The United Kingdom is a Month From a Hard Brexit and It Could be Devastating for the Global Economy
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The United Kingdom is a Month From a Hard Brexit and It Could be Devastating for the Global Economy

I have been amazed at the US stock market’s ability to move up so dramatically in January and into the first part of February.

The US media – even the financial media – has grown tired of reporting on Brexit. Aside from a few headlines, such as Mark Carney, the Bank of England’s governor, recently sounding the alarm on the risk to the UK of a hard Brexit, the events have fallen out of the media.

I do not agree with everything in this video. In particular, it fails to mention the role of Russian interference in the Brexit vote and the Russian connections to Nigel Farage, Boris Jordan and other key Brexit supporters. Yet, I think that the video is a great primer on what has lead to Brexit and the cliff that we may be quickly heading towards.

More importantly for investors in US markets, it is vital to understand that the implications of trade being interrupted and its terms being suddenly recast between the UK and the remaining 27 EU member nations are extraordinary.

A recent NY Times article underscored how seriously the economies of Germany, France and the rest of Europe will be impacted. The truth is that we live in a global economy. The UK and Europe are key markets for the US, and Brexit imperils the continued expansion of the US economy.

As we get closer and closer to the hard deadline that is just 6 months away, it is very possible that the US markets can turn towards their Christmas eve low.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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