Valuetainment - Episode 365： Brexit- Global Market Crash Pending

00:00:00.000 30 seconds. One time for the underdog. Ignition sequence start. Let me see you put them up. Reach the sky, touch the stars up above. Cause it's one time for the underdog. One time for the underdog.

00:00:16.880 I'm Patrick Bedevi, your host of Value Tim, and today we're going to talk about Brexit and how it could affect your pocket, your money, your investments, because the second largest financial capital in the world is a city called London, and Brexit has to do with London, and London and Brexit has to do with the market. So, some happens to Brexit, odds are some's going to happen to your funds.

00:00:36.360 What is Brexit? Well, Brexit is British exiting EU. So, Britain wants to leave EU and be their own country, right? Now, what is EU? EU is European Union. You keep hearing about it, but you know how sometimes you hear something and you kind of think you know what it is, but you never question what it is because you don't want to act like maybe I don't know this stuff, so I just kind of act like I know what EU is. Who's even in the EU? I don't even know what's in the EU. Why did even EU get started?

00:01:05.120 How long has EU been around? So, Brexit is Britain exiting EU. EU is European Union. So, what is the purpose of starting EU, right? We keep hearing about it, but why did they start EU? It's very simple. It's actually two reasons. Number one reason was peace, because they had just come out of war again. World War I, from 1914 to 1918, cost them 17 million lives. And then they have the second war from 1939, World War II to 1945, 70 million lives.

00:01:34.540 They're sitting around saying, you know how many family members I've lost? How many friends I've lost? How many colleagues, peers? We do not want to go through another World War III. So, number one reason was peace. The second reason was economical. What if all of our nations collectively can start working together and creating one market?

00:01:51.540 And this idea was pitched by Robert Schumann, the former Prime Minister of France. Here's what he said when he came out with this idea of ECSC in 1951.

00:02:01.540 He said, the treaty is created with the idea to make war not only unthinkable, but materially impossible. So, they wanted to make it mathematically impossible to have another war. And on top of that, they created this treaty to create a common market for coal and steel among its member states, which serve to neutralize competition. Remember that keyword? We're going to come back to it. Neutralize competition between European nations over natural resources.

00:02:30.360 So, very simple. You got two reasons. One, you got peace. The other one, you got economical. Right? So, they came out with the ECSC in 1951, established by Treaty of Paris, signed by six nations, Belgium, France, Italy, Luxembourg, Netherlands, and West Germany.

00:02:46.420 Then that transitioned into 1957, which was the Treaty of Rome. The idea of the Treaty of Rome was to make it a single market, which means, you know, I can do business in Germany. It's not really another country. You know, it's pretty much the same. Like, right now, I'm in the U.S.

00:03:00.120 And if I want to do business in Mexico, I have to go get established in Mexico, then I have to do business in Mexico. It's very complicated for me to go through it.

00:03:08.560 The Treaty of Rome was, look, if you want to come do business over, it's easy. It's not going to be that complicated.

00:03:13.060 Then they did that in 1957, and eventually, in 1993, EU was created. So, if you look up when did EU get created, the actual year is 1993. Right?

00:03:25.180 So, that's the history of why they started EU and how they started EU.

00:03:30.640 Now, the next question some people ask is, Pat, it's a simple question. Who's part of the EU today? How many total nations are there?

00:03:35.900 It's 28 different countries, and here's a list of countries. You've got Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Estonia, Czech Republic, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden, and last but not least, United Kingdom.

00:03:54.560 Those are the 28 countries. Now, the next question is, when they voted for Brexit, what did they vote like?

00:04:00.380 Here's what they voted like. 51.9% voted to leave. 48.1% voted to stay.

00:04:08.360 But the question is, who wants to stay? Who wants to leave? Because when you look at United Kingdom, it's really four different countries.

00:04:15.300 You've got Northern Ireland, which does not want to leave. They want to stay. Blue means they want to stay.

00:04:21.940 You've got Scotland, who has no reason to want to leave. They want to stay because they need the EU, and Wales wants to stay.

00:04:30.820 But if you look at the red, England wants to leave, right? So that's how it was voted.

00:04:34.980 By the way, old voted to leave, young wants to stay. That's how the demographics looks like when it came down to voting for Brexit.

00:04:41.300 But they voted for it, and the vote is 51.9% want to leave the EU.

00:04:46.860 Okay, so now you may be watching and saying, well, Pat, if the vote was dramatically 70-30, Brexit, I get it, but it's only 51.9% to 48.1%.

00:04:56.820 So the people that don't want to leave, there's got to be obvious reason for it, and there's benefits to it.

00:05:02.520 And the people that want to leave, there's got to be benefits there.

00:05:04.640 So what are the benefits of leaving and staying? So let's focus on that.

00:05:07.920 First thing we're going to talk about is the benefits of staying and not Brexiting.

00:05:12.360 Staying. Staying part of the EU. The number one benefit that a lot of the young keep talking about is the idea and the freedom to live, travel, work, retire anywhere in Europe.

00:05:23.060 So think about it. Living in the U.S., you want to go somewhere. You want to come into the U.S., how hard it is to get a visa, right?

00:05:29.720 So in Europe, because of the EU, I don't need a visa to go on Croatia.

00:05:34.500 Let's just say I live in Croatia. I want to go work at Belgium. I don't need to get an approval.

00:05:38.240 I don't need to get a work permit. I don't need to do any of that stuff. I can go work there. I can go live there.

00:05:42.960 I can go retire in a different place. And I don't have anything to constantly have to worry about, passport, any of that stuff.

00:05:48.960 Travel-wise, it's very simple. It's very basic to do.

00:05:51.940 The concern is, if they Brexit, some of the British people that are living abroad or living in another place, what happens to them?

00:06:00.640 What's the technicalities of that? How is that going to be handled?

00:06:03.840 Those are some of the concerns they have. That's why they're saying let you stay.

00:06:05.900 Okay. Next one is, it's been estimated that 3.1 million British jobs are linked to UK export to the EU, meaning other nations outside of UK.

00:06:15.400 What are they going to do with that 3.1 million jobs?

00:06:17.720 Many EU company headquarters, like I said earlier, reside in London, which may have to leave if Brexit takes place.

00:06:25.220 Because then how does that work out? Are you going to let me stay now?

00:06:28.480 I don't have the whole willing to work or retire, have headquarters anywhere.

00:06:32.240 Or maybe I'm not going to be in London anymore. Maybe I want to take myself back to Germany, back to France, back to Italy, back to a lot of these places.

00:06:39.660 And that could affect so many tens, if not hundreds of thousands of jobs in London and UK.

00:06:47.440 Do they want to risk that?

00:06:49.020 Next, less likely to get ripped off.

00:06:51.240 This is why it's less likely to get ripped off.

00:06:52.880 Because one of the things about EU is, there's a level of accountability when you're buying the products from each other.

00:06:57.660 Because the accountability, the organization that holds everybody accountable is EU.

00:07:02.060 So, there's less likelihood to get ripped off when you're buying a product.

00:07:05.720 And collectively, they become the third largest military in the world.

00:07:09.980 Individually, they wouldn't be and be a bigger threat going back to worries of another war getting started.

00:07:15.840 So, that's the benefits of staying.

00:07:17.800 And by the way, there's a longer list of benefits staying.

00:07:20.100 I'm just giving you a few of them here for you to be thinking about.

00:07:22.560 Now, the benefits of leaving the EU and not staying.

00:07:25.900 Here's some of them.

00:07:26.560 Number one, create your own economy. 0.95

00:07:28.840 Because right now, every time UK wants to do business deal with China or with US, they have to go through EU to get it approved.

00:07:36.860 But if they separate and they create their own economy, they can negotiate with US, with China, without needing EU's approval due to trade agreements.

00:07:45.820 That doesn't need to be taking place.

00:07:47.020 Now, they can do it on their own, right?

00:07:48.240 The second thing, immigration.

00:07:50.100 Now, this is kind of technical because we're dealing with some of this in America, but in Europe, it's a whole different story.

00:07:56.880 Here's what the concern is with some of the folks in UK that are voting to Brexit.

00:08:03.200 Immigration.

00:08:03.660 This allows UK to choose the number of immigrants they accept to come and live in UK rather than being forced by EU.

00:08:13.120 Because, you know, somebody may watch this and say, well, that's not fair because the EU doesn't force UK to take immigrants.

00:08:19.460 Well, if you remember how the EU works, say UK doesn't.

00:08:24.180 But if I go to another country that's part of the EU, say I go to Germany, say I go to Austria, say I go to Belgium, and they accept an immigrant, and all of a sudden I'm part of the EU, that means I can travel and go and work and live anywhere, right?

00:08:40.300 So, maybe UK is not forced to take those immigrants, but maybe the immigrant could start from another country and then go to UK because that's a better hub in London, and then London takes a hit for it, and they don't want that risk. 0.90

00:08:53.080 They want to control and say, nope, you're not welcome here, this is not you, we don't want you here, right?

00:08:57.240 And I know that kind of may sound cold to some of you guys, because I, as an Iranian immigrant, I went to Germany at a refugee camp from Germany, came out here, but UK, those that want to vote for Brexit, that's one of the things they want the freedom to be able to say, we don't want any immigrants, we want to have a limit, we want to have control on who can come here. 0.99

00:09:15.040 Next one, create their own identity.

00:09:17.520 They don't want to be in someone's shadow.

00:09:18.980 They don't want to be, hey, we're one of the 28 countries in the EU.

00:09:21.860 Now we're UK, we're a 2,000 year old empire, British empire, why do we need someone's help today?

00:09:28.920 We don't need someone's help.

00:09:30.900 And then the other point is that you keep hearing about Boris Johnson, the new prime minister, who's very, very vocal.

00:09:37.920 He says the UK sends 350 million pounds a week to the EU.

00:09:44.760 Why are we doing that?

00:09:46.120 That's 350 million pounds a week to the EU.

00:09:49.400 Matter of fact, his campaign bus had that number on the bus.

00:09:54.160 And here's what he's recorded to say recently.

00:09:56.780 He said, no ifs, no buts, we are leaving on October 31st.

00:10:02.680 That's what Boris Johnson has said.

00:10:04.840 We're leaving, we're Brexiting, and he's the prime minister.

00:10:07.200 So having said that, I want to share with you some of my thoughts as an entrepreneur, how I view this whole Brexit, EU, is it a good idea, is it not?

00:10:13.760 And then you can process it any way you want.

00:10:15.340 I'm just giving you my perspective on what I see happening with Brexit.

00:10:18.600 So first things first, think about it this way.

00:10:21.220 When you and I are afraid, what do we do?

00:10:24.080 Do we make risky decisions or safe decisions, right?

00:10:27.360 We typically make safe decisions.

00:10:29.200 So think about, you just went through this war.

00:10:32.000 What do you want to do?

00:10:32.840 The first thing you're going to vote for is what?

00:10:34.640 Look, I just want to make sure my family's safe.

00:10:36.600 You don't think about vision.

00:10:38.340 What if one day better opportunity, better jobs, better innovation.

00:10:41.480 But all you think about is safety for my kids, safety for myself.

00:10:44.580 I want to be okay, right?

00:10:45.900 So for some folks that are watching here that are living in America saying, I don't really know what Brexit is close to, you know, comparing it to.

00:10:53.100 So Robert Schumann, who was a French prime minister, who came up with the idea of ECSE.

00:10:57.400 Hey, let's bring everybody together.

00:10:59.260 Let's eliminate war permanently and let's neutralize competition and bring everyone together.

00:11:05.300 Robert Schumann is the equivalent of FDR during Great Depression.

00:11:11.120 When Great Depression took place, market crashed.

00:11:15.380 Joseph Kennedy, market manipulation, whatever you want to call it.

00:11:18.780 Jobs, Ford, all this other stuff.

00:11:20.800 But FDR came, he said, we're offering Social Security, regulated the industries, brought down minimum wage.

00:11:29.280 He says, everyone's going to have a minimum wage.

00:11:31.020 He's the first president that announced minimum wage.

00:11:33.740 25 cents an hour was the minimum wage.

00:11:35.960 He made all these Ford and all these other companies, raised their minimum wage, lowered the hours, vacation time, all this other stuff.

00:11:43.000 Regulation, regulation, regulation.

00:11:45.000 And people are like, oh my gosh, I feel so much safer.

00:11:46.900 So at that time, FDR was a hero because it was such a scary time in America.

00:11:54.060 And at this time, right after this, it was such a scary time for European leaders that they themselves said, man, what a great leader Robert Schumann is.

00:12:03.360 He's bringing us peace of mind.

00:12:05.480 We're for this.

00:12:06.540 And so six countries signed the Treaty of Paris.

00:12:09.260 Let's come together and do this.

00:12:10.580 So I fully understand their fear.

00:12:12.340 When I was in Iran in war and we're getting bombed, we're not thinking about, when am I one day going to go to a great private school and build a business and maybe one day my dream.

00:12:20.340 All I'm thinking about is that, are we going to be safe, are we going to live?

00:12:22.640 That's all my dad's thinking about.

00:12:24.080 It's safety, secure, fear.

00:12:26.660 We're just thinking safety, right?

00:12:27.880 So I fully understand the reasoning of starting EU.

00:12:31.540 Now, having said that, if you look at 1951 when the European coal and steel community was created, coal and steel, 1951, right?

00:12:41.840 Coal.

00:12:42.500 Big deal.

00:12:43.340 Everybody needed coal.

00:12:44.580 Let's keep families warm.

00:12:46.340 We got to make sure it's safe.

00:12:47.640 We got to make sure we're warm.

00:12:48.760 Families, right?

00:12:49.720 Warm coal.

00:12:50.660 Great.

00:12:51.220 Do you know Guardian wrote an article May 31st of 2019 this year talking about the fact that Britain went, first time ever since 1882,

00:12:58.600 they went two weeks without using any coal and they got their gas, relying 100% on the gas they got from Norway.

00:13:08.100 And by the way, just so you know, Norway is not part of the EU.

00:13:11.460 They voted twice to be part of the EU.

00:13:13.600 And both times they said, no, I think one was in 1972 and one was in 1994.

00:13:17.500 And they voted for this, right?

00:13:18.660 So they're sitting there saying, well, maybe today's different times.

00:13:21.760 You know, when we're looking at the coal and steel, why do we need that today?

00:13:24.820 And when you look at their steel relationships for, you know, Britain, where they're getting their steel from right now,

00:13:31.160 number one country they're getting it from is a European country.

00:13:35.040 When you're looking at it, they're saying, okay, you still do need some of these countries that were using for coal,

00:13:40.480 meaning Germany, then Belgium, then Netherlands, then Spain.

00:13:44.000 But then there's China.

00:13:45.120 There's Turkey.

00:13:46.400 Then you have France, Italy.

00:13:47.960 So if they really wanted to get their steel outside as well, they could probably get it if, let's just say,

00:13:53.080 they Brexit and some of the EU countries said, we're not going to do business with you,

00:13:57.340 which I highly doubt that's going to be taking place.

00:13:59.440 So I also understand what they're thinking about to say, look, 1951, yes.

00:14:04.280 Maybe it makes sense to be part of the EU.

00:14:06.740 1957, okay, fine.

00:14:08.340 Maybe we do need to have a single market.

00:14:10.100 Fine, fine.

00:14:10.620 We need each other.

00:14:11.320 I get it.

00:14:12.420 And in 1993, EU, whatever, fine.

00:14:15.420 We created it.

00:14:16.140 But today, maybe we want to get out.

00:14:18.900 Here's why we want to get out.

00:14:19.880 Because when Robert Schumann created this whole thing, it was about neutralizing competition.

00:14:24.540 And what happens when you neutralize competition?

00:14:26.880 Here's what happens when you neutralize competition.

00:14:29.060 Think about it this way.

00:14:30.460 Europe, EU, 28 countries combined, 508 million people live in there, right?

00:14:36.840 It'd be the third largest country in the world.

00:14:39.340 508, China, India, and then it would be EU if it was a country, right?

00:14:42.780 US is 328 million.

00:14:44.380 And they have more access to people to create advancement, right?

00:14:50.220 But because you neutralize competition, and that's the idea, there's no competition, when's

00:14:55.340 the last time you heard about an incredible creative technology company or even community

00:15:01.440 of that being created in the EU?

00:15:03.440 When's the last time you heard about it?

00:15:04.460 Now, somebody may say, well, what about Spotify, you know?

00:15:06.460 What about the guy, you know, Spotify, I think it's Sweden, or the Siri guy, he created the

00:15:13.200 technology for Apple from there.

00:15:14.620 Yeah, but okay, great.

00:15:16.020 Go look at some of the major companies in EU.

00:15:18.420 There are companies that have been around for a while.

00:15:20.160 It's oil companies.

00:15:21.140 It's companies that are like, oh, I know this company, but it's for such a long time.

00:15:24.800 So where is the innovation?

00:15:26.560 Why is that not taking place?

00:15:28.280 Maybe because we need competition.

00:15:29.660 Here's another point for you, that EU forces the employer to give every employee five weeks

00:15:37.280 of vacation time, not including the national holidays, which is another two weeks.

00:15:41.920 So five weeks, not including the national holidays, which is another two weeks.

00:15:45.860 That's seven weeks.

00:15:46.580 So take seven weeks out of 52 weeks out.

00:15:49.520 That loses momentum, which in the U.S., we don't do five weeks.

00:15:52.800 We do two weeks.

00:15:53.480 So give that additional three weeks times your population of people living there, how

00:15:58.960 much more opportunity is there for innovation?

00:16:01.000 So maybe Boris Johnson is saying, look, I don't want to deal with it like that, right?

00:16:04.380 I just don't.

00:16:05.120 I want to see us competing for ourselves and making a name for ourselves.

00:16:07.640 Now, the other side is also to keep in mind that if this does take place, the top contributors

00:16:13.060 right now to the EU, number one is Germany.

00:16:15.380 They put in 21.11% of the entire budget.

00:16:19.920 Then it's France, 16.4%.

00:16:21.660 Then it's Italy, 13.64%.

00:16:23.320 Then it's UK, 13.05%.

00:16:25.120 So UK is number four in the amount of money they put into it, right?

00:16:29.100 You've heard Boris Johnson say they pay 350 million pounds a week to the EU.

00:16:33.840 So you hear a number like that, 13.05% that they're putting into it.

00:16:38.240 Fair?

00:16:38.680 Watch this.

00:16:39.680 If UK pulls out and they say, we're out of Brexit, we're out of it.

00:16:43.840 Everybody's saying they're doing it because of what Boris Johnson is saying.

00:16:47.260 But if UK is actually officially out, that'll cost Germany an additional 4 billion euros per

00:16:55.780 year and France another 3 billion.

00:16:57.920 And it will cost Italy another 2.5 billion per year to fund into EU.

00:17:02.020 So what does that really mean?

00:17:03.600 Here's what it could really mean.

00:17:04.720 A couple things.

00:17:05.280 One, so UK, Brexit takes place.

00:17:10.740 They leave, okay?

00:17:12.540 All of a sudden it's like you being at a bar and you typically share the tab with everybody

00:17:16.480 and one of the guys that pays the most, he leaves.

00:17:19.160 Now you have to pay even more for everybody.

00:17:21.960 So you have to sit there and say, look, we're Germany.

00:17:23.740 We're big.

00:17:24.160 We're powerful.

00:17:25.360 You know what, guys?

00:17:26.380 We're out as well.

00:17:27.340 We'll help you guys out and everything, but we want to leave as well.

00:17:29.860 So if Germany, France, these guys decide to leave, now it's a whole different thing.

00:17:35.700 Now you're talking about EU goes from being 28 to possibly a lot less than that.

00:17:39.760 Then there's going to be a lot of challenges for funding and money because the smaller nations

00:17:43.440 cannot afford to put a lot of money into.

00:17:45.500 So no one really knows what could be taking place.

00:17:48.120 And a final thought to be thinking about because if you go and watch what the grandson,

00:17:51.980 Churchill's grandson said, they asked him, they said, if your grandfather was here right

00:17:55.560 now, what would he say about Brexit?

00:17:56.880 He says he would absolutely be against it.

00:17:59.400 Now, some people say, because Boris Johnson wrote a book about Churchill, and one of the

00:18:03.400 things that he and I, he and Churchill both have in common is they're both journalists

00:18:06.680 and they both became PMs and they're both pretty hated type of personalities.

00:18:11.960 Not everybody loved Churchill, by the way.

00:18:13.400 Churchill's a guy they counted on when war happened to go up against, you know, the Germans

00:18:18.480 and all these other things that was taking place out there during World War II, but they

00:18:21.840 didn't like him too much, right?

00:18:22.940 Because he has strong opinions.

00:18:25.180 Churchill once was for the United States of Europe, right?

00:18:29.400 But he was also the same guy that says, we are for Europe, but not of it.

00:18:34.860 Meaning, we're for Europe, but we're not of it.

00:18:37.360 We stand alone.

00:18:38.180 We're our own nation.

00:18:39.280 We have our own identity.

00:18:40.760 So there's contradictions and a lot of ambiguity in his message on what he said.

00:18:44.800 Some people said he wouldn't be for Brexit.

00:18:46.420 Some people said he would be.

00:18:47.940 But here's the moral of the story.

00:18:49.100 What I can tell you is the following.

00:18:51.440 Times have changed.

00:18:53.000 Before, it was a lot of manual labor.

00:18:54.720 A lot of manual labor.

00:18:56.020 Who can work hard.

00:18:57.780 Oil.

00:18:58.260 A lot of countries were rich because of natural resources.

00:19:01.160 Just pure luck.

00:19:01.980 You have oil, you're rich.

00:19:02.940 Okay, good for you.

00:19:03.920 But you don't know what to do with it, right?

00:19:05.200 There's a lot of that going on.

00:19:06.200 Today, I think it was TEDx conference that was 10 years ago.

00:19:11.160 And they said the number one resource right now everybody wants is data.

00:19:15.400 It's data, data, data.

00:19:16.460 Everything's about data.

00:19:17.780 You got data, you're winning.

00:19:19.380 And today, it's about data.

00:19:20.740 It's no longer just manual labels.

00:19:22.740 Thinkers.

00:19:23.740 So maybe UK is sitting there saying, look, due to globalization, we don't feel like we

00:19:28.720 need EU like we did back in 1951.

00:19:31.100 We don't feel like we need EU like we did in 1957.

00:19:33.620 We don't even think we need EU like we did in 1993 because globalization with internet

00:19:38.280 and all this stuff wasn't really here like it is today.

00:19:40.940 We think we can do it on our own.

00:19:42.160 But regardless of all this stuff taking place, there's one thing I can't tell you.

00:19:45.760 Typically, there's a lot of war that takes place due to ideologies, right?

00:19:50.020 You know, we believe in this.

00:19:51.080 We believe in this.

00:19:51.640 No, you're wrong.

00:19:52.340 Let's go war, right? 0.93

00:19:53.240 And all these wars take place.

00:19:55.440 Today, the market is so fickle because of what's going on with trade war with China.

00:20:04.200 What's going on with Wall Mexico trade there.

00:20:07.360 What's going on with Brexit.

00:20:08.820 If that happens, UK is going to take a hit and London is the number two financial capital

00:20:15.020 of the world.

00:20:16.920 There's a lot of things that are cooking right now.

00:20:19.980 A lot.

00:20:21.040 And it can either go good or it can either go very bad.

00:20:25.280 But it's not going to be staying in the middle here.

00:20:28.200 There's going to be some major shakeup.

00:20:31.220 And again, I'll give you the good news and bad news.

00:20:33.420 The bad news is some people are going to lose big time.

00:20:37.900 And the good news is some people are going to make big time.

00:20:41.100 It's just about how you position yourself.

00:20:42.540 Thanks, everybody, for listening.

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00:20:57.700 Just search my name, PatrickBitDavid.

00:20:59.600 And I actually do respond back when you snap me or send me a message on Instagram.

00:21:04.600 With that being said, have a great day today.

00:21:06.340 Take care, everybody.

00:21:07.060 Bye-bye.

00:21:12.540 Bye-bye.

Valuetainment - September 11, 2019

Episode 365： Brexit- Global Market Crash Pending

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