The Remainians love being negative about what might happen in the future. They should be asked more about all the damage their beloved EU has done to us, our jobs, industries and economy so far.
Let us take the case of the European exchange Rate mechanism. I wrote in 1989 why we should not go into it. I stated that the actions required under the scheme were “intrinsically destabilising”. I set out in detail how it would lead to higher inflation, more debt and more interest charges, which it did. I explained that the systematic undervaluation of the DM in the scheme would boost German exports at the expense of the rest of us. It did. I went on to subsequently forecast the recession that it finally induced.
The IMF, UK Treasury. Bank of England and World Bank supported this scheme and did not forecast the recession it generated.
Let us remember the case of the Euro. The good sense of the UK voters prevented the UK elite following the advice of the IMF, World Bank and other leading institutions to join this currency. I wrote a couple of books explaining the damage it would do. I pointed out “If you cannot devalue your currency when your costs are too high, you have to sack people and close factories instead. ..History shows that rigged exchange rates do not work. The Gold standard, pegging currencies to gold,bankrupted many businesses and caused mass unemployment. The Exchange Rate Mechanism caused a bad recession, and then collapsed. The single currency is an Exchange Rate Mechanism you cannot easily get out of.” I went on to show how the poorer regions of the Euro area would be worse off with high unemployment in the single currency.
I pointed out that the Cecchini Report promised us 3% extra growth from the 1992 single market programme. Instead in the two years of the introduction of the 1992 programme the UK was in recession, thanks to EU policies.
In 2007 none of the IMF, World Bank, UK Treasury or Bank of England predicted the forthcoming great recession, brought on by their policies. I wrote early in 2007 the following:
“There is considerable uncertainty in world markets about how far the Federal Reserve Board, the ECB and the Bank of England will go in raising rates to squeeze inflation out of the system. They must know there are huge pyramids of debt throughout the system, and inflation will not be killed unless the appetite for more debt is blunted. They must also know that if they push interest rates too high for too long they will bring the debt structures crashing down, as we have seen with the sub prime mortgage collapse in the USA, leading to falling asset prices, rising unemployment and even recession”
Apparently the Central Banks did not after all understand these points, and chose to switch from being far too tolerant of debt build up, to bringing the whole edifice they had allowed or created to come crashing down with terrible effects on jobs and employment.
These same institutions now ask us to trust them in their judgements on UK membership of the EU.
They all ignore two obvious points. The first is the stimulus effect of spending our own money in the UK on jobs and services here, at a time when the world economy is slowing again. They also ignore the point that the rest of the EU will not wish to impose tariff and other barriers in the way of their trade with us.
Project Fear has become absurd. It just serves to remind us how wrong its authors have been in the past.
As spending our own money will add 0.6% to our GDP, my forecast is for a small improvement in UK incomes and output from Brexit . Any short term confidence and market response will not be sufficient to offset all the positive effects of the extra spending and the reduced balance of payments deficit. The authorities seem to want lower sterling to help exports, and are clearly determined to try to talk the pound down. They should put into their forecasts the upside on exports if they put in the negative assumptions. There is a general slowdown this year so far in the main advanced economies which they need to address.