the French banks taking a hit on Greek Bonds.  Over time, with the "bailouts", the private individuals and French banks got rid of as much Greek debt as they could and the new loans were made by the EU.  This transferred the risk of loss onto the taxpayers of the EU.  GB was not benefiting.  If Greece does not pay back the loans, how much of a hit is supposed to be borne by the Brits??

The other part of the deal is that no country can run more than a 3% deficit.  Because each government is sovereign (and can run a deficit), it will affect inflation, planning for the EU.  And, the governments routinely "cheat" or don't meet the "goal".  Although GB doesn't have the euro, it is still affected by the "cheating".  

When Sarkosy was running for re-election in France as President, I looked, and as I anticipated, the French deficit grew deliberately.  If people were employed, they would vote for him.  Yes, there would be inflation, but it would not hit until after he was re-elected.

By the way, this is the way of all politicians.  Trump got a whopping increase in the debt ceiling and government spending has skyrocketed.  Yet, he has instructed his people to look at spending cuts after the next election.  Why?  Because so long as people are working, they will vote for him for re-election.  Devil take the hindmost when the inflation hits.

RE: Brexit - bmyers - 07-24-2019

(07-23-2019, 07:42 PM)Tom Mac Wrote: Keep hearing that the new PM and Trump have talked about striking up new trade deals... time will tell.

I have read the same thing that this could potentially be a huge boost to the US and potentially Britain. 

The big question, if Britain leaves and succeeds or at least appears to, will that encourage other countries to leave and abandon the struggling countries that are being supported through the EU?

RE: Brexit - Bob - 07-24-2019

The EU is basically like saying "Besides the US Federal Government, I want ONE MORE layer of government and control over me."

Bully for Jolly old England throwing off a shackle! Works repercussions will be none/short lived/minor.