Brexit continues to throw the world into economic and social turmoil


    In the wake of Britain’s historical referendum, the global economy has devolved into a frenzy of plummeting global stocks and record low government bond yields. Initial fears regarding Brexit’s effects on banks, cross-border investments and the pound are beginning to “crystallise.” With the pound hitting a whole new low at $1.28 to the US dollar, some are beginning to regret leaving the EU.

    Supermarkets are falling dramatically, with Tresco feeling the brunt of it, going down 9 per cent at 160p. Morrison shares fell 6.6 per cent at 174p and Sainsbury’s is down 3.6 per cent at 215p.

    The U.S. experienced a 1.7 per cent decline in the Stoxx Europe 600 and Japan’s Nikkei Stock Average also experiencing a 1.9 per cent decline. Moreover, Hong Kong’s Hang Seng lost 1.2 per cent and all the while gold climbed dramatically, being last traded at $1369 an ounce making it a two-year high.

    There is much more data indicating an average drop, and many are pointing toward the sterling’s downward spiral. Andrew Edwards, chief executive of ETX Capital was cited saying “The pound is the chief proxy for the post-Brexit mood in the markets.” Without confidence in the British pound, investors have begun to fall victim to the anxiety forewarned pre-Brexit.

    Just last month 51.9% of 70% of UK’s population made the decision to leave the EU. Propelled by preserving sovereign integrity and economic independence, the people voted for a new Britain unshackled by the bureaucratic elites running the European Union. However, with the creation of an unstable global market it’s difficult to ascertain the longevity of this leave.

    It was a campaign hard fought by political actors such as UKIP, Boris Johnson, and Nigel Farage. The campaign was overwhelmed with scandal with  MP’s being murdered, deliberate fear mongering against the onslaught of immigrants, and warnings of a centralized European government controlling and regulating people’s every move. Though, despite the fact that these powerful political actors pushed the public to leave, the reality of their decision seems to be catching up to them as they quietly scurry away from the crime scene.

    As of yet, the future is anyone’s guess. The pound could rebound or continue to plummet but only speculation exists. In any case, the process for Britain’s formal leave will take approximately 2 years until it’s legitimate. We may see a demand for another referendum if global shares continue to plummet but that’s also speculation.

    Aside from the economic ramifications, people have been noticing the possible social effects of Brexit. News headlines have been making light of the rise of the extreme right. Nativist career politicians are finding ways to exploit fears of immigration and lost sovereignty, a blow to American, Britain, and other nation’s push for multiculturalism and toleration.

    There is a definite global paradigm shift in the works, however, its effectiveness is yet to be seen. While there are a lot of red flags, there is still hope in the next two years that things will change.

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    I cover technology, utilities and biotechnology for Markets Morning, and I help out occasionally with other industry sectors. I've written about investment and personal finance topics for more than 20 years from a lowly copywriter to editor-in-chief, so I've done a little bit of everything. For what it's worth, I have a BA from Duke University and an MBA from Rollins College. I'm married with one daughter, and that's worth more than everything else put together.