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On the 14th June 2016, VCL published its monthly note. This included the publication of VCL's CEO, Martin Wood's monthly comment, as well as this month's five resource stocks of interest, which can be seen on the Short Note page, plus a topical cartoon.

"So, last month I asked for advice on Brexit and what it could really mean for the UK.

Thanks for the feedback - it was thorough, but sadly left me no closer to clarity as my 'virtual straw poll' revealed pretty much a 50 / 50 split in opinions and the same in logical arguments. The things it showed me were:

Immigration is a canard and is really just closet racism. The UK economy needs immigrants and a net inflow of people is a sign of a strong economy so should be celebrated.

The worry of having to bail out the EU WHEN it goes bust is a false worry as the UK is explicitly not included in states that would be required to help in future bail outs and if the EU came back cap in hand that would be a) for the UK to decide and b) certainly a trigger for another referendum!

The worries about trade are false as the UK market is too important to the German mittelstand to be excluded / punished by Brussels.

So really it comes down to philosophy. Do we, as a nation want to get closer to the European model and accept the real costs and notional loss of sovereignty this implies or head off on our own (i.e. fall even more directly under the influence of Uncle Sam) with perhaps lower costs but just as much creeping threat to real independence and by extension sovereignty?

The European model seems to work best in terms of wealth distribution, it is less unfair than the Anglo Saxon model (to steal shamelessly from Piketty - In France the top 10% have 62% of wealth and the bottom 50% have 4% whereas in the US the top 10% have 72% and the bottom 50% just 2%). So, although useless at innovation and wealth creation, the declining spoils are at least reasonably well distributed under the European model. 

But the Americans - although terrible at dishing out the economic pie, do seem rather good at making new and bigger pies."

Martin

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