George Soros warns of "Brexit Black Friday"

Umfrage zum Brexit: Wovor fürchten sich die Briten?

Billionaire investor George Soros is issuing a stark warning if Britain would vote this week to leave the European Union. He says Britain leaving the E.U. would lead to a currency and stock market disaster. Newslook

Hungarian-born U.S. magnate and philanthropist George Soros attends an economic forum in Colombo, Sri Lanka. on Jan. 7, 2016.(Photo: LAKRUWAN WANNIARACHCHI, AFP/Getty Images)

LONDON Billionaire currency trader George Sorosbelieves a British vote to leavethe European Union could severely damage living standards andtrigger a plunge in the British pound bigger than on Black Wednesday nearly 24years ago.

Writing in an opinion piece for theGuardiannewspaper on Tuesday,Soros saidthe pound could fall by at least 15% and possibly by more than20%. When Britain crashed out of the European Exchange Rate Mechanism in September 1992,the currencylost 15% of its value. Britain"sreferendum on EU membership takes place on Thursday and the results are expected the following day.

I would expect this devaluation to be bigger and more disruptive,"said Soros, adding: "To start off, (the pound) is almost certain to fall steeply and quickly if there is a vote to leave."

TheEuropean Exchange Rate Mechanism was a financial system used to reduce volatility in exchange rates. At the time,Soross Quantum Fund bet that the British currencywas overvalued against Germanys Deutsche mark currency, forcing the British government to pull the pound out of the system. He made a billion-pound profit, or about $1.5 billion. The incident happened on a Wednesday.

Soros said a fall in the pound in the event of "Brexit" a British exit from the EUwas unlikely tobring a rise in manufacturing exports,whichhappened after 1992.

If (the pound)fell to this level, then ironically one pound would be worth about one euro a method of "joining the euro"that nobody in Britain would want," he added.

Britain"sJustice Secretary Michael Gove, a prominent campaigner for the "leave" campaign, said Soros had been wrong before.

If economic forecasters were as reliable as doctors or airline pilots then wed all be billionaires, he told BBC radio on Tuesday.

Speaking on London radio station LBC on Tuesday, Boris Johnson, also of the "leave"campaign, said he wouldapologize to the British people if the country votes for Brexit and there is a recession.

Prime Minister David Cameron urged Britons to vote to remain in the bloc in a speech outside his headquarters in Downing Street, two days before the referendum.

Saying "Brits don"t quit," heappealed to older voters considering voting for Brexit, telling them to think about the hopes and dreams of your children and grandchildren.

If we vote out, thats it. Its irreversible, he said

Meanwhile, soccer star David Beckham announced his support for remain in a statement Tuesday.

We live in a vibrant and connected world where together as a people we are strong, he said.For our children and their children we should be facing the problems of the world together and not alone."

A poll by market research firm Survation for spread-betting company IG published Tuesday said 45% supported "remain" and 44% supported "leave." Anotherpoll byYouGov forThe Timesnewspaper published late Monday said42% would vote to remain,44% would vote to leave, and9% didn"t know.

It came after twopolls published over the weekend suggestedthat support had swung back toward remaining in the EU.

Global stocks rallied Monday as investors reacted to the polls that showed "remain" was gaining momentum. They were up again Tuesday over optimism that Britain will stay in the EU.

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Source: http://www.usatoday.com/story/news/world/2016/06/21/george-soros-warns-brexit-black-friday/86168172/

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Brexit Vote in Balance in Polls as Soros Warns of Pound Plunge

Britain debates membership in EU before Brexit vote

Britains referendum on European Union membership remained too close to call two days before the vote, with separate polls showing leads for both sides and billionaire investor George Soros warning of a slump in the pound should voters back a so-called Brexit.

A YouGov poll of 1,652 voters for the Times newspaper published late Monday showed Leave at 44 percent and 42 percent for Remain, while a survey of 800 people by ORB for the Daily Telegraph had Remain at 53 percent and Leave at 46 percent once dont knows were stripped out.

Brexit on Bloomberg:

The pound held its biggest two-day advance against the dollar in more than seven years as investors bet that momentum in the countdown to Thursdays referendum was swinging in favor of Remain. Soros, who made $1 billion betting on a devaluation of the pound in 1992, warned that the possibility of the U.K. leaving the EU is still a real risk that could cut the currencys value by a fifth.

I want people to know what the consequences of leaving the EU would be before they cast their votes, rather than after,Soros wrote in the Guardian newspaper. It is reasonable to assume, given the expectations implied by the market pricing at present, that after a Brexit vote the pound would fall by at least 15 percent and possibly more than 20 percent.

Click here for a guide on what to look out for on the night of the vote count

Prime Minister David Cameron referred in a Twitter post to Soross sobering warning, even as pro-Brexit Justice Secretary Michael Gove ridiculed the billionaires comments. If economic forecasters were as reliable as doctors or airline pilots, then everyone would be a billionaire, Gove told BBC Radio. The truth is that economic forecasters like George Soros have got things wrong in the past.

The Brexit referendum is being monitored by governments, politicians and investors around the world amid concern a vote to leave the EU could set an anti-establishment precedent and heighten global instability. The final big set-piece before the referendum is scheduled for Tuesday evening, when former London Mayor Boris Johnson and his pro-EU successor, Sadiq Khan, take part in a BBC Television debate at Londons Wembley Arena.

Cameron defended his pledge to cut net immigration, a key issue for the Leave camp, telling ITV there are good ways of controlling immigration, and my welfare break, saying that people who come and work here have to work here for four years before they get full access to our welfare system, thats a good way, but pulling out of the single market, wrecking our economy, that is a bad way.

Cameron and Chancellor of the Exchequer George Osborne are stressing the risks to the British economy of a Brexit, while Leave campaigners such as Gove, Johnson and Nigel Farage are focusing on immigration and the chance to take back control of the U.K.

Bookies Odds

Bookies and gamblers are increasingly convinced that the U.K. will opt to stay in the EU. Ladbrokes Plc said late on Monday that the odds on a Remain vote had shortened to a 2/7 chance, indicating a 74 percent probability. Some 95 percent of all referendum wagers in the previous 24 hours had been placed on voters rejecting Brexit.

As far as the moneys concerned, it looks like Brexit is beginning to fall at the final hurdle, Jessica Bridge, a spokeswoman for Ladbrokes, said in an e-mailed statement.

More businesses pleaded for Britons to stay in the EU and warned of the cost of leaving.Hong Kongs richest man, Li Ka-shing, chairman of CK Hutchison Holding Ltd., stepped up his calls for Britons to vote Remain in an interview with Bloomberg Televisions Angie Lau.

If Brexit happens, it will be detrimental to the U.K. and it will have a negative impact to the whole of Europe, said Li, one of the U.K.s biggest investors. Thirty-four leading French companies published an advertisement in British newspapers headlined: Sil vous plait, amis britanniques remain! (Please, British friends, remain!)

Nouriel Roubini, chairman of Roubini Global Economics, said on Twitter that Brexit could stall the U.K. economy and tip it into a recession as the shock to business and consumer confidence could be severe.

David Beckham, the former England soccer team captain, became the latest celebrity to support Remain. For our children and their children we should be facing the problems of the world together and not alone, Beckham tweeted. Cameron swiftly seized the endorsement, tweeting in turn that he was delighted.

Turnout Crucial

A survey of 1,632 voters by the National Center for Social Research between May 16 and June 12 found a lead for Remain by 53 percent to 47 percent. The team contacted voters online and by phone, in line with recommendations after the failure of pollsters to predict the outcome of last years general election.

Our survey provides valuable insight into how to interpret the divergent results that have been produced by internet and phone polls throughout the referendum campaign, John Curtice, professor of politics at the University of Strathclyde, said in an e-mail. However, it is important to remember that the outcome looks so close that any lead should be treated with caution.

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Source: http://www.bloomberg.com/news/articles/2016-06-20/brexit-vote-in-the-balance-as-polls-differ-over-which-side-leads

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Watch gold jump to $1400 if UK votes to Brexit

Remainer Ed Vaizey savaged by facts and has no answers against Brexit

So-called Brexit concerns already have significantly jolted financial markets, but more could be in store if the fears become reality and the U.K. votes to exit the European Union.

One of the biggest beneficiaries of disquiet that Britons could opt to leave the EU at its June 23 referendum, is gold.

Gold futures GCQ6, +0.50% are set to rise as much as 8.5% from current levels, according to James Butterfill, head of research and investment strategy at ETF Securities.

Brexit would be very beneficial for shorting sterling and we will probably see a big pick up in gold. In that scenario we think gold could hit $1,400 [an ounce], he said on the sidelines of the Inside ETFs Europe conference in Amsterdam.

Weve looked at previous risk events and for instance when Greece nearly left the Eurozone [in the summer of 2015] we saw really elevated futures positioning. We are making the assumption that we would see net longs for quite an extended period of time in gold in a Brexit scenario, he said. He stressed, however, that a U.K. exit from the EU, or Brexit, isn"t what he thinks will mostly likely occur.

Early polling suggests that the vote next week will be close. Recent surveys show an increase in support for the leave campaign. Meanwhile, the bookmakers are still pointing to a narrow win for the stay camp. That uncertainty is fueling jitters in the financial markets. The pound GBPUSD, +0.0493% for example, has shaved off 2.5% against the dollar in June so far, while the U.K. blue-chip benchmark, the FTSE 100 index UKX, +0.73% is down 4.4%.

Gold, on the other hand has been one of the best performing assets with a 5.9% rise this month. Since the beginning of 2016, the metal has rallied a whopping 22%. That compares with a lackluster 1.6% gain for the S&P 500 SPX, -0.18% and 12% drop in the Stoxx Europe 600 index SXXP, +0.97%

Butterfill said ETF Securities has seen an inflow of $2.6 billion into gold this year, boosting the metals share of the companys asset under management to 14%.

I think it has happened for various reasons. One is Brexit, another is a non-establishment presidential candidate in the U.S., he said, referring to the presumptive Republican presidential nominee, Donald Trump. He said the other concern is the Federal Reserves interest-rate policy, which appears to be on track to remain unchanged for the near term, a fact that would be supportive to gold prices.

These are three quite significant risk events, so thats why we are seeing popularity with gold, Butterfill said.

That also means a rally to $1,400 an ounce would have legs and not just translate into a short-term shaven trade, Butterfill said.

I was actually surprised when [Fed Chairwoman Janet Yellen] mentioned Brexit for the first time in her speech last Monday. Its clear they are thinking about how much instability it creates. The implications could have a domino effect with other fringe parties around Europe pushing for a referendum. Its not a nice investment environment, he said.

The August contract for gold traded around $1,288 on Wednesday.

Source: http://www.marketwatch.com/story/watch-gold-jump-to-1400-if-uk-votes-to-brexit-2016-06-14

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