Sunday, May 7, 2017

An observation on Brexit

The UK somewhat joined the EU in 1973. I say somewhat because they never surrendered their sovereign currency, the GBP, like all the other smaller players of the EU had to.  It's now 2017.  So they have been in this club for 44 years.  During these 44 years, what has been so different than in the prior 44 years?  In a word, nothing.  It's been business as usual as long as there has not been war.  So it is pretty clear that the EU does not add any economic value.  It is just another layer of bloated management running around acting like they are controlling everything.

The current Brexit discussions between UK's Theresa May and the nannycrats at the EU are focusing on one thing and one thing only: what is the bill that should be paid for Brexit.  This is what everyone is talking about.  What they should be talking about is why there is a bill to be paid at all!

The EU was supposed to be like a company with all participants participating in the growth.  You would think that after 44 years of labor that there would be some value add associated with this collaboration.  I mean, if there is no net benefit of tangible nature, why participate?  So the real question should be what is UK's payout?  In other words, how much should the EU pay the UK as an exit payment.  When someone leaves a company he should get a cash out payment equivalent to his ownership of the venture.

Unfortunately, that cash offer is negative 60 billion pounds.   In other words, EU, inc. is not profitable.  It has a massive debt which the EU leaders want the UK to help pay for right now if it will not be there to pay in the future.   So not only was the venture not profitable, it was a debt trap.  The UK is certainly going to leave the EU and the only way it is going to pay anything is if someone forces them to at gun point.  In other words, settled by the supposed debt can only be settled by defaulting on it or by war.  There is no way that the EU is going to war against the UK because it would draw in Big Brother USA and if that turns into WW3 then China will end up king of the world as everyone else kills each other off.

So the UK will just walk away and there is not a damned thing that the EU can do about it.  But for those who are left in the union, they have to understand that if the EU says UK owes 60 bn lbs and the UK doesn't pay then that is 60 bn lbs of debt that all the remaining players must sign up to own in addition to their own share of negative equity that has been earned by participation in the EU Ponzi for the last 44 years.

It should be abundantly clear at this point that none of this will end well.

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