Why Did the Pound Plunge?

Brexit, and the new world it has made

A man carrying an anti-EU pro-Brexit placard shouts in a counter protest against pro-Europe marchers on a March for Europe demonstration against the Brexit vote in Parliament Square in central London on September 3, 2016
A man carrying an anti-EU pro-Brexit placard shouts in a counter protest against pro-Europe marchers on a March for Europe demonstration against the Brexit vote in Parliament Square in central London on September 3, 2016

The lead story in the British press last week was why the Pound plunged 6 percent in less than two minutes. As the Financial Times notes, it is an extraordinary move in normal market conditions, adding, “What is equally extraordinary, however, is the difficulty in explaining how and why it happened.”

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Perhaps it means that we are no longer living under “normal market conditions” and are suddenly living instead under extraordinary conditions.

Was it the “fat finger” of the market? Was it intentional? Algorithms? Was it Francois Hollande? Since the experts have not arrived at a satisfying explanation, I have one to offer and I’m not surprised to see the Pound fall. In fact, I’ve been expecting something like this to happen for weeks: It was Brexit.

Mystery surrounding the dramatic fall of the Pound relates back to the dramatic shift in public temperament Britain experienced when they voted for Brexit, which was likewise unexpected, extraordinary, and unexplained. But something has been missing from the first in the Brexit discussion in the British press, perhaps because it is something they are not proud of and do not want to talk about.

I can think of only two places on earth with deeper symbolic and subconscious cultural roots which persist from ancient memory than the city of London; Rome and Jerusalem being the other two. Just a few weeks before the Brexit vote, London left the motley trickster, “one nation” conservative London Mayor Boris Johnson, behind to vote in Sadiq Khan as the new mayor of London. But for the old soul beneath in the fair election of Khan, a most secularized and competent lawyer quite ready, able and appropriate for the job in our most modern times, it may have read in the darker, unexplored corners of the unconscious the same as the sacking of Rome by Visigoths 410 or the sacking of Jerusalem by Rome in 70, or the fall of Constantinople to Ottoman Turks in 1453. Khan is a Muslim, the first Muslim Mayor of London. He assumed office on May 9, 2016. The Brexit vote was June 23, 2016, less than two months later.

The big-haired, bleach blond, Manhattan-born Johnson, who championed Brexit, is a most interesting and complicated figure. He wants to repudiate contemporary globalism and return the old Victorian karma back to modern day Britain. But the collective advancement of Brexit which gathered much of its support from the rural people of the provinces may have been intentionally or unintentionally to scuttle the ship that was Great Britain—a classic sea battle strategy—rather than let it fall into the hands of a Muslim mayor at a time when Islam had become the second largest religion in traditionally Protestant England. Somewhat hysterically, the fall of Britain, the collapse of the Anglo American post-war era, the fall of the West, the E.U. and West-based globalized capital was widely predicted prior to the Brexit vote. Perhaps it is happening now. Perhaps we no longer live in “modern times” and will have to think of a new name for the era we are rising into. Perhaps Brexit was the threshold to that new era just ahead.

Intentionally or unintentionally, Brexit voters may have been successful in scuttling the ship. Since Brexit, the Brits have isolated themselves not only from Europe and the E.U., but from America and China as well. At the recent G-20 conference in Hangzhou, President Obama repeated his warning that the British would now be placed at the end of the queue in trade action and discussion, a threat as great to Britain as when President Dwight Eisenhower threatened to ruin the British financial system over the Suez Canal incident.

Power status was made clear to all in one of the “family photos” of the G-20 grouping with German Chancellor Angela Merkel, dead center in the front row, Obama to her right and Chinese President Xi Jinping to her left while British Prime Minister Theresa May was unceremoniously pushed aside to a far corner in the back row next to a Saudi deputy crown prince. She wore a bright red dress in hopes of being noticed at all.

The fall of the Pound brings urgency to the Brexit gambit. Implications could be far-reaching. Will the E.U. fall apart as the Visegrad Group of Central European states, the Czech Republic, Hungary, Poland, and Slovenia, threatens a Brexit of its own? Will Austria join them? With Britain gone, will Germany rise now to be the absolute leader in Europe? Without Britain to hold them back, will the E.U. raise their own army against NATO? Will Russia intervene in a troubled Europe?

And most importantly, what will happen to us in America, for as Britain goes, we may go as well, since we were never really separate.

Why Did the Pound Plunge?