WHAT's NEXT AFTER BREXIT?

The aftermath of BREXIT has been unrelenting and fierce. Global markets tumbled:

Dow > 3% down
S&P > 3% down
Nikkei < 8% down
Hang Seng < 3% down
CAC > 8% down
FTSE > 3% down
DAX > 6% down

Pound fell to its lowest in 31 years
Gold and silver soared to 52 weeks high
US Dollar index went up to 95.63

If one were to examine the reason behind the recent rally prior to BREXIT, it smacked of over confidence. backed further favourable odds ran by the bookmakers and supported by huge bets made by single individuals despite the fact the the polls were close giving either party a 50-50 chance of a win. Therefore, anyone who participated in the rally based on bookmakers odds, truly deserved to lose their money.

If you have been long gold and silver the miners and related ETFs, then you are on relatively safe grounds.

In the coming weeks week, I would expect there could be an unwinding of trades, due to margin calls, or hedge funds closing due to hefty losses. But what could create further havoc and uncertainties in the global markets will be the unwinding of financial derivatives.

The bullion banks have been shorting gold all through the week prior to BREXIT, pushing gold from US$1,290s per oz to US$1,260 er oz. In fact, the shorts were the highest recorded in history. The unexpected results could cause a massive short squeeze and the bullion banks certainly deserve the outcome due to the constant manipulation in the precious metals market.

Therefore I would also expect that come Q2 2016 financials, major banks would be hit in their earnings. One of the way to ride on the weakness the banks' earnings to to buy the ETF that shorts the financials, ie: SEF  I believe Deutsche Bank would be severely hit, while in the US, it will be JP Morgan. Both of these banks have financial derivatives that are many times larger than their assets.

The US dollar is unlikely to hold on to its strength. while everyone has been busy with the news on BREXIT. 3 sets of data immediately draw concern. US factory orders fell -2.2% worse than expected. The Chicago Fed national Activity came in at -0.51 vs the prior month of 10.0. New housing sales fell below expectations with an even lower revision in the prior month. If anything, these are signs that the US economy is weak and could deteriorate further.

I believe there will not be any rate hike for the rest of the year and if the impact of BREXIT worsens going forward, we could a have QE4. Thus, in such a circumstance, the US Dollar will weaken. But precious metals could do well in such an environment.

The BOJ and the PPT from the Treasury Department have been actively supporting the US and Japan markets. And in a whiff of sell off the same billions have been lost. What sheer lunacy to borrow billions to support the market when the same billions could be used for development to improve the nation's economy. No wonder the remaining 99% were pissed and BREXIT happened!

Major corporations too have borrowed trillions to by back shares just as when the S&P was trading at its peak. What now with the heavy losses incurred? Who is to be held accountable to the shareholders?

I believe that BREXIT is a victory for Britain, a victory against the unelected officials of the European Commission, a victory against the bankers and elitists who think they know what is good for the global economy, a victory against the arcane financial experiment which is decimating the middle class and last but not least a victory for freedom, a choice to determine one's own nation's destiny and regaining Britain's sovereign.

I have deep respect for the British people  for their resilience. Switzerland is also not a member of the EU, yet it has the most millionaires per population. The other being Singapore.I believe Britain would emerge  form this stronger.