The EU is a distinct entity from the Eurozone currency area, which has its own problems. I think the EU can probably survive a Brexit, but it won’t survive a Frexit, Germexit or Spexit. (Just for the record, there is no easy way to combine Italy and exit, so I think that will have to be referred to by the Italian word for exit – Uscita – if and when the time comes.) And that would leave Europe back where it was before World War II: a fragmented continent in which disagreements get very ugly and occasionally turn violent.

No one wants that outcome, but very few Europeans outside EU headquarters in Brussels seem happy with the status quo, either. This summer could see the beginnings of a devolution. It’s up to UK voters now.

Just as the rest of the world cannot understand what America was thinking when we nominated Donald Trump for president, most of us who think we understand the consequences of Brexit are wondering what the British are thinking. Can they be serious?

I had this discussion with Jim Bianco yesterday. He pointed out that it is almost impossible to turn the TV on in England without seeing Labor Party leaders, Tory Party leaders, economists, and everybody else except Boris Johnson telling people why Brexit is a bad idea.

The mood in Europe is part and parcel of the same phenomenon that we are seeing with Trump and Sanders in the United States. There is growing discontent with the establishment, no matter which party people are aligned with.

Thus the pollsters are going crazy trying to figure out how to handicap this referendum vote in England. The numbers are not breaking down along the normal left–right lines that they have in their political models.

By the way, if England does decide to leave the EU, expect a quick call for a referendum on Scotland’s leaving the United Kingdom and joining the EU on its own.

William Butler Yeats does really seem to have nailed it, a-way back in 1919:

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand…

Recession Warnings Galore

After hearing so many speakers talk about the potential for another recession at my Strategic Investment Conference last month, I started collecting recession warnings. Now I see them everywhere. Worse, many come from people I greatly respect and have found reliable over the years.