The Brexit ‘Punishment’?

One of the biggest problems with a complex financial/economic system, such as what has been created globally, is that it is very difficult to assign responsibility for specific events. The Pound Sterling’s famed devaluation since the Brexit Referendum in June 2016 has been something to behold. There are those who have created all sorts of intricate goings on to ‘explain away’ the decline. We prefer the simple answer – when a logical one is available.

We are of the opinion that Europe – with the rest of the world in tow has almost fully embraced socialism. How the EU has been run is Exhibit 1. Since England is not one of the many smaller countries dragging down Germany and the productive EU members, they simply cannot be allowed to leave. “To each according to his needs from each according to his means” doesn’t get much simpler. Granted the UK has debt. But it also has wealth and some productivity – and that is something sorely needed in the most recent failing of the ‘great experiment’. Sure the devaluation helps exporters – everyone knows that. But it also skewers the domestic population – precisely the group responsible for all the ruckus. Punishment? Absolutely.

Since the UK voted to leave the European Union on 23 June 2016 the pound has devalued sharply.

It has fallen by as much as 21 per cent against major currencies and has only strengthened against the Argentinian peso and the Turkish lira among emerging market currencies.

The UK has been here before. Anyone with a long memory may dimly remember this time 50 years ago as being particularly traumatic.

The 14 per cent devaluation of the pound in November 1967 by then prime minister, Harold Wilson, was an admission of national failure that we might find hard to understand today after half a century of sterling gyrations.

The legacy of 1967

While Brexit may not be considered a devaluation in its truest sense, many of the problems Wilson had to contend with in the 1960s remain all too familiar – too many imports, not enough exports, and inflation.

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