The Wake of Brexit Continues to Impact Global Markets
The world has never seen this before. June 23rd's vote for Britain exiting the European Union (EU), commonly known as “Brexit”, is the first time a country has ever made the decision to leave the EU. Voters took to the polls in what proved to be a tight race with the “stay” camp being slightly outvoted by the “leave” supporters. Over 33 million voters cast their ballot with 51.9% of voters opting to leave and 48.1% choosing to stay.
Arguments were strong leading into the public vote with influential individuals supporting both sides of the issue, such as the Prime Minister and former mayor of London. Speculation of the repercussions of leaving the EU was only curbed by the concerns of staying. As the votes were counted, the race was neck-to-neck but ended with the “leave” voters strong-arming the “stay” supporters.
So they decided to Brexit…what does this mean? There will be short and long-term effects from this decision, some of which are already beginning. Global markets in fiat, stocks and commodities have already seen significant volatility during overnight hours. David Cameron, Britain’s Prime Minister, has already announced that he will be stepping down after the vote – Cameron had been a strong supporter of staying with the EU Scotland’s First Minister Nicola Sturgeon, another figure who has been very vocal about being “absolutely determined” to have Scotland remain a part of the EU, has alluded that another referendum for Scottish independence from the U.K. will be likely to come – just two years after they voted to stay.
Projections for what would happen to the world markets if Brexit did indeed happen did not have a positive outlook as it would offset the checks and balances of many economic and financial systems. The vote comes at a time where several markets around the world are already teetering with levels of instability. At the close of the U.S. stock market yesterday, there was not as much concern about a Brexit happening as there had been earlier in the day. The success of the vote after predictions yesterday went back and forth proves that the current situation is unpredictable and volatility is to be expected.
Experts are saying that Gold will be the biggest benefactor of the Brexit as other markets will take a dive. The Euro and British Pound have already plummeted to lows not seen since 1985.
The times ahead and the negotiations for Britain to leave the European Union are uncharted territory and will be closely watched around the world. With the significant impact the vote has already had on the world markets, it would be worthwhile to keep a close eye on the current events and to ensure your investments are protected.
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