Brexit - finacial predictions coming true already

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silmcoach
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Brexit - finacial predictions coming true already

Post by silmcoach »

Well, two weeks since the Yes vote for the UK to leave the EU. Thus far the financial predictions are beginning to crystalize. Most notably the UK Pound is at its lowest level since 2013, the price of petrol is rising because retailers buy in dollars which has risen 14% against the pound, and although there was a brief rally, stock markets are beginning to fall again as Property Funds are no longer allowing investors to withdraw funds.

Why did voters not heed the warnings? Well the counter arguments of the Leave Camp were, "the Banks caused the financial crisis in 2008"; "they argued that the UK should join the Euro which would have been a disaster": "the experts strongly supported the UK joining the Exchange Rate Mechanism which let to the worst financial crisis and recession since the 1930s." In short, few believed the financial warnings this time. What's the phrase, "Cried Wolf"?

From the SILM® perspective, not trusting the Brexit financial warnings (given repeated previous false warnings) makes perfect sense. Human beings learn from experience (MATERIAL mode), and experience had taught that the financial experts "usually get it wrong", and in fact, couldn't be trusted, because the Banks caused the last financial crisis. What the financial experts didn't do was acknowledge their previous mistakes first, then explain why this time their predictions could be trusted. This illustrates why branding, reputation, performance, are so critical to any business's long term success and why Volkswagen are spending billions to try and save their reputation.
silmcoach
Greatest wealth - happy heart, peace of mind :D

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