By Gaalen Engen, Stockhouse.com
It is doubtful David Cameron ever really wanted the Brexit vote. Back in 2013 he was head of a minority government, dealing with a fractious Conservative party and an aggressive UKIP which threatened to divide the party even further. He dropped the mic in January of that year on a promise to hold a referendum on whether Brits should remain in the EU. Perhaps at the time it seemed the safest card to play. It wasn’t a stellar term for the prime minister and polls were tight for the upcoming election. At best, he would be the head of another minority government and as such would never have the power to make good on the promise. Then he won a majority election in 2015…oops.
His foot firmly stuck in it, Cameron had to come through. He immediately changed his tune, however, hoping to head off this colossal mistake at the pass, but the fire had been set and the flames kept climbing until last Thursday’s vote. Both the “Leave” and “Remain” campaigns slugged it out and both took liberties with the facts, but the Leavers slung a little more crap and managed to motivate voters, mostly rural and older, to get to the polls and make their voice heard. And on Friday morning, much to Cameron’s chagrin, that voice said, “We’re outta here.”
Markets freaked out. People freaked out. I’m betting Cameron freaked out. He had authored the end of his own political career, dealt a critically damaging blow to his party and could have quite possibly pulled the pin on the EU. No matter what some fanatic Leavers say, the near-term for England doesn’t look good. There’ll be decreased foreign investment and less jobs – their GDP is going to take a serious hit. In fact, according to the National Institute for Social and Economic Research, a think tank, Britain’s GDP is expected to drop 2.9% over the near term.
England won’t be the only one feeling the pain, the EU is going to hurt with Britain out, but when push comes to shove, the degree of discomfort for the EU could be *fingers crossed* survivable. The problem now is France and Greece. Will this Brexit insanity grow into a Frexit and Grexit? Could this all spin out of control and as some extremists predicted, bring on a global depression?
All that’s certain at this point, is uncertainty. There’s no real safety in currency at the moment, the markets are addled and the analysts are divided. Probably the one thing people can agree on is the rising price of gold, good news for a mining industry that was living on red buttons and good looks since 2011 when the commodities market started to tank.
Junior miners like Aldershot Resources (ALZ.H, Forum), currently developing its highly prospective flagship Haultain Gold Project located in the storied Abitibi Greenstone Belt, have been watching all of this unfold closely, in fact, company CEO, Jeremy Caddy had this to say, “Uncertainty and the gold price are like kerosene being poured on smouldering tinder. As long as markets wonder how Britain’s leaving the European Union will work out we have uncertainty; as a result, the price of gold will continue to appreciate. Aldershot would far prefer political stability than the present state of uncertainty but it is an ill wind that brings nobody any good so we will take the good breaks when we can.”
Eric Owens, CEO of Alexandria Minerals (TSX: V.AZX, Forum), a junior miner exploring and developing one of the largest properties in the prolific Val d’Or, Quebec, gold mining district, affirmed, “Clearly the uncertainty of what the Brexit vote means a strong interest in and demand for gold, as we don’t know yet how the outcome of the vote is going to play out. When superimposed on broader supply-demand issues, this will have a positive impact on gold-focused companies like Alexandria Minerals which will be good for the gold industry.”
If you’re a gold bug, or think you may be one, you might want to consider this. Any post-Brexit re-negotiation between Britain and the EU will be years in the making with no guaranteed outcome. Also, any political fallout, such as the destabilization and dissolution of the EU, will also be years in the making. Then there’s the fate of Scotland and Ireland now that Britain has bid a not-so-found adieu to the EU.
All of this uncertainty is most likely going to last and gold will probably get a good run because of it. Now I’m not dancing on Cameron’s political grave, nor do I have a callous disregard for the profound effect Brexit will have on a global economic community, but if the world is going to take a trip on the crazy train, investors should have a safe place to put their money and right now gold is shining brighter than ever.
full article: http://www.stockhouse.com/news/newswire/2016/06/27/what-can-we-expect-from-brexit-blunder
FULL DISCLOSURE: The opinions expressed herein are the author’s and don’t necessarily reflect those of Stockhouse Publishing or any of its employees. Alexandria Minerals and Aldershot Resources are Stockhouse Publishing clients.
Read more at http://www.stockhouse.com/news/newswire/2016/06/27/what-can-we-expect-from-brexit-blunder#CjzColxMm2L2iflV.99
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