The Brexit was a major subject of discussion throughout the first half of the year -- and for good reason. With the UK leaving the EU, the economic implications could be massive. Nonetheless, after the vote, the concerns tapered off, and we started to see strong growth in the market again. Unfortunately however, this has changed, and with the concept of a hard Brexit in mind, the news could lead to a global market crash in 2017. Today, we’ll talk about what has changed, the concept of a hard Brexit, and why this could lead to global market panic as we move into the new year.
What Has Changed With Brexit
When the Brexit took place, it was concerning, there’s no doubt about it. However, the concerns surrounding the Brexit tapered. It was assumed that the negotiations surrounding the Brexit would be relatively simple, leading to continued trade between the UK and Europe. However, last week, that all changed.
On Sunday, Theresa May said that Britain would be moving forward with its divorce with the Brexit, and that it would happen sooner rather than later. In fact, she said that she would be invoking article 51 by no later than March of next year. While this was expected, the response was not.
In response to Theresa May’s comments, both the President of France and the Chancellor of Germany made their own statements. In their statements, they said that it’s important that the UK pays for their decision. Essentially, they urged other members of the EU to back them in insuring that there is a price associated with the divorce. Ultimately, the gist of the announcements can be summed up in 15 words that were uttered by France’s president, Francois Hollande. Here are those 15 words.
There must be a threat. There must be a risk. There must be a price…
Francois Hollande
Watch For A Hard Brexit
With France and Germany pushing to make the UK pay for their decision to leave the EU, we’re seeing comments surrounding the idea of a hard Brexit. The idea is that the negotiations will be so poor that EU nations will cut trade all together with the UK. If this was to happen, of course the economic implications of such a move would be massive.
This Could Lead To A Global Market Crash In The New Year
A few months ago, I started to notice some keen similarities between how things are shaping up this year and what happened last year. As a result, I started to make predictions that we would likely see another massive market decline moving into next year. With the Federal Reserve likely to raise rates in December, economic conditions seeming better but getting worse when looking at underlying factors, and an exploding market, it only made sense that things would fall apart.
However, in these predictions, I made it clear that I did not know the event that would tie the issues together, ultimately causing the crash. That is no longer the case. Considering the news surrounding the Brexit last week, I’m expecting that as we move closer and closer to the goal of March, fears will rise. At some point between January and March, fears surrounding the global implications of the Brexit are likely to lead to panic in the market, ultimately leading to massive declines.
What Do You Think?
Will the Brexit crash the market? Let us know your opinion in the comments below.