Billions of pounds taken out of the British economy amid fears of Brexit
Investors are taking fright as the referendum nears
Investors are moving billions of pounds in assets out of British currency and assets ahead of the European Union referendum, new figures suggest.
Around £65bn left the UK or was converted into other currencies in March and April, the largest amount since the economic crash.
In the six months to the end of April, £77bn was pulled out of British pounds, compared to just £2bn in the six months to the end of last October.
The figures, published by the Bank of England, are consistent with investors worrying that the pound is due for a sharp fall should Brexit to occur.
Because financial markets are prone to collective panic, investors’ views are the main factor in determining whether the pound will actually fall. Any perception that a fall was about to take place could end up becoming a self-fulfilling prophecy.
In February, HSBC warned that 20 per cent could be wiped off the value of sterling were Britain to leave the EU. In May this figure was corroborated by the National Institute for Economic and Social Research.
From an economic perspective, Britain appears to benefit from immigration. Immigrants from Europe pay substantially more in taxes than they receive in benefits. And Britain appears to need more workers. Its unemployment rate is 5.1 percent. More revealing, the country’s employment rate, which records the proportion of people between 16 and 64 who are working, is 74.2 percent, the highest level since comparable statistics began to be tracked in 1971.
Central banks want debt based currencies because they are easily created. Consequently the currency in circulation and total debt drastically increase and prices follow, sooner or later. Compare the cost of medical care, college tuition, an ounce of gold, a gallon of gas, a six-pack of beer, or a week’s groceries today versus the cost for the same items in 1971. Massive debt, caused by politicians and bankers, also acts as a drag on economic growth. To create more growth the conventional answer is stimulus and more debt, which, at best, delays and aggravates the excess indebtedness problem. Bad policy produces bad results.
Indeed, 71 percent of German women and 83 percent of men between ages 18–24 live at home. Once they near their thirties, those numbers plunge—to 9 percent of women and 18 of men—but that’s because almost half of that demographic is married or cohabitating, compared to 31.6 percent of their American counterparts.
Investors are taking fright as the referendum nears
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