Bitcoin Sideways, Pound Unmoved, as the Very Close Brexit Election is Now On

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UK election, Nov 2019

The Queen has dissolved parliament today, marking the official beginning of the five weeks election campaign in a defining moment for the United Kingdom.

The race is between Boris, Corbyn, and Jo, with Farage poking at all three, while the country looks on at the completely different visions.

What happens here matters, and matters a lot, not just for Britain or just for Europe, but the entire world.

The outcome can move markets, including bitcoin, and what the British choose, others might follow.

A Corbyn win makes Democrat’s job in America a bit easier, if not gives them a victory.

A Jo Swinson win would revive liberalism across Europe and America as well as other countries in a pendulum swing after two decades of constrains.

A Boris victory is more complicated because he describes himself as a liberal conservative.

What that means is not too clear except that it’s new conservatism, or what really should be called the Boris doctrine.

On social matters it’s liberalism, including pro-migration, albeit with borders. The sort that can best be described: don’t want to see color, or gender, etc.

On economic matters it’s pro-market, but with a role for the government, and perhaps even a very big role.

We’ll have to wait for this doctrine to be fleshed out in the next five weeks, but we think the Boris club believes the government should be lifting the poor, should invest in infrastructure and the like, and should be proactive, with gimmicky things like Boris bikes as well as substantial things like reviving London bridge.

The Very, Very Close Brexit Elections

The visions are big for all three and in many ways are completely different. Jo wants to stay in the EU. Boris wants a deep and special partnership. Corbyn doesn’t care about the EU.

What Corbyn cares about is economic policy, a complete transformation on it. Things like inheritance tax, nationalizing rail, progressive taxation, one million social homes, Scandinavian style socialism basically. High taxation and very high government reliance.

Many of his policies are very popular, and although it is easy for the media to dismiss them as just communism, only fools underestimate the message of free money.

Libdems, Plaid Cymru (PC) and Greens are in an alliance. So really the above poll should say Labour 29, Conservatives 28, Liberal Democrats 27.

As close as it can possibly get, although this is just for Wales. There are many constituencies, however, where it is just as close. This is an election where even one vote can decide the winner.

That’s because there are four parties in play with each offering something different.

A four horse race is not quite something seen before. Although, the Brexit “Party” of course isn’t quite running to win, more to injure. Libdems would need some miracle to get even second position. Corbyn at best can hope to lose in a “winning” way. Boris’ election to throw away.

Yet, the game is played at a constituency level. Although blue is polling at around 40% nationally, just how that is distributed determines whether they do win even most seats.

That was a projection by YouGov, rather than an actual poll, but the message is obvious. This is “the enemy of my enemy is my friend” election.

Appallingly, Labour for example is trying to do their best to big up Farage on social media.

The massive “army” of momentum keeps flooding social media, turning r/ukpolitics into what Share Blue did to r/politics in the 2016 US election.

The left loves to go on about Cambridge Analytica and the like, but they have their own Cambridge Analyticas.

Libdems presumably have their own too. You can’t win an election without tech anymore for the battles online are arguably even more important than door to door.

This Britain

The dirty game has begun. Lies, smears, brigading, subreddit overtaking, outrage over nothing, and much else, is sadly what you’d expect.

Then there’s obviously the pen, the one that arguably decides, for the people will probably vote on substance, considering the rest as childish distraction.

For a debate is going on and it’s a very big debate, and hopefully this time it stays at just debate so that a clear and “good” decision can be reached.

Now what exactly is that “good” decision we currently don’t know. We can’t abstain, not in this election, but we need to hear a lot more from all three parties before leaning either way.

Their positions on this space obviously matter. We haven’t established them yet. But what matters more is the structural vision because that might affect this space and others more than any specific policy.

GBP/USD, Nov 2019
GBP/USD, Nov 2019
Bitcoin’s price, Nov 2019

Curiously, both bitcoin and the pound are sidwaying. Arguably stocks are sort of doing the same. Little movement because it’s not clear how things will go.

A hung parliament would be the very worst outcome. Just what would happen in that situation is not very clear, but if a coalition has to be forced, that would not be good.

There are two potential coalitions. Brexit Party (BPX) and conservatives is one potential coalition. That would be the worst outcome.

Because BPX exists solely due to Brexit – they’re not even a party, they have “subscribers” – at a self-interested level you’d think they’d want to sabotage it so that they can continue to be relevant. They’d want to go for no deal.

To many, a no deal is unacceptable for the highest reason: war and peace itself. They’d thus campaign to get a second referendum, with a remain option, and they’d probably succeed, so basically continuing the volatility in polls we’ve seen this year.

That would benefit BPX because they’d claim one side of the debate, but it wouldn’t benefit the United Kingdom which, whether it likes it or not, is and will remain next to France and Germany and Ireland and Denmark.

Another coalition would be Corbyn and the Scottish Nationalists (SNP). That makes the election in Scotland very important too because unionists might have voted SNP just to have a voice in Parliament, but now they might consider such vote being one for a Hadrian Wall.

Both outcomes are bad in our view, and you’d think the pound would tank because it’s just a continuation of a mess.

So who wins might be less relevant than that someone wins a full mandate to do what they’ve said they will. Who should get such mandate is a different matter, one to be scrutinized fully in the next five weeks.

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