The plot thickens. Now the dirty, gritty work of sorting out what “Brexit” actually means for the UK and the 27 member nations of the EU begins. As I’ve mentioned on this blog before, as a result of this vote, Britain doesn’t have to adopt a new currency. Everyone landing at Heathrow will still have to produce a passport, that hasn’t changed. No bargaining chips there.
What are becoming political bargaining chips are the EU citizens living in the UK and vice versa. What rights will be afforded to these people? The UK has never been a country that easily grants residents citizenship, and they seem to be standing firm. EU citizens living in the UK that have children born in the UK have to go through piles of paperwork to apply for their kids to become UK citizens, which isn’t always granted. I have Portuguese friends that have lived in the UK for 15 years, both of their kids were born in London, but only one was granted UK citizenship.
It’s messy and I fully expect the upcoming debates between Brussels and Britain to be messy as well.
The Home Office, the UK’s official government body that accepts and makes decisions on citizenship applications, has been overwhelmed with EU citizens applying for UK citizenship and seems to have inadvertently added fuel to the fire by stating on its website “If you’re planning to apply for a document just to confirm your (residency) status, you can sign up for email alerts instead.” The effect of this was seen by some as discouraging EU residents from applying for citizenship.
While the negotiations trudge along, Prime Minister Theresa May has called for an election June 8, 2017. Her reason was that she, “needed to strengthen her hand in Brexit negotiations with European leaders. She feared Labour, the SNP and other opposition parties – and members of the House of Lords – would try to block and frustrate her strategy, making the country look divided to other EU leaders and making her government look weak.” 1 (SNP – Scottish National Party)
After the election on June 8th, the Prime Minister will have a better understanding of how strong her hand will be.
As of this writing, our Foreign Global Brands portfolio contains U.K. based companies: HSBC, Unilever, Vodafone and Diageo. We pay attention to these ongoing negotiations, the election impact and any potential changes to our portfolios through the lens of foreign taxation of dividend payments.
Value, Digital Currency and Blockchain Technology
I’ve always been fascinated by what people value and when they value it. A good book, silence, hiking, time with friends and family, 401(k) balances, etc.
Societies have always had different mechanisms for social value or social currency. Holding court, juicy gossip, etc. In 2017, social currency takes cues from the internet and social media. Many people value friends, follows, likes or Snap Chat streaks.
But to me, the most peculiar valuations borne by the internet are digital currencies. I can’t remember the exact date I heard about bitcoins, but it was sometime in 2010. I read about this new “currency” that was launched in 2008 by the mysterious “Satoshi Nakamoto” during the depths of the financial crisis. People’s faith in fiat currency was (and for some, still is) being severely tested. The peer-to-peer currency was built on a new technology called blockchain. I’m not going to get into the details of it here, as there are plenty of other sources to explain blockchain (see the link below). But what is apparent is that the creator(s) of the blockchain technology delivered a new platform that circumvents big banking institutions and governments. It’s important to understand the significance of this event.
It was the people trying to take back control of their money from centralized bankers and policymakers.
And now here comes a new form of currency, still shrouded in mystery from its origins to the way it can be spent. Back in 2010, it took 10,000 bitcoins to buy a pizza (some sources say 2 pizzas) from Papa John’s. Now through fits and starts, the underlying blockchain technology is close to going mainstream.
As I write this, the value of a bitcoin in dollar terms is almost $2,200, having hit a fresh all-time today. And there is no need for you to do that math to calculate the value of that pizza today as a twitter user named @bitcoin_pizza can remind you every day. Their last tweet from May 21, 2017 says the bitcoin pizza is worth $20,508,958 today.
The best video I’ve seen to explain blockchain technology and its potential is from Don Tapscott.