Tim Price did a conference call last week with Dan Denning.
They covered a wide range of topics, from how much gold to own in your portfolio, to the state of government bonds, to the ups and downs of the Japanese stockmarket.
But we’re sharing Tim’s thoughts on the topic du jour – Brexit…
“It’s not 500 years ago. We’re not at war with these people.”
Dan Denning: Tim, I asked you at a Roundtable discussion back in December if you thought that Britons would vote to leave the European Union, and whether that would contribute to volatility in the share market, or any other investment angle. What are your thoughts now?
Tim Price: I’d have to concede that the likelihood is probably higher now than it was back in December. And one of the factors that will be driving that is, clearly, the way in which the whole migration crisis has spiralled out of control as well.
I must admit, until recently, I hadn’t given thought to the idea that if the UK did vote to leave, then that would actually lead, potentially, to the break-up of the EU as a whole. And I think that is a non-trivial risk.
As a topic, it’s a bit like gold. The EU does also tend to polarise people, so I’m not sure you can get any kind of objective view. I feel quite straightforwardly about it. I mean, I was a tiny child when the UK was first asked whether it wanted in or not, and we were also asked whether we wanted to be part of a trade bloc. We were not asked if we wanted to be part of a political union, which is clearly the direction of travel for the EU as a policy.
So, having never been asked, realistically, whether I had any skin in the game, I’d like to have the right to vote against it now. And I think the whole thing is just a diabolical mess.
I make no bones about it, I’m furiously anti this project. It looks to me like nothing more than a gravy train for a whole bunch of unelected Brussels-based bureaucrats. No one voted them in. They’re paying themselves a fortune. They’re tangling the whole eurozone economy up in red tape. It seems to be benefiting virtually nobody except those same bureaucrats.
I have not seen any credible response from the “Stay” campaign as to why the whole thing is so compelling. I just think we’re going to save, over time, a huge amount of money by not being part of it. And I also happen to think that, from an economic perspective, the eurozone project itself is doomed to failure and that the sooner we get out of it, the sooner we are not even associated with it, the better.
Also, the scare tactics that people are resorting to are really pathetic. It’s as though the sky is going to fall in if we leave. And I cannot believe that.
We’re a major economy. We’re certainly a major economy relative to most of the countries in the eurozone. The idea that they will stop trading with us simply because we leave this now expressly political project, I just find nonsense.
And yet that’s what we hear from all the Chicken Littles out there saying: “No, no, we’ve got to stay because if we leave then, you know, they will shun us. Nobody will talk to us anymore.”
I mean, you know, this is a modern economy. It’s not 500 years ago. We’re not at war with these people.
Dan: Yes, and we can get red wine from South America if we have to.
Tim: Exactly. And some of us already do, I might add.