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June 26, 2016 | Tribalism

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

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Seth asks: “Are there concerns that Brexit is going to blow more air into the Canadian housing gasbag? Diverted foreign investment, delayed interest rate increases, suppressed loonie?”

Let us all pray this is the last post on Brexit. At least for this week.

For the record, UK voters have made a mistake of monumental proportions, based on bumper-sticker intellect, slogan politics, immigration fatigue and a profound anger at being ‘left behind’ in a world where so many others seem to be getting ahead. Mostly, though, it was tribal.

The Brexit vote was about us versus them. It’s the lowest common denominator of public life. This is what politicians appeal to in order to influence, then shepherd the masses into their camp. So, the campaigning was over sealing borders, protecting jobs, rebuilding walls around British society and promising mythical amounts of money for locals and natives instead of foreigners and immigrants. A slim majority bought it. And ten million people didn’t bother to vote, many thinking it was a done deal. Tribalism won.

Nationalism, protectionism, isolation, distrust of others (where there is no common bind) and, in a globalized world, less opportunity and an inevitable drop in the standard of living are not far behind. The disbelief and shock of financial markets – where every possible risk is continuously assessed and factored in – speaks volumes about the lunacy of the Brexit vote. Few thought UK voters would be myopic and daft enough to begin the process of financial and economic suicide.


The pro-Brexit comments – hundreds of them – which have flooded this blog in the last three days speak to the naiveté of the Leave side supporters. They suggest it’s  more important to stick a finger in the eye of authority, foreigners, elites, 1%ers, central bankers, the markets, free traders or perceived overlords than it is to look out for the best interests of their kids.

Brexit will probably bring less wealth to Britain, fewer jobs, reduced mobility, tougher trade and scanter opportunity. Leave side leaders were just as deceitful in this campaign – telling voters they could have independence and yet more money – as the Quebec separatists who in the last referendum claimed locals could walk away from the Canadian national debt, Canadian taxes and Canadian laws, but still use the dollar and get free health care.

Tribalism often and inevitably brings conflict, wars and misery. After a century in which 90 million people died in two world wars, thanks to borders, extreme nationalism and race, you’d think we would learn. Actually, we did. The freer movement of people, goods and jobs between national states has been a giant leap forward, ultimately making the planet wealthier, safer and more stable.

Young people get that. It’s estimated 75% of those under 25 supported the UK staying in the European Union. Polls show the Leave supporters were older, whiter, less educated and lower income. They are the ones feeling shut out in a globalized world where low-value-added work has migrated to lower-cost countries. They often don’t have the skills, education, appetite or balls to chase jobs in other European member states, to compete with more for their share of the pie. Old dudes also tend to be less tolerant of immigrants, yearn for the simplicity of a time now past and live smaller lives, closer to home, irritated at the change swirling around them.

The other day I said that as a cowboy I understood perfectly the maitre-chez-nous appeal of the Leave forces. Who doesn’t want to be in control? But as a financial guy, it’s insane. The pro-Brexit cheerleaders on this blog, especially Brits who immigrated to Canada for a better life and now laud Britain closing its border to others with the same aspiration, are hypocrites. The UK decision, arrived at after a campaign of disinformation and emotion, will go down as a political blunder for the ages. A Neville Chamberlain moment.

As for Seth’s question, beats me. But the world has stepped closer to a recessionary brink, where the last thing I would want is a big mortgage

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June 26th, 2016

Posted In: The Greater Fool

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