Brexit: the beginning of the end

Talking about game changers: Britain voted to leave the EU. It was not Greece, it was not Spain or Portugal, it was Great Britain that drove the first wedge between Europe. Is this the beginning of the end that everyone expected when Cyprus crashed? It was back in 2013 when the small country's entire banking system collapsed and money was confiscated from private bank accounts. What happened there is pretty much simple:  Cypriot banks screwed it, by lending money to Greece. When Greece economy began its debacle, Cyprus' banks doubled their bet and bought Greek government bonds, hoping on an EU bailout. Both countries, are still in bankruptcy, owning multiple GDPs as of today.

The crisis spread like wildfire to Italy, Spain, Ireland, and Portugal. And Germany had to save the day, against local population's will, by lending, and lending, and lending a bit more. The thing is, it was not just Germany, Great Britain was also backing up the ruined economies with money. And now… now the UK has said enough. The United Kingdom will no longer be bailing out troubled European countries. 

The UK has now two years, according to the article 50 of the Treaty of European Union, to negotiate the withdrawal with the other 27 members of the Union. Prime Minister David Cameron announced his resignation,  to be effective next October, as he was a firm believer of remaining in the EU, stating that " I do not think it would be right for me to try to be the captain that steers our country to its next destination."

Central Banks in panic mode

Worldwide Central Banks rushed to contain damage, but believe me, the world won't be the same after these. 

The Bank of England released a brief statement, that reads: "The Bank of England is monitoring developments closely.  It has undertaken extensive contingency planning and is working closely with HM Treasury, other domestic authorities and overseas central banks.  The Bank of England will take all necessary steps to meet its responsibilities for monetary and financial stability."

The ECB released quite a similar declaration, pledging to ensure price and financial stability. Also, EU leaders in joint statement, said that they regret the decision but they accept it and urged the UK government “to give effect to this decision of the British people as soon as possible, however painful that process may be.” They also added that there will be  “no negotiation” over a package of reforms agreed by EU leaders in February aimed to keep the UK in the bloc.

The Switzerland National Bank confirmed it has intervened markets after the EUR/CHF fell to a 1-year low of 1.0615, while in Japan, BOJ's Governor Kuroda BOJ's rushed to the wires to announce the Central Bank is ready to provide enough liquidity and ensure market's stability, while , Finance Minister Taro Aso said that they are ready to respond to "extremely nervous" market moves, suggesting somehow a possible intervention, if the yen keeps strengthening.

Now what?

Now, is the beginning of the end. The decision is irreversible. Not only Britain wants to leave Europe, but Europe wants the withdrawal to be as fast as possible, to leave this behind, in a last ditch effort to survive as a Union. If you ask me, they won't be able to do it, but well time will tell. 

In the meantime, the Pound will suffer the most, and the Euro will follow. Switzerland and Japan will embark themselves in exhausting and useless interventions. Gold will rise. And the world, the world as we know it will never be the same.