Headless chicken syndrome

In the quiet moments during the day while I'm working from home, when it takes 5 minutes to open or save a file, I've been listening to podcasts.  Always, after they download, the BBC money ones - and Kermode* - get queued to "Play next"**.   The money podcasts I listen to are:  Money Box, Money Box Live (a phone in mid-week edition of the show) and 5 Live Consumer Team with Martin Lewis.  

Over the last week, the on-going theme for all three of them has been Brexit and what on earth happens to our personal finances now.  The headless chicken appears to have taken over, with the most frequently asked questions boiling down to:-

1).  I was going to buy a house or remortgage but, with Brexit, should I wait?  What happens if I don't wait?  Will I lose all my money?  (Answer:  don't wait.  You need a roof over your head.  If your personal economics were right two weeks ago, ie you could afford the mortgage and you were sensibly fixing it for a few years, then nothing has changed.)

2).  I have money in the stock market, either directly invested, through a unit trust or a pension scheme.  The stock market fell after Brexit.  What do I do now?  I've lost "money".  Do I sell up?   (Answer:  the stock market moves all the time and is now back to the level it was at two months ago.  You haven't lost any money unless you sell, which is when you crystallise your paper losses.  (Incidentally, the market promptly bounced up again, that afternoon.))

Frankly, if the headless chicken continues, people will talk Britain into a recession, long before we even start the process of leaving the EU.  It will become a self-fulfilling prophecy.  It's a vicious cycle  People will sell their shares, causing a run on the stock market, crystallising their losses.  They'll then stop shopping and stop eating out because they feel poor, which in turn will mean less money coming in to local businesses, which in turn means they'll have to start laying people off and eventually may have to shut up shop, potentially defaulting on loans in the process.  That, in turn, will lead to landlords going bust, which means more loan defaults.  The banks will get stressed out and stop loaning money.  More unemployment leads to more people on benefits which also leads to less money being spent in the economy, which means more businesses going out of business.... And so on, and so on.

As things stand, we don't know what will happen re Europe.  My bet is on us joining the European Economic Area, a la Norway, which means that we have to sign up to almost everything except shared sovereignty, the common agricultural policy, the common fisheries policy and certain VAT, tax and tariff regimes.   All that is in the future, however, because the one BIG problem with Brexit is that no credible alternative policies were put forward by the Leave campaign, even by those who technically are still in the government. 

Into the void has stepped an awful lot of speculation and panic.  Last weekend, the only person talking any sense was Martin Lewis:  http://www.bbc.co.uk/programmes/p03znfs9 , with whom I totally agree.

If the headless chicken comes anywhere near me, he's soup!

- Pam

* The Kermode and Mayo Film Review, which is a download of the live, BBC Radio 5 program with anything up to another 45 minutes of them wittering on before and after the show.  I started listening to them broadcasting live on a Friday back in 2008, on my long 200+ mile drives home from Site.  Now, even when I catch part of the live show, I will also download and listen to the Podcast in order to hear all the extras.

**The Podcast App on the iPhone has this wonderful, on going ability to build a playlist.  You can queue "Play next" - and it will play immediately after the current podcast finishes - or "Add to up next", which puts whatever you are queuing to the back of your playlist.  

The aftermath

The best thing to happen to me in the last week, is that I went to Fracture Clinic on Wednesday and they gave me a boot!

I can now stand and walk without crutches!  I am mobile again.  Yay!  Can't drive until after my next Fracture Clinic appointment on 20th July, though.

The worst thing that happened?  Well, unless you've been living under a media blackout, you can probably guess what it is: Britain voted to leave the EU.  

Brexit.  What an absolute economic disaster. My fellow residents of the U.K. voted for a recession.  They voted for the Pound to tank against other currencies.  They voted for the price of petrol to increase.  They voted for inward investment to cease.  They voted for jobs and manufacturing to transfer to other parts of Europe.  They voted for food prices to double.  

Woah there!  I can hear my Australian and American friends going "Hang on.... Food prices to double?"  It doesn't sound comprehensible, does it?  The fact of the matter is that Britain has not been self-sufficient in food since before the First World War.  And I'm not talking grain.  Prior to WW2, Britain imported 60% of its fresh produce.  It still does. The vast majority of what goes on most people's tables comes from other parts of the EU.  Another slab comes from as far afield as Kenya (strawberries) or Egypt (potatoes).  Go food shopping in a supermarket in France or Spain or the Netherlands and you'll be hard pressed to find any produce that wasn't grown "in country" - the reverse is true here. 

Well, say the Brexitiers, at least we won't be wasting money on the Common Agricultural Policy, subsidising farmers to produce butter mountains.  It's an expensive waste of money, isn't it? Throughout the years I have lived in the UK, I have heard stories/complaints about the Common Agricultural policy:  the butter mountains; the inefficiencies (keeping small farms alive instead of allowing them to go to the wall and be absorbed into agribusiness conglomerations); the abuses (Italy claiming to have more land producing tomatoes than its entire landmass); paying farmers to leave land fallow (so that biodiversity is preserved), etc...  

I have always thought that they missed the point: the reason the Common Agricultural Policy exists in the first place is food security.  It was devised when the memories of the famines and food shortages that followed WW2 were fresh in people's minds.  People remembered starving. They starved before and during the War too.  Germany remembered the great inflation of the 1920's, when the price of bread could double within an hour.  France, Belgium and the Netherlands remembered starving during the War too, when the occupying Nazis employed the policy of feeding their war machine first, Der Vaterland second and the plebs third.  With starvation fresh in your memory, wouldn't you subsidise farming to ensure food security?

I fully expect food prices to double in the next two years. Mark my words.  It won't just be due to the Pound falling in value against the Euro, either.   Britain is dependent on Europe for most of its foodstuffs.  Right now, the other nations in the EU sell food to us on the same basis as they sell it internally - no tariffs; no additional taxes.  Now, they will have a choice:  sell internally to the other 26 countries, or put a tariff on and sell to the UK, who desperately want your food and are ripe to be milked...

Britain needs the EU far more than the EU needs Britain. 

- Pam