No Deal Brexit A Disaster? Currency Markets Cry "Bollocks!"

Since the Brexit Referendum was announced in 2016, the legacy media has been full of the dire prognostications of the many trials and tribulations that would befall the United Kingdom should they actually up and quit the EU.

Despite the best efforts of the naysayers of Project Fear, Brexit passed with a healthy margin.

And still the naysayers kept up their drumbeat of depressive doomsday declarations.

Theresa May turned what ostensibly were relatively straightforward "divorce" proceedings into the stuff of tabloids, and then the naysayers felt vindicated. As her Brexit deal was voted down an embarrassingly three times, the naysayers gloated.

Then Theresa May resigned as Prime Minister, and on July 24, 2019, Boris Johnson moved into 10 Downing Street. How the narrative has shifted!

During the first five days of August, the Brexit headlines were talking up the "inevitability" of Boris Johnson having to negotiate a proper Brexit Deal, despite all his chest-thumping rhetoric, as this random sampling of news sources demonstrates:

• August 1, 2019: Senior MPs rubbish claim that Labour rebels would help Boris Johnson pass a Brexit deal
• August 1, 2019: Boris Johnson Loses First Election Test Against an Anti-Brexit Alliance
• August 4, 2019: Boris Johnson Dreams of a “Side-Deal” Brexit
• August 5, 2019: We need a Brexit deal – so why is Johnson indulging in cynical electioneering?

The conventional wisdom during those five days was quite definitely tilted towards there being a Brexit deal of some sort--either a revision to Theresa May's proposal, a Brexit delay followed by a deal, or Boris Johnson would whip up an entirely new deal at the eleventh hour to save the day and the country.

However, during the next five days, the tone of the news shifted. Slowly, perhaps even grudgingly, the legacy media conceded that Boris Johnson might not be bluffing after all, that he might actually push to crash the UK out of the EU in a "No Deal Brexit" on October 31st--the ultimate "Trick Or Treat" for All Hallows' Eve:

• August 6, 2019: EU now 'planning for No Deal Brexit as Boris Johnson has no desire to negotiate'
• August 7, 2019: The UK can't even have a proper constitutional crisis
• August 8 , 2019: Cut red tape to ease trade after no-deal Brexit, Boris Johnson told
• August 9, 2019: No-deal Brexit preparations 'top priority', Boris Johnson says
• August 9, 2019: Brexit: Boris Johnson accused of ‘breaking economy’ over no-deal threats as recession fears mount

The media is now more or less convinced that a "No Deal" Brexit will happen--and is uncertain whether or not it will happen on October 31.

With yet more vindication in hand, surely the Brexit naysayers are gloating over the Brexiteers as the markets begin to punish Britain for the folly of separating itself from Europe.....right?

Wrong.

The chart at the top is the changes in currency valuation, the Euro vs the British Pound, over the last two months (from 17 July to 16 September).  Notice how the Euro peaked on August the 10, at £0.93927? Notice how the Euro has steadily declined against the British Pound since that date? Even before the potential "Black Swan" events of September 14-15 (the Iranian/Houthi attack on Saudi Arabia's oil production facilities and resultant loss of half of the Kingdom's production capacity), the currency markets were shifting away from the Euro and towards the British Pound. This is the exact opposite of the movement one would expect if the currency markets were betting against the British Pound.

Intriguingly, the Euro against the US Dollar shows a similar peak on August 10, followed by a persistent decline, although in the case of the Dollar the shift is more erratic and more pronounced. While there may have been the beginning of a Euro recovery against the dollar starting in September, the aforementioned "Black Swan" moment appears to have squelched that bounceback.

When comparing the US Dollar to the British Pound, the two currencies were more or less moving sideways during August, and then the dollar fell against the pound starting on September 3, and only beginning to regain ground on September 14--quite likely a "flight-to-safety" reaction to the Iranian/Houthi attack.

Full Disclosure: I am not a currency trader nor a financial analyst, and none of this is to be taken as investment advice or guidance.

In business especially, actions always speak louder than words. The words of the legacy media have been that Brexit, and particularly a "No Deal" Brexit, will be a disaster for the UK. The actions of the world's currency speculators, who are literally betting fortunes on the next economic ripple within the worlds leading economies, has been in the past month a somewhat derisive "Bollocks!" (apologies to any actual British folk if I am using the colloquial expletive incorrectly). Currency markets are steadily bidding up the British Pound and bidding down the Euro as the deadline for Brexit draws closer; it may lack a certain dramatic flair, but it is nevertheless a solid vote of confidence in Brexit, even in the "No Deal" Brexit.  The Euro would not be steadily losing ground to the Pound if the currency markets had any misgivings about Brexit.

When China let the bottom fall out of the yuan during the last few days of August, I noted that while much was made of the yuan's fall against the dollar, very few financial commentators even noticed a seemingly synchronous drop of the euro against the dollar, despite the absence of any negative EU news at the time. At the time, I offered up the following conclusion:

The one thing that seems certain about the legacy media's prognostications about the state of the world is that they have the narrative all wrong. With respect to China and Europe, they have it provably wrong, which only begs the question what else do the chattering class "experts" have completely wrong?

There will be no final answers until November 1, if then, but, if the current currency market trends hold through October, we quite possibly could add Brexit coverage to the list of things the chattering class "experts" within the legacy media have gotten very wrong.

---

Note: the currency graphs are courtesy of xe.com and were obtained using the following search parameters at the time of writing:

• Euro to British Pound: https://www.xe.com/currencycharts/?from=EUR&to=GBP&view=1M
• Euro to US Dollar: https://www.xe.com/currencycharts/?from=EUR&to=USD&view=1M
• US Dollar to British Pound: https://www.xe.com/currencycharts/?from=USD&to=GBP&view=1M

Tommy Robinson Exposes The Dark Underbelly Of The GDPR: Censorship

Well, that didn't take long.

On Friday, 25 May 2018, the European Union's sweeping privacy-oriented General Data Protection Regulation (GDPR) went into effect. On that day, faced with sudden exposure to steep, even crippling fines for potential "breaches" of user privacy, many Internet and social media sites ceased or suspended their European operations, and "went dark" across the continent.

That same day, British activist and citizen journalist Tommy Robinson was arrested, and--in the space of less than six hours--sentenced to 13 months in prison for "breaching the peace", the charge brought on by his online reporting of the trial proceedings of a rape gang trial in the the UK city of Leeds. In the same proceeding that whisked Tommy Robinson off to prison, the court declared a media ban on all reporting surrounding Tommy Robinson, his detention, trial, and 13-month sentence. So emphatic was the ban that regular British media outlets such as The Independent have actually scrubbed their websites of news articles published immediately following his arrest. 

Note: The media ban was lifted a few days later, thanks to the efforts of the Rebel Media and others, although mainstream media coverage of Tommy Robinson's arrest and incarceration remains virtually nonexistent.

I am not going to comment on the propriety of his arrest other than to say that a number of notable citizen journalist, members of the so-called "alternative media", or "alt-media", have expressed a fair amount of horror and dismay, believing the charge to be essentially a manufactured one, one used with the specific and sinister intent of silencing a dissenting voice and critic of UK government policy. I am not in the UK, I am hardly an expert on UK law, so I leave the legal particulars of the matter to those more qualified in that subject than I.

Similarly, I am not going to comment on Tommy Robinson's activism. My opinion on his activism can best be summarized by Clark Gable's classic closing line from Gone With The Wind: "Frankly, my dear, I don't give a damn." Tommy Robinson is a man with a point of view and a political agenda, no more but certainly no less. His views can and should be investigated, critiqued, even criticized. That he should be heard is certain; more than that is a choice each of us should make in the privacy of our own conscience.

However, I am not going to comment on the propriety of the media ban and the efforts of the UK government to muzzle any and all mention of Tommy Robinson, his arrest, detention, and incarceration. Rather, I point out the complete lack of propriety, of respect for the principles of free speech and a free press that are essential to sustain any level of freedom in any society. It may very well be within the scope of UK law for the courts to declare Tommy Robinson a non-person; it is not within the scope of decency, of ethics, or of any respect for fundamental civil liberty. Whether or not Tommy Robinson is guilty of a crime, whether or not Tommy Robinson's political views or agendas are in keeping with the aims of either the British government or the British people, he is still retains the basic human right to be heard, as do those who would advocate on his behalf. That right has been summarily eradicated by the British courts.

Coincidentally--or perhaps intentionally--the Brussels diktat known as the GDPR is aiding and abetting this deplorable deprivation of civil liberty. British media sites of course are complying with the media ban decreed by the courts--and the stifling confines of the GDPR's "privacy" protections have ensured that few other media sites, mainstream or alternative, are available to give Tommy Robinson or his supporters the voice that is their due. The platforms that would otherwise be the natural vehicles for those voices are suddenly less available. Fear of the GDPR's onerous penalties and the fascistic EU bureaucracies charged with levying them is creating a great silence where the voices of dissent otherwise would be. Regulation enacted to "protect" Internet users has almost immediately been turned into a tool with which to silence them. The price of privacy, at least in Europe, is the cessation of free speech--indeed, the cessation of civil liberty itself.

To the avowed libertarian such as myself, this comes as no surprise. In all of human history, there are no examples where an expansion of government power produces an expansion of human freedom, and there are far too many examples where the expansion of government power produces an expansion of human misery. The regulatory power of government, being coercive rather than persuasive, flowing solely from the barrel of a gun, is by its very nature antithetical to individual liberty. Regulation which inhibits or controls speech is by its very nature a diminution of the free speech that is essential to the preservation of individual liberty in any society. As Thomas Jefferson is oft quoted as having said: "When government fears the people, there is liberty. When people fear the government, there is tyranny." The GDPR is tyranny.

Free speech matters more than the technical proceedings of a court. Free speech matters more than the particulars of any law in any one nation. Ultimately, free speech must matter more than technical concerns regarding privacy. Free speech is the essence of free society. It is the basis by which we have free markets. It is the cornerstone of free enterprise. When free speech is attacked, freedom and all the blessings thereof are diminished. When free speech is attacked, we are all diminished. Without free speech, personal privacy is rendered meaningless.

Giving up essential liberty for the preservation of privacy is too high a price to pay. No matter how noble the intentions used to justify the GDPR, the silencing of dissidents such as Tommy Robinson is too high a cost. And there is no denying that the GDPR is helping to silence Tommy Robinson's dissent, merely by making alternative platforms by which his dissent might be heard too risky and expensive a proposition to sustain. When news sharing sites such as Instapaper block European viewers, when online advertising firms suspend their European operations, the availability of platforms for dissenting voices--for those contrarian views essential for a thriving marketplace of ideas--is immediately reduced. The draconian fines and byzantine compliance structures imposed by the GDPR have the inescapable--and I dare say intentional--effect of winnowing and reducing platforms by which dissent of all kinds can be heard.

For the sake of free speech, for the sake of us all, Tommy Robinson's dissenting voice must not be silenced. Shame to the British courts for silencing that voice, and double shame to the Brussels bureaucrats who authored the GDPR for aiding and abetting that silencing. The Internet was created as a tool for communications, for the free exchange of ideas; the GDPR is the expressed intent of too-powerful bureaucrats to bring that exchange to an end, and for proof of that evil intent we need look no further than the silencing of Tommy Robinson. That is reason enough to denounce the GDPR. That is reason enough to call for its immediate and permanent revocation.