Sunday, June 26, 2016

BRITAIN SHOWS THE PATH & NOW ITS OTHERS TURN IN THE COMING YEARS.

In continuation to my previous article being an economist I find its duty to present true and fair view of the state of affairs of the Britain exit. I will discuss broadly the depth of deficit and the how the hole of the deficit created during these years which pushed Britain to press the exit Button.  Do also remember that British Lions are all set to fight. The game of politics and economy  begins just like as Saudi Government threatened the US government that it will withdraw its investments if it name come up in 9/11 matter.   Well this time British lions are fighting among themselves and they are pretty strategized. World market will be going for many volatility phase and the British lions are well prepared to threaten on the Britain exit.

The latest threat which is being spoken is that how the voters could be squeezed and punished and how another round of referendum if possible could be introduced and even how the exit negotiation can be hardened. The big US banks — JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup and Morgan Stanley — have large operations employing tens of thousands of people in the UK. They are now preparing to shift some of this work to cities such as Dublin, Paris and Frankfurt. Barclays, Royal Bank of Scotland and Lloyds Banking Group, may also need to strengthen their European presence outside of the UK. So either you migrate or change or job.



 Britain exit will be a powerful lesson for the rest of the Euro zone countries and all the top leaders who took everything for granted taking the sovereignty after joining the EEC.  This situation is not due to the recessionary bubbles but more of the leaders who compelled over the last couple of years the Euro-zone member states to force fully accept many terms and mostly austerity measures.  Over the last 4 decades many things have been taken away with least focus on the member states. If we look into the history we find that Britain is only a fraction of the democracy it was in 1973. Prime Minister Edward Heath at that time took Britain, Ireland and Denmark to join in 1973, Greece joined in 1981, Spain and Portugal in 1986, Austria, Finland and Sweden in 1995. All these states are now struggling with austerity, high unemployment, followed with cut down on pension and other social securities. Those who are crying that it bad for the Britain to exit Europe, well fools should be identified to make the statements since clever people know the pains of austerity and social cuts. The country is facing a $42.3bn deficit by 2019-20 despite of stringent austerity measures.  The Government's tax revenues are rarely enough to fulfill its generous spending promises, so every year Britain runs a large budget deficit.

On average, the bonds that make up our national debt need to be repaid within 15 years. Interest on the national debt will cost over £42 billion this year. Majority of gilts are held by British institutions, it's worth noting that the amounts held overseas have risen sharply since 2003. Currently just over 35% of our national debt is owed to foreign governments and investors.  The below chart shows the data related to the national public debt has increased to 80% of UK GDP.


Many of my friends will say that Britain used to enjoy many things like protection for workers’ rights, such as guaranteed paid annual leave, paid maternity leave, security for the workforce when companies change ownership and the fair treatment of part-time workers. Well these benefits are of no use if there are no job which is practically ruling in Britain. If we look towards the decision making segment we find that most of the decisions bureaucrats in Brussels decide all key environmental, fishing and agricultural matters rather than the house of representative elected. The depth of economic slow growth of Europe is that only Antarctica has grown, more slowly than the EU economy over recent years. If we quickly look into the past we find that public sector cuts, the treatment of the disabled and the vulnerable through welfare cuts, and the privatization of the NHS lead massive problem for the state.  

Problem for the Euro leaders is that next time when they will sit together for any austerity measures they will play in good faith and will not kill a young generation where average youth unemployment is 50%. Every government has become slave to the top rich clients of every country. Today Britain has exited tomorrow Spain and other Euro countries will bear the torch. Policies and all investments have been decided where the rich will enjoy and all the hardships are being enjoyed by the middle class. The depth of the austerity measures was worst since the World War 2. It raises taxes, cuts numerous social benefits to millions, sheds up to half a million public-sector jobs, cuts budgets for government departments, and transfers the onus to create new jobs onto the private sector. Those who are saying that its worst for the Britain my question to them is remaining within should have been better to go for further more austerity.

Bureaucrats, fund managers and ULTRA HNI clients are least bothered and less affected by austerity measures. Remember these are the people who are raising more of the concern that exit of Britain is worst. If DAX, FTSE goes up and creates more new highs then economy is better according to them irrespective if the growth comes from Buy back of shares rather deploying the capital into job creation. The elder generation and young generation sit idle at home and due to no job stays at home do not affect Bureaucrats, fund managers and ULTRA HNI clients. Being an economist we have social responsibility which we should strictly adhere.

Exit of Britain will give immense freedom and inflow of new thoughts within the economy. New growth based polices and strategies of job creation will be adopted. The more interesting part is going to be how leaders like Angela Merkel are going to play their cards with the other Euro states. 

0 comments:

  © Blogger template 'Minimalist H' by Ourblogtemplates.com 2008

Back to TOP