After Brexit, 9 Reasons To Be Bullish On Great Britain

Tyler Durden's picture

Authored by Daniel Stelter via Think-BeyondTheObvious.com,

Today Mrs. May finally officially announced Brexit and kicked-off the process of divorce from the EU. A disaster for Britain, according to officials in Brussels, Berlin and Paris. Really?

Rarely there is such broad consensus: The British voters made a huge mistake in voting for Brexit. The country will suffer for decades to come and deeply regret the decision while the EU and the Eurozone will continue to generate prosperity and peace for the continent. This view is predominant in the media of continental Europe and it is the key massage of its politicians, who fear nothing more than that other countries might follow the British example. Therefore the costs for Brexit have to be high and punishing.

Whenever there is broad consensus it is worthwhile to challenge it. Could it be, that the British end up much better off, than we think? Here are ten reasons why:

1.     No recession: According to experts from IMF to Bank of England Great Britain should already be in a deep recession. In case of a Brexit vote they projected a crash in the real estate market, a drop in consumer spending and a collaps of economic activity. In reality the economy grew faster then before. If the experts cannot predict the short term consequences correctly, how should they be right in the medium- to long-term?

 

2.     Good shock: The steep fall in the pound contributed to this positive outcome. This has the welcome effect of supporting exports and hindering imports, therefore kicking-off a rebalancing of the British economy, which ran a trade deficit of five percent of GDP before. Such deficits are not sustainable as we can see in the crisis countries of the Eurozone. Moreover the Brexit vote has initiated a process of modernization of the British economy just at the right moment. Lower taxes, more investments and a re-industrialization of the country can lay the basis for more growth in the future.

 

3.     Positive demographics: Latest by 2050 Great Britain will have the biggest population in Europe. Meanwhile the population and especially the workforce in most European countries will shrink at an accelerating speed. As economic growth depends mainly on the growth rate of the workforce and its productivity this is good news for Britain.

 

4.     Attractive for qualified migrants: The population growth is linked to immigration and the Brexiteers campaigned mainly on the issue of immigration. But contrary to the popular belief there are not necessarily anti-immigration, rather they want to introduce a systems similar to Canada to attract qualified migrants. This will become a major competitive factor when compared with the EU which has no such system and encourages immigration into social welfare. Not only will Britain have less issues with integration but also be more attractive as it will have a lower level of taxation.

 

5.     Leading Universities: Besides the world famous private schools Britain commands eight of the 100 best universities in the world. The EU (without GB) has 17 universities on this list, four of which based in Germany. World class universities will continue to attract the most qualified students from all over the world and Britain could like the USA leverage this talent to foster economic growth.

 

6.     Free Market tradition: A study by JP Morgan already showed before the vote, that the British economy has not so much in common with those of France, Italy, Spain and Portugal. It is more in line with Germany, the Netherlands, Sweden and Ireland. Consequently the authors concluded, that Britain would be better off outside of the EU as it would not anymore need to subsidize weaker economy. In addition the British have a tradition of a pro-free-market attitude which will make Britain ever more attractive compared to a EU dominated by socialist, redistributive and anti-market forces.

 

7.     Leading financial center: Whatever the hopes in Frankfurt and Paris, London will remain the global financial center. The competence will not move away and besides a few representative offices to fulfill EU-regulation not much more should be expected. On the contrary, a financial center with long traditions, its own currency and freed from EU bureaucracy might evolve into the new Switzerland of the 21. Century. A flood of money fleeing from the Eurozone in the coming years cannot be ruled out.

 

8.     Renaissance of the Common Wealth: Critics of Brexit ridicule supporters who dream of a return to the order of the Common Wealth, and rightly so. On the other hand, also given the changed stance of US politics it is not out of this world to imagine an Anglo-Saxon trading area including besides the US and the UK, Australia, New Zealand and Canada. Even the Scandinavian countries might be tempted to join such a club, especially if the EU and Eurozone continue on the current trajectory.

 

9.     Continued downturn in the Eurozone: Europe seems to head for a solid 2017. Nevertheless the fundamental flaws  of the Eurozone, notably unsustainable debt levels, a bankrupt banking system and diverging competitiveness remain unsolved – after eight years into the crisis! Add to this the complete failure of the EU to address the migration issue it is easy to conceive a continental Europe on path to another lost decade with significant political pressure building up. This will make Britain all so more attractive for those with talent and entrepreneurial spirit.

Of course the British economy has issues, notably the huge trade deficit, its dependency on the financial sector and its poor performance in educating broad sets of its population. On the wall of  the Brexit war room of the European Council hangs a cartoon based on the Belgian cartoon character Tintin. It shows a small boat in rough water on which the captain is firing up the flames. Title: Tintin an the Brexit Plan. The message is clear: the British have just sunk their own boat.

Another cartoon might be a better fit: the big European cruise ship has a broken rudder and a crew fighting each other. A small boat with good sailors is escaping the scene while the Germans look after it from the engine room with sad eyes.

When, after all, have the British really made strategic mistakes in the past decades?

Given the choice of putting my money on the ability to solve the challenges by the European union or the British, I would rather go with the Brits.

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aloha_snakbar's picture

Im 'long' for the girl wearing the flag...

SubjectivObject's picture

Yeah, where is she.

yet another ZH thumbnail tease

Ah now I see; good symbolic choice on multiple levels; Liz Hurley

https://www.thesun.co.uk/news/politics/1406969/brexit-backing-liz-hurley...

PrayingMantis's picture

... BREXIT movie coming out soon entitled, "Straight Out Of EU" (pronounced Eeeww) ... watch the trailer here >>> https://www.liveleak.com/view?i=0f1_1490760385

 

SoilMyselfRotten's picture

2 years of jawboning to come over this, awesome

Déjà view's picture

10. UK current account deficit from mid 1980s

Since the mid 1980s, the UK has generally had a persistent current account deficit. Essentially, the UK has been importing more goods and services than it has been exporting.

http://www.economicshelp.org/blog/5776/trade/uk-balance-of-payments/

Mikeyy's picture

Weird -  you could say 8 of those things about the US (not a weak currency) and yet the US is facing the end of the world, generally speaking, according to Tyler.

 

Wonder what's different here? /s

ipso_facto's picture

Reason 10: We used to have white people.

TDK's picture

Yup, a Neo-liberal Randian shitshow coming to destroy the common people and workers.  

 

More opportunity for the 1% to screw the rest of us

Paper Mache's picture

Damn right! Drinks are flowing here in my home tonight. Brexit party underway. Rock on! 

UndroppedClanger's picture

Popped the champagne at 12:20. Cheers!

moorewasthebestbond's picture

Leading Lying Climate-Hoax Universities... like East Anglia.

Jubal Early's picture

"3.     Positive demographics: Latest by 2050 Great Britain will have the biggest population in Europe."

What a joke.  The largest populations of parasite mulattos, west indians, and paki's.  Meanwhile the demographics of real englanders who pay the vast majority of taxes is sinking faster than the titanic.

CorporateCongress's picture

agreed, stopped reading right there. economic "growth" due to population growth is BULLSHIT. You need less people to share resources with, that way you have a higher living standard.

ThirdWorldNut's picture

Again agreed, plus AI/robotics will mean higher population => higher unemployment. Very soon too.

farflungstar's picture

No no no the imported monkey utopia will be just as smart and capable as the native Englanders they are replacing and it will in no way devolve into a 3rd world shithole like the places they left behind - diversity is our greatest strength!!! Magic dirt!!!

wisebastard's picture

I think Soros already made his money from it

taketheredpill's picture

 

What happened to UK GDP in the years following the Soros attack on the pound in 1992?

medium giraffe's picture

So long and thanks for all the fish back.

hooligan2009's picture

The British Parliament is replete with those that prefer libtard socialism to reality. A nations quality is demonstrated by its external trade position - the UK (and the US) fails on this front in that it cannot educate its population sufficiently to compete globally. As an example, products on shelves that could be made by domestic robots are made in the third world and imported.

Britains welfare system sponsors the welfare mentality across generations and the willingness of the population to put up with government (local and central) waste, inefficiency and fraud is shocking.

the disease of libtard socialism results in deficts that accumulate to debt - the levels of which cannot be lowered to ratinal levels unless and until the UK runs surpluses of 3-5% of GDP for twenty to thirty years. europe, the UK and Japan have followed the same political route of welfare based, libtard socialism (government taxes and spending involved in more than 50% of all GDP, rather than reducing the level of government involvement in peoples lives (to 20% or less of GDP).

brexit leaves britain with more control over its own affairs - problem is that libtard socialist thinking will dominate PArliament/Government until the government gets out of government and stops taxing people at 60% (income tax, VAT, national insurance, local taxes, customs duties etc etc).

 

taketheredpill's picture

 

 

Ever wonder why the drops in Euro or Yen were seen as extra good plus when the ECB and BoJ are conducting QE...but...when it happens to the GBP it's supposedly a disaster?

A 25% drop in your currency does wonders for GDP growth.

So even if GBP falls a bit more during Brexit negotiations expect the bottom in GBP the day the Brexit deal is finalized.

 

 

TimeIsTheFire's picture

Pah. The GBP started its decline long before the UK joined the EU and will continue to fall long after. There is no bottom in GBP (which can be said of some other currencies too, granted...)

Teja's picture

Exchange rate drops are like dextrose - short term, they give you extra power. Long term they make you fat and lazy. Italy and France, pre-euro, are good examples. The UK in the 1960's and 70's also was no industrial powerhouse any more.

Also depends on in which currency your debts are denominated. Your own currency - other peoples problem, for some time at least. Unluckily, next time people buy UK bonds, they will ask for higher interest.

So, on both counts, a currency drop does not really help. It is a symptom of weakness, not a means of long term economic improvement. Of course the local politicians will always tell you otherwise...

quasi_verbatim's picture

You ain't seen Brexit yet. Two years, you'll be dropping us food parcels, Spam and hardtack, no parachute required.

Stan Smith's picture

The biggest impediment to UK growth is the EU, not the UK.    I dont think it's going to be all peaches and cream either.    As much as the EU was created to create a "common market" amongst the EU countries,  its more to keep cheaper Asian and African products out.    Does it make any rational sense that the two biggest 'markets' -- the USA and the EU -- have the level of walls between them that they do?

If its right or wrong, only time will tell.    I'd bet on the place they're pining for freer markets as opposed to the one looking to avoid them every time however.

gaoptimize's picture

10. Demographically doomed to become an Islamic shit hole.

walküre's picture

+1

That's all that really matters in the next 25 years. The Brits are slow at figuring this shit out.

Biggest piece of real estate in central London is owned by Arabs. Close to Buckingham.

Soon more and bigger mosques in the UK than anywhere else in the Western world.

UK NHS and welfare bleeding dry.

Blimey, they're screwed. In or out the EU didn't matter.

TimeIsTheFire's picture

+100 on NHS mention. EU or not, it was always going to be the NHS that will bring the UK to its knees. Spending is up ten-fold since inception even after adjusting for inflation. A blind man on crutches can see that this won't work for too much longer.

katagorikal's picture

but where did he get his crutches?

falak pema's picture

Thats what happened to Rome; it became an Empire and invited the Barbarians into the gates to save itslef from itself!

Trump is on the same road as is May.

And Nero said "out with those Christians"; too little too late. 

The Barbarians ate the Empire.

 

orangegeek's picture

11.  The vast majority of women are heavy drinkers and easy to nail

walküre's picture

soon the vast majority will be in hijabs or burkhas

the whites died off with liver diseases or lung cuncer

paddycomeback's picture

No. They think they are m

Making Merica Great Again's picture

I'd like to be bullish on cheap brit whores.

Bockerglory's picture

It is all about economies of scale. Too big, the economy becomes too big to fail and cannot reform. Too small, the economy had very few bargaining rights and needs to join up with a bigger trading partner. 

But just like Goldilocks & the 3 Bears, Britain is just the right size not too big & not too small.

EU has to reform & will have to change. Germany had not been a democracy for very long and puts economic stats before individual freedom. Economies only grow when individuals are free to accumulate most of their earnings, take risk, some fail & some succeed. Low tax is key. Germany can not really do freedom as it does not accept that people are free to make mistakes & patriotism can be very healthy in building communities (without the govt acting as a surrogate family).

 

 

walküre's picture

England will never have half the democracy that Germany already IS.

Germany had not been a democracy for long...

The UK is still owned by the feudals and they make most of the politics. Democracy my ass.

Only ray of sunshine was Nigel Farrage, who by the way left UKIP right after the referendum. Like WTF?

Germany has special interest groups and lobbies just like anywhere else. Only Switzerland is better with a more direct democracy.

There will be a referendum in Germany at some point when AfD gets min. 20% in the federal elections this year. If not this year, then in 4 years.

Germans are pissed at all this bullshit their elected reps have put them through.

Teja's picture

Dream on. Alt faul Dumm won't get more than 10%. Nobody wants to see the spectacle of pensioners who can't decide if they are anti-semitic or anti-islamic, and who prefer infighting to political work.

Bockerglory's picture

It is all about economies of scale. Too big, the economy becomes too big to fail and cannot reform. Too small, the economy had very few bargaining rights and needs to join up with a bigger trading partner. 

But just like Goldilocks & the 3 Bears, Britain is just the right size not too big & not too small.

EU has to reform & will have to change. Germany had not been a democracy for very long and puts economic stats before individual freedom. Economies only grow when individuals are free to accumulate most of their earnings, take risk, some fail & some succeed. Low tax is key. Germany can not really do freedom as it does not accept that people are free to make mistakes & patriotism can be very healthy in building communities (without the govt acting as a surrogate family).

 

 

holgerdanske's picture

http://i.dailymail.co.uk/i/pix/2016/06/22/23/358FFCD100000578-3655400-im...

 

Go girl, GO!

And Beckham that twit was in favour of remaining.

 

So glad Liz got the most votes!

falak pema's picture

re, this is triple crown dystopia

falak pema's picture

Trump and May; the rancid remains of the day of Reaganomics and Thatcherism....

Watch the dominos fall !

MrSteve's picture

and how's that demonetization going for everybody back on the sub-continent? Got anymore great leap forwards planned? maybe some five year plans?? how about an old fashioned cultural war??? the world just can't get enough of third world totalitarian planning.

falak pema's picture

Hey buddy, the shoe is on the OTHER foot : Its Pax Americana that calls the shots; BADLY.

So dont gripe about the fall out of Pax Americana now in total tail spin.

The totalitarianism is in America; its is like Marie Antoinette, under the Duck : I want my cake and I want to eat it!

Don't blame the inevitable reset in the OTHER world once the Empire goes into tailspin.

You can't have it both ways.

 

falak pema's picture

today the solution is to not repeat the past : to not accept the barbarian vs the civilization conundrum.

The Barbarians are 'US', the so called civilized, in fact the corrupt;  and the solution is to forget the past paradigm; like during the Enlightenment.

Onward, one humanity.

Invent the future based on a new paradigm and dump the past.

MrSteve's picture

it's nice to see you doubling down on Brave New World totalitarianism, you get extra points for consistent cruel insanity towards others

falak pema's picture

Haha ! 

I don't run the 1% cabal dummy! 

I aint Master of the Universe. I am the contrary.

Itch's picture

Deregulation? No?

Salsa Verde's picture

I wanted to see a larger picture of the girl wearing the flag!