Brexit's extension means a lot of uncertainty for everyone. In this episode of Market Insights Coy Wells and Patrick Brunson discuss what this issue means to the average American.
Brexit: Extension & Apprehension – Video Transcription
Coy Wells: 00:00
Today, we're here with Mr. Patrick Brunson and we're going to continue our discussion in regards to Brexit and what it means here in the United States. If any of you are watching the news right now, we just saw that Brexit was extended and we're going to talk about what that actually means here in the United States and what it means for those overseas.
Patrick Brunson: 00:16
Right. So, the extension went out to May 22nd. Prime minister Theresa May was trying to get it pushed out until June, but they gave her basically till May 22nd and this time the EU stated that this is the last extension they're going to do. Theresa May has been trying to work deals where she can have her cake and eat it too, all while taking the UK out of the EU entirely. So, this is a big deal. If Theresa May doesn't come up with a deal that the EU can agree on by May 22nd they're gonna end up leaving the European Union with no deal whatsoever. And so they're really putting a lot of pressure on Theresa to really make a strong decision before May 22nd because she's not going to get another extension.
Coy Wells: 01:02
That's correct, and this is kind of something very similar that we saw take place with Greece when they started getting in financial trouble. This decision to exit is primarily because of the immigration issues. The other issue that is being discussed right now is that if they move away, the trade negotiations between the two countries is the real big issue, and that's kind of what Patrick's talking about in regards to getting her cake and eating it too. Separating is a big issue for those countries. So, if they leave the trade deal is the biggest deal of the issue. What is the likelihood of the United Kingdom and Europe if separating without a trade deal, what kind of effect would that have on them?
Patrick Brunson: 01:37
That's the million dollar question, and it's not necessarily what type of effect will it have on just them, it's the type of effect that it'll have on the United States. There our seventh biggest trading partner and if they get into a financial crisis, it's going to affect the United States dramatically, like we affected the European Union when we had our great recession in 2008. So, there's a lot that can come from this and we have to pay attention, the news isn't talking much about it at all here in the U.S. They're talking about it extensively overseas, but not much here. And so we have to really keep an eye on these things and what's going to happen between now and May 22nd because we may need to re-position our portfolios here in the U.S. proactively to prepare for that.
Coy Wells: 02:24
That's correct, and we also got notification that the banks just bought a lot of gold, about 651 metric tons. Do you think that has to do with stuff that's taking place inside the United States or you think a portion of it is a combination of the United States and the Brexit deal?
Patrick Brunson: 02:36
Here's the issue that I see. Right now, the European Union and the United States have currencies that are in jeopardy, and what I mean by that is their Fiat currencies, so they don't have anything backing it other than government promises, and if you have the rest of the world already dumping U.S. Dollars and euros, if this thing turns into a major financial fallout, it could be bad for both the United Kingdom, the European Union and the United States.
Coy Wells: 03:07
Fantastic news and great information.
Patrick Brunson: 03:09
Yup, click on the link below to download our latest report, the 5 Worst Things to Do with Your Money. You can also get a copy of all our other reports if you click on the link from our resource library. If you're watching us from YouTube, subscribe to our channel so you don't miss a single episode. For U.S. Money Reserve I'm Patrick Brunson
Coy Wells: 03:28
And I'm Coy Wells, and thank you for watching U.S. Money Reserve's market insights.
