BREXIT in a vacuum

For many weeks now after the surprising exit of England in the political activities and involvement of politics in EU, the vulnerability of EU economy is greatly affected in its circulation of the EURO currency inside EU countries and around the world.  Analyst and business academe are anticipating and forecasting as to how the world market will respond to the sudden change of political setup in EU were England plays a huge role in the whole economy of EU. Furthermore, EU members are in an inferior stance towards Russia in terms of politics, economics, and military power given the fact that some EU member countries are having a huge negative difference compared to Russia who is known of their emerging economic power and experienced military might and intelligence.  The big Apple (US) as well is in a big awe in terms of its relationship with England and their continued political and economic rapport with other EU member countries.  Probably, US business negotiations with other EU member countries will come to a halt mode were in huge research funding and businesses in Pharmacology for example will come to a “vacuum” not knowing what to do next.  The most affected project this time is the research and projects related to climate change.  Enormous amount of financial capital are invested in EU to create products and innovations that will lessen the worsening delimma of climate change.  But as a result of BREXIT many related ongoing research in EU that involves England and the US will be affected in terms of management and organization.  

Financial confidence of other regions of the world market will also weaken in perspective of EU economic market.  Stocks are affected negatively in real time right after the vote and the unanimous decision was given to the public from the legislative chambers in England. Moreover, Asian and the African financial markets are in a continued emerging financial status knowing that the shift of financial confidence is going somewhere in Asia and the Africa.  As far as I can remember what Mr. Marc Faber a twitter academic blogger friend living now in Changmai Thailand (running a financial academic blog http://www.gloomboomdoom.com/, Twitter: https://twitter.com/marcfaberblog) was always emphasizing that US economy is in a volatile situation that the financial market confidence is shifting to Asian Markets and other Emerging Markets.  Undeniably, the BREXIT that had happened will change the economic formation of the world and the future of the world economy.

Banking adjustments on the contrary is another issue that the governments involve in the BREXIT must adjust to the new rulings and other affected accounting and financial market policies that are deemed involve in the BREXIT package of economic relationship.  International banks are also in a vacuum situation not knowing what to answer to the financial reporters asking the future of EU and England.  Furthermore, banking adjustments involves not only to the policies and the flow of currency exchange but rather the most important part in the banking adjustments in the BREXIT event is the capital investment presently incurred within and other transactions outside EU member countries.  Those existing business financial market contracts that will extend up to five or ten years more will experience a halt and vacuum in its market operation continuation.  

Mr. Marc Faber

Likewise, bank lending in specific are being affected knowing that existing lending and investment transactions between England and other small countries in EU are interconnected in terms of the flow of financial capital and the existing business and marketing operations.  By itself, the effect of BREXIT along the inner supply chain of EU before and the BREXIT effect will totally change the whole supply chain interconnectedness both within EU and the world market.

SME’s on the contrary are the most affected in terms of the BREXIT’s new economic policies conceding the fact that SME’s economic and financial stamina to survive both local and international market are in a huge difference compared to the multinational firms.  Furthermore, SME companies are dependent to the government’s assistance both financial and International marketing negotiation between G2G affecting B2B and B2C.  As a thought, what will happen to the SME business in Europe and England? Do you think it will create another financial bubble that will identically the same with the US financial market credit crunch?

Per se, fiscal policy integration in specific must be given concern with the WTO and the IMF given that they are the international mediator in terms of balancing the financial world market.  Need not to say that BREXIT and EU must likewise adhere to the advice of WTO and the IMF to prevent further negative economic ripple across the world. It is inevitably known that Inflation will happen in a few months’ time both in England and the EU countries knowing that some consumer goods that are abundant in EU are in scarcity in England for example.  In a vice versa economic and supply chain of consumer goods effect inflation of consumer goods will probably happen and with the possibility of supplying affordable goods from Asia and other parts of the world to fill the void and vacuum of consumer goods in the country involved.

Finally, continued financial and academic market observance must be imposed to acquire the most robust data analysis for financial forecasting affecting the EU member countries, England, and the world market relatively.

Mr. Mario Draghi

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