From The London Investment Alert (GREAT BRITAIN)-
There’s now just a week left until we collectively cast what is likely to be the most important vote we will make in our lifetimes.
As a longstanding eurosceptic, my mind was made up long before the current, increasingly vitriolic, campaigning began.
One of the most formative experiences of my career in the capital markets was experiencing sterling’s ethnic cleansing from the European Exchange Rate Mechanism (ERM) in September 1992. To recap, the UK had entered the ERM at what was, in hindsight, too high a rate. A “one-size-fits-all” interest rate policy across Europe was simply incompatible for economies experiencing such extremes as the UK, which was in recession at the time, and Germany, which was using high interest rates to counter the inflationary impact of its recent reunification.
Longstanding subscribers may appreciate that I have little time for most economists. Back in 1992 there was no shortage of hand-wringing, by most economists, over what an economic disaster our expulsion from the ERM would provoke. The reality, of course, was that the UK, in the aftermath of our brief and doomed membership of the currency union, and with the freedom to set interest rates at a level appropriate for us and not for Germany, subsequently enjoyed stronger economic growth combined with lower unemployment and inflation. I suspect that most economists are equally wrong this time round as well when they warn of the dire consequences that might arise from Brexit. Groupthink is a terrible infection of the human brain.