Beyond Brexit – More Earthquakes on the Way

26.09.2016 • Investing

From Jim Rickards – Port Phillip Insider (Australia) –

On Monday, 20 June 2016, I stood in the London Eye Ferris wheel. I was just across the Thames from the UK Houses of Parliament, standing with a film crew to record an urgent warning. I said that the Brexit vote, coming just three days later on 23 June, could produce a financial earthquake.

I recommended the exact strategies to avoid losses and to profit from the catastrophe to come. These strategies included shorting sterling, buying gold, and increasing cash allocations so our readers could ‘go shopping among the ruins’.

I wish that were the end of it, but it’s not. New earthquakes are coming soon, as part of the Brexit aftershocks.

By now, you’re familiar with the basic outline of the Brexit story. On 23 June, UK subjects voted, by a 52% to 48% margin, to leave the European Union. Markets had clearly priced for a ‘Remain’ victory.

The result was an instantaneous and violent repricing. Gold gained over US$40 per ounce, stock markets fell 4%, sterling crashed almost 10%, and the euro sank 4% all in a single day. These are large percentage moves for a full year. To happen in one day is the financial equivalent of a 7.0 earthquake on the Richter scale.

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