The Brexit is raising a lot more questions than we have answers at this time. Despite turmoil on the stock and fiat currency markets, there is no significant altercation to speak of. The so-called Brexit “fear’ has not materialized yet, albeit this could be a period of the calm before the storm. At the same time, the IMF is pointing at Deutsche Bank as the institution to send the world economy into deep recession. Brexit: Economic Calm Before The Storm
Fear is an odd creature, as it transcends borders of what people envision to be impacted by the Brexit . Financial woes are taking place, albeit less spectacularly than people anticipated Albeit the world’s central banks appeared ready for the Brexit outcome, they are not out of the woods just yet.
During the first 48 hours after the voting, the Pound Sterling lost a lot of value. The overseas market followed suit, and there were grave concerns regarding another looming recession. But ever since, international markets seem to be recovering. In reality, however, this is a calm before the storm, and its actual effects will become visible shortly.
Moody’s dropping the UK’s credit rating hardly came as a surprise. Unfortunately, the biggest shockwaves will take place in roughly twelve months from now, when the tallies are made. Time will tell if there is any mismatch in currencies or maturities, and more details will become visible as the deadlines approach. These repayment deadlines will expire in roughly one year from today.
Do not be lulled into a false sense of security, despite the signs of market recovery. We are far from “OK” at this point, albeit the first shock wave was absorbed with relative ease. The road ahead will only get bumpier every week. Moreover, whatever happens to the UK economy in […]
