The Brexit Has Happened, Now Here’s How To Play It

The article originally was suppose to be “Why the UK must vote Brexit, and here’s how to play it,” but I’ve gotten so caught up preparing my own trades for this cataclysmic event that I didn’t have time to publish this article until 4am of the Brexit.

By now almost everyone knows what the Brexit is, but if for some wild reason you don’t I’ll sum it up in one sentence. It is the referendum put forth on whether the UK should leave the EU.

I have been following this very closely for months now. While I am an American, I pay a lot of attention to other political developments because I believe geopolitical developments have a great impact on my investments, and because they are usually very interesting.

Nigel Farage is the head of the United Kingdom Independence Party, and has been pushing for this referendum practically all of his political life.To see this referendum pass must be a dream come true for him. Farage is a huge Euroskeptic who has been fighting the centralized bureaucracy in Brussels for many years now. His brash and unapologetic style is refreshing and I have taken a liking to him over the past few months. His videos ranting in the EU Parliament are particularly amusing, once saying that the President of the EU had "all the charisma of a damp rag and the appearance of a low-grade bank clerk".

I truly believed that Brexit was going to happen because many of the people in the UK are fed up, and Mr. Farage has been actively campaigning garnering a lot of support. The Brexit voters were simply more determined than the Bremain voters. The torrential rain in the morning did not help the Bremain side, as many of the people voting to remain are millennials, and as we all know, millennials are inherently lazy. For the record I am for the Brexit, and if I were a UK citizen, I would have voted for it.

Here is why the UK had to vote Brexit in my view:

The remain camp continually said that 44% of their exports are tied to Europe so it's important they stay. That means 56% is outside the EU, and they don't have the same protections from Tariffs. While the EU is the world's largest common market, it only accounts for 17% of the world's GDP. That means that 83% of the world's GDP comes from outside the EU. Nigel Farage has it right that they will then be able to create new trade agreements with developing economies and their Commonwealth English-speaking allies like Canada, Australia, New Zealand, and then America.

With a net export status, the EU needs the UK more than they need them. No one is pretending it is going to be a magical transition. The first few years are going to be extremely difficult having to renegotiate trade, and the markets are going to react wildly. However, life is not about the short term, it's about the long term.

Immigration has increased tenfold in the last 30 years, and because of it, there is a lack of housing, and wages have been driven down. Decreasing both the number of incoming migrants and immigrants should reverse the trend of both wages and the availability of housing.

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I am long T, VOD, GLD, SLV and the US Dollar, and short the British Pound

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