STOCK MARKET WATCH -- Friday, 25 January 2013

[Demeter]

7. UK to Say "Goodbye" to EU? (CONTINUATION)

The UK will have a referendum in 2017 to determine if it wants to stay in the EU. That's so far away that it has no consequence today. I do think this sets up as a "big deal" at one point in the future.

Looking at the calendar, there is something that will be emerging at the same time the UK referendum is due. The big economies in the EU have all agreed to a transaction tax. This tax will come to only .01% on turnover of stocks, bonds and derivatives, but it will devastate the domestic markets in France, Germany, Netherlands and Italy. As a result, London will get another boost as the financial capital in Europe.

The folks in the UK will be well aware of the influx of foreign traders, the capital they bring in, and the office space they use. No doubt, the Brits will be laughing at the EU for creating their success.

It just might prove that the EU's transaction tax becomes the reason why the UK votes to opt out. The TT will prove that the EU has no clue how to run an economy. If that is how it plays out, I will get a laugh.

THE ONLY WAY SUCH A TAX WILL WORK IS IF EVERY NATION INSTITUTES ONE...WITH THE EXCEPTION OF THOSE ECONOMIES THAT NOBODY WOULD PUT MONEY IN. I AM HOPEFUL THAT HAPPENS.