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Before the June 23 vote, pro-Brexit and pro-EU groups frantically make their cases. Mainly:
- Pro-Brexit groups feel the EU naturally acts in the best interest of the euro, even at the expense of the British pound. Additionally, Brexiters are concerned about the refugee crisis. An influx of non-EU born workers operate under more lax EU labor laws, at the expense of native-born workers. Those in the "Leave" camp also believe focusing trade within the EU limits Britain's ability to trade with larger economies like China and India.
- Pro-EU groups believe member countries have greater bargaining power than they would be afforded on their own. For instance, the EU and United States are negotiating for a proposed trade agreement called the Transatlantic Trade and Investment Partnership (TTIP). Further, EU membership allows Britain to skirt tariffs on imports and exports between itself and member states. And lastly, Brexit opponents like Prime Minster David Cameron, point to the uncertainty created by a Brexit. In a February interview with The Telegraph, Cameron called leaving the economic bloc the "biggest gamble of the century."
Among numerous stories weighing the pros and cons of a Brexit, one clear voice has reached a more confident, sweeping conclusion than them all…
Who Is Marc Faber?
Faber was born in 1946 in Zurich, Switzerland. He earned a Ph.D. in Economics at the University of Zurich. Then he became directing manager for the Hong Kong division of investment bank Drexel Burnham Lambert Ltd from 1978 until 1990, until the firm was forced to shut down due to illegal dealings in the junk bond market.
Faber went on to found the monthly newsletter the "Gloom Boom Doom." That's where he established the nickname, Dr. Doom.
He's known for a cynical outlook and was credited with advising his clients to move money out of the stock market before the October 1987 crash. He also stated in 2009 that the Federal Reserve's policy on keeping interest rates low would lead to hyperinflation.
In a June 2008 newsletter, Faber stated that the only things still produced in the United States were prostitutes and beer.
Because Faber is known for bearish outlooks, it's surprising that he views Britain leaving the EU as something positive for the global economy….
Why Marc Faber Wants a Brexit
On June 9, Faber told CNBC that he thought a "Brexit would be good for global economic growth."
He believes the EU is badly organized, and that if Britain were to leave the EU, it would give other countries an incentive to follow suit. And that would spur economic growth across Europe.
While the goal of the EU is to promote the free movement of goods and services, Faber said it has become too bureaucratic. He cites Switzerland as the perfect example of how a country in Europe can thrive without the EU…
Switzerland still conducts business in the EU, but the Swiss are able to act in the best interest of their country. They don't have to follow rules established for all EU members. Faber also highlighted the strength the Swiss economy despite its non-membership. For example, the country just completed a $12 billion rail tunnel, which is the largest in the world.
Dr. Doom could be biased as a natural-born Swiss, but he's got strong GDP numbers to support his example…
Switzerland's GDP was $685.4 billion as of 2013, making it one of the biggest economies in Europe. Only France, Germany, the Netherlands, Spain, and the UK have larger economies.
And when you consider Switzerland's population is just 8 million, the size of the Swiss economy is especially impressive:
- France's population as of 2013: 66 million
- Germany's population as of 2013: 80.62 million
- Netherlands' population as of 2013: 16.8 million
- Spain's population as of 2014: 46.77 million
- United Kingdom's population as of 2013: 64.1 million
Faber added that a Brexit will encourage Britain to trade more with larger partners like China and India.
Brexit: Buy the Rumor, Sell the Fact: In 1992, George Soros broke the Bank of England by shorting the sterling pound. It was a move that made him $1.5 billion. Now, the Bank of England is about to break itself. Before the Brexit vote on June 23, we discovered two ways to profit during the chaos. Here's how…
- Google: Public Data Directory
- CNBC: Marc Faber Just Made a Huge Contrarian Call
- The Telegraph: David Cameron: Brexit Would be 'Gamble of the Century'