Britain Leaves, Pound Drops, Cameron Quits

The UK voted to exit the European Union by 52%-28% or a difference of 1,269,501 persons at a 72% turnout. PM Cameron announced his resignation, which will likely materialize in October, possibly leaving the way for former mayor and staunch pro-exit Boris Johnson, who will handle the negotiations of the Brexit process.  Sterling fell 10% to its lowest level since September 1985, the FTSE lost as much as 7%, Dax fell 10% or 1015 points and S&P500 futures by as much as 5.5%. S&P was the first credit agency to warn of a possible downgrade of the UK's sovereign credit rating.

Gold finally broke out of its 5-year trendline resistance to hit a new 2-year high of $1358, while the yellow metal soared to the £1000 mark against the British pound, the highest in 3 years.

Now that the UK's trade agreements with the rest of the world under the EU will be void, UK trade lawyers attempting to renegotiate trade agreements with +50 nations are in for a rude awakening at the bargaining table, facing EU negotiators, who will not be making extra efforts to accommodate the UK's trade demands shortly after it has exited the club.

With regards to the myth that Britain could easily strike deals by World Trade Organisation (WTO) rules (which entails import tariffs), EU members will demonstrade resistance so as to discourage other nations from emulating Britain's exit, especially given the fact that protectionist feelings are likely to arise when dealing with a large economy such as the UK.

And to address that common misconceptio; Europe does not need Britain more than Britain needs Europe. 45% of British exports go to the EU while only 6% of EU goods go to Britain. Guess who needs whom? 

Finally, do you think non-EU nations such as China, Korea or Brazil would find the British market of 65 million consumers more valuable than the EU's 500 million? 

Carry on with the wrong facts at your own risk.