Tag Archives: Brexit

Market Friday: Who’s Afraid of a No-Deal Brexit? by Tom Luongo

Boris Johnson is probably going to get a no-deal Brexit, which is what he wanted all along. From Tom Luongo at tomluongo.me:

To answer the question in the title… not Boris Johnson. If anything Johnson’s plan from the beginning has been to maneuver events to this state.

The latest news is that Boris just left his final offer on the table for the EU, walked away from talks but left the door open.

Johnson’s spokesman said shortly afterwards that talks were now over and there was no point in the EU’s chief negotiator Michel Barnier coming to London next week barring a change in approach.

“The trade talks are over: the EU have effectively ended them by saying that they do not want to change their negotiating position,” his spokesman said.

Johnson’s brinkmanship, which follows an EU demand that London make further concessions, may push Brexit towards disorder, though he still left open the possibility that the EU could reconsider and offer Britain a better deal.

“Unless there is a fundamental change of approach, we’re going to go for the Australia solution. And we should do it with great confidence,” he said.

The Australia solution is No-Deal and WTO terms.

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Market Friday: Johnson’s Big Week on the Way to the COVID Gallows, by Tom Luongo

Like many politicians, Boris Johnson is capable of being clever and stupid at the same time. From Tom Luongo at tomluongo.me:

n the same week Prime Minister Boris Johnson blew up trade deal talks with the European Union he signs a big trade deal with Japan.

In the same week Boris Johnson unveils new, very unpopular social distancing rules barring gatherings of more than six people, he puts the screws to the Scottish Nationalists who still think their support comes from their being arch-Remainers and not the contrary nature of most Scots.

In the same week that Boris Johnson sets an October 15th drop dead date for Brexit talks with the EU, President Donald Trump’s election chances rose to even for the first time this summer.

In the same week Julian Assange goes through a sham trial for the sake of protecting the indefensible actions of U.S. and UK intelligence agents Johnson’s government is mulling scrapping the BBC’s mandatory licence fee handing them taxpayer money to undermine world security as the tip of the Marxist spear.

Now given all of that, it’s clear that Boris Johnson as Prime Minister is a decidedly mixed bag. His response to the Coronapocalypse has been an unmitigated disaster, bowing to political winds he should have never exposed himself to.

In doing so he’s squandered the significant goodwill his Brexit maneuvers of 2019 garnered him and the Conservative party. So, it’s obvious by now that his lack of managerial/organizational skill is what is undermining his government.

At the same time, however, Johnson’s handling of Brexit has been nothing short of excellent, the valid criticisms of the Withdrawal Act by Nigel Farage notwithstanding.

Johnson inherited a poison pill from Theresa May and in his zeal to fulfill a political promise agreed to a treaty with the EU that would bring his hardball negotiating stance to the current crossroads because of his compromises on the issue of Northern Ireland.

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Johnson Pushes the EU to the Brink over Brexit, by Tom Luongo

By now its obvious the UK has the upper hand in negotiations with the EU, and always has. From Tom Luongo at tomluongo.me:

Brexit Direction Sign

When the end-game of a political issue becomes obvious I tend to move on to other pressing issues. For most of 2018 and 2019 Brexit was a top-drawer issue because its end-game was uncertain.

With Boris Johnson’s resounding victory in December Brexit’s end-game became obvious if you assumed Johnson was a man of his word.

That was a tough pill to swallow, but given the political stakes for Johnson not a bad bet to put money on. And I argued after swallowing that pill that Johnson was in a position to drive the Remainers in his government and Parliament to extinction during Free Trade negotiations.

With the latest twist in the Brexit saga it looks like he and his negotiating team are ready to drive the final stake through the heart of them and the European Union with the Internal Market bill.

The Withdrawal Act’s validity and applicability to the future relationship between the EU and the U.K. is predicated on two things.

  1. Both sides negotiating a Free Trade Agreement in good faith.
  2. A free trade agreement is actually signed by the two parties.

If either of these things do not come to pass Section 38 of the Withdrawal Act upgrades the power of the U.K. government since it asserts the sovereignty of the U.K. parliament as a law-making body for the whole of the United Kingdom.

This includes Northern Ireland.

Johnson’s seeming sell-out of Northern Ireland with his agreeing to the Withdrawal Act was always predicated on there being a free trade deal struck between the EU and the U.K.

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The luxury of apocalypticism, by Brendan O’Neill

The elite want us to all to be Chicken Littles, which will make it easier for them to implement their deadly schemes. From Brendan O’Neill at spiked-online.com:

The elites want us to panic about Covid-19 – we must absolutely refuse to do so.

People’s refusal to panic has been a great source of frustration for the establishment in recent years. ‘The planet is burning’, they lie, in relation to climate change, and yet we do not weep or wail or even pay very much attention. ‘I want you to panic’, instructs the newest mouthpiece of green apocalypticism, Greta Thunberg, and yet most of us refuse to do so. A No Deal Brexit would unleash economic mayhem, racist pogroms and even a pandemic of super-gonorrhoea, they squealed, incessantly, like millenarian preachers balking at the imminent arrival of the lightning bolt of final judgement, and yet we didn’t flinch. We went to work. We went home. We still supported Brexit.

Our skittish elites have been so baffled, infuriated in fact, by our calm response to their hysterical warnings that they have invented pathologies to explain our unacceptable behaviour. The therapeutic language of ‘denialism’ is used to explain the masses’ refusal to fret over climate change. Environmentalists write articles on ‘the psychology of climate-change denial’, on ‘the self-deception and mass denial’ coursing through this society that refuses to flatter or engage with the hysteria of the eco-elites. Likewise, the refusal of voters to succumb to the dire, hollow warnings of the ferociously anti-Brexit wing of the establishment was interpreted by self-styled experts as a psychological disorder. ‘[This is] people taking action for essentially psychological reasons, irrespective of the economic cost’, said one professor.

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Will Brexit and coronavirus end the EU? by Alasdair Macleod

If Brexit and the coronavirus end the EU, then some good will have come from the latter. From Alasdair Macleod at goldmoney.com:

The EU and euro face a sudden deterioration in economic conditions due to the coronavirus, which seems certain to widen the differences between Germany and the spendthrift Mediterranean members. But a more immediate problem is the increasing likelihood that the ECB will lose control over financial asset prices, particularly those of government bonds.

In the short-term, it seems likely the euro will rise against the dollar as currency and financial distortions, principally in the fx swap market, are unwound. However, the eurozone faces a developing financial crisis comprised of the following elements: a collapse in economic activity, escalating payment failures, a drastic contraction of bank credit and a collapse in bond prices, as well as the medium used to buy them (the euro).

Eventually, Germany is could go it alone by introducing a gold-backed mark, which will only happen after the European Project is finally abandoned.

Introduction

Brexit came as a shock to the political bureaucracy that comprises the European Union. They had, and still have an ostrich-like stance with their heads in the sand and their rear ends exposed to passing dangers. Their economic incompetence has been exposed for all to see as well as their political ineptitude.

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EU is Now Deaf to Their Coming Defeat, by Tom Luongo

Arrogant oblivion is not a good substitute for common sense and receptivity to other points of view, both of which the EU has lacked for many years. From Tom Luongo at tomluongo.me:

Yanis Varoufakis once described negotiating with the European Union like you’re singing the Swedish National Anthem. No matter what proposal you put in front of them, they acted like they didn’t understand and simply reiterated terms.

But, at least then they heard something. It may have been gibberish to them, but at least sound waves made it to their ears.

Today, these people are like overwhelmed autistic kids needing noise canceling headphones to blot out the unwanted stimuli. It may be therapeutic but it doesn’t solve the situation.

Now that Brexit is complete the EU has gone one step further, blocking out the very real strategic and tactical disadvantage they are in dealing with the United Kingdom in trade deal talks.

The arrogance and intractability of the EU when it comes to negotiations is supposed to be their biggest weapon. They project a strange combination of strength and indifference that can only come from people thoroughly insulated from personal accountability for their mistakes.

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Independence and its consequences, by Alasdair Macleod

Alasdair Macleod sees Britain’s future post-Brexit as bright, but there’s one huge danger. From Macleod at goldmoney.com:

Britain left the EU on the last day of January and is an independent nation once more. The new Johnson government is confident that Britain will do well outside the EU. Free trade will be embraced, and a no-deal outcome, now dubbed an Australian trade relationship, holds no fears for the British government.

This article summarises the political and economic consequences of this historic moment. The fly in the ointment is there is no sign that Britain’s government understands the importance of sound money, which will be crucial in the event a global economic and financial credit crisis materialises.

Independence and trade negotiations

Having given independence to all its colonies, now it’s Britain’s turn. On 1 February the UK became politically independent and entered an eleven-month transition period while trade terms with the EU and other trading nations are negotiated, with the objective of entering 2021 with freedom to trade without tariffs with as many nations as possible. If Britain succeeds in its initial objectives these trade agreements will include not only the EU but also America, Japan, South Korea, Canada, Australia, New Zealand, the other trans-Pacific Partnership nations and a host of sub-Saharan African nations in the Commonwealth. It amounts to about two-thirds of the world measured by nominal GDP, of which only 21% is with the EU.

Additionally, an analyst looking at market substitution must allow for the relative dynamism of economies. Britain’s trade in goods with the EU has been declining, and today represents about 45% of Britain’s exports, having slipped from 55% in 2006. Despite the penalty of WTO terms with nearly all of Britain’s other trading partners, British exports are gaining more traction in trade outside Fortress EU. The future is brighter elsewhere.

Furthermore, the EU’s trade covers physical goods affecting only 8% of Britain’s GDP, with services a separate issue negotiated on a case-by-case basis.[i]] Being predominantly wholesale, most trade in financial services is excluded (though the EU is trying to claim it is not), and those at the retail level are delivered through British-owned subsidiaries based in Luxembourg and Dublin. Attempts to force EU standards on British financial services have a long history of failure, and the most recent suggestion, that the EU will seek to maintain access to British fishing waters in exchange for continued access for financial services to the EU, is an empty bargain.

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Brexit Voters Aren’t As “Irrational” As Their Opponents Think, by Ryan McMaken

The plebes keeps disappointing their betters with their stupidity and irrationality. From Ryan McMaken at mises.org:

Chris Johns at the Irish Times is dismayed by all the support he sees for Brexit. He’s vexed by the fact so many of Brexit’s boosters are — in Johns’s eyes—going against their own economic interests.

Johns notes, for example, that Brexit may take a significant toll on British manufacturing, and may be problematic for income growth and tax revenues. Resigned to Brexit as a fact, Johns suggests trying to make the transition as painless as possible, but insists, “Britain will either be poorer or much poorer.” But it’s too late the avert at least some damage. Thus, the narrative goes something like this: “we tried to warn you people about the dangers of Brexit to your pocketbook. But you went ahead and supported it anyway. So now you’re worse off.”

Johns’s is missing a big part of the economic argument made by Brexit supporters.  At the moment, even the economic data suggests the British are better off today, but the Brexit gambit for many has always been one in which supporters calculate political independence will bring long-term economic gains, even if there are problems in the short term.  This hardly proves supporters are acting against their own economic interests, or that they don’t understand economic realities. It simply shows their predictions of the future are different from Johns’s.

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Did Macron and Johnson Negotiate a Hard Brexit in October? by Tom Luongo

A hard Brexit might be in both Macron’s and Johnson’s interests. From Tom Luongo at tomluongo.me:

Something odd is happening with Brexit. It looks like Prime Minister Boris Johnson is pushing for a hard Brexit much to my surprise.

Johnson’s strong showing in the recent election which secured the Tories its biggest majority since the days of Margaret Thatcher should have set the stage for the great Brexit bait and switch.

This has been my argument for months since Johnson became the front-runner to replace Theresa May. All Johnson had to do was manipulate events to get a majority which marginalizes the hard Brexiteers of the European Research Group (ERG).

Then he could undermine Brexit by giving back all the concessions during his subsequent negotiations with the EU over a trade deal.

This analysis should have been the correct one given the staunch opposition by the political elite in the U.K. to Brexit.

But something has changed.

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Deplorables Versus the Ruling Class: A Global Struggle, by Chet Richards

People around the world just keep moving into the Deplorable camp. From Chet Richards at americanthinker.com:

Consider the age of monarchs.  Squabbling barons select a supreme ruler – a king or an emperor — to suppress the squabbling.  Peace and prosperity return to the land.  The king makes policy but he can’t do everything.  His minions take care of the details.

Minions mean bureaucracy.   The bureaucracy grows.  The king grows old and dies.  The dynasty continues.  The bureaucracy continues – always continues, and always grows.  The bureaucracy becomes an establishment kingdom unto itself.  The bureaucracy grows in power and serves its own interests.  The king diminishes in power.  The land grows restless under the increasing regulatory tyranny and taxes.  Legitimacy –what the Chinese called the “mandate of heaven” —  is lost and so is the dynasty.

Change the names and we are at the end of a similar cycle – a cycle that began with the guillotine.  This time it is a world-wide cycle.  The modern king is a modern tyrant – Stalin, Hitler, Mao were the worst.Soc

The socialist idea had been kicking around since the 18th century.  This seemingly plausible notion shaped the various Marxist evils of the 20thcentury.  The Soviet Union, Mao’s China, Nazism, Fascism, and today’s imperious European Union, are all socialist tyrannies of one degree or another.

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