Thoughts on 2016: Brexit, Donald Trump and Bitcoin

As I let the Brexit, and all the noise around it, sink-in over the last week or so, I have experienced some sort of emotional roller-coaster. On Friday I was initially shocked, considering I went to bed on Thursday assuming a Brexit would not happen. Then as Saturday went through, and I had time to get around the whole thing and discuss it with a few British and Non-British friends, I started feeling disappointed with the country, the politicians, the voters. On Sunday I was definitely quite upset (which then escalated to a next level when Argentina lost against Chile for the Copa America…again). However on Monday, as markets continued to fall, and people started making up hundreds of different possible scenarios, I realised something else: At the very heart of it, the biggest damage here was not to the UK economy, or the EU for that matter, but to the very heart of the institutions and, ultimately, our trust in them. This may seem contradictory considering it was a Public Referendum so let me expand a bit on this point before you start calling me names…

David Cameron committed to announce a EU Referendum, as part of his 2015 General Election campaign if his party won the majority of the seats, but also as a way of mollifying members of his own party. A referendum he was arrogant enough to think he would not lose (well that didn’t play out too well, did it?)

A few months later, on Friday the 24th of June of 2016, a set of very strange, even Argentinesque, set of events took place. On one side Nigel Farage saying one of his key campaign adverts pro-Brexit, was a mistake (which reminded me a lot to Anibal Fernandez, for the connoisseurs of Argentina politics). Then, despite initially announcing he would claim the Article 50 if Brexit won the Referendum, David Cameron decided to resign instead, leaving the weight of the decision to his successor and the country in a spiral of increasing uncertainty. Finally, Boris Johnson, who fervently campaigned for a Brexit, claimed on a very moderate speech that the event didn’t make the UK less European (well, it sort of does). Finally, when I thought things couldn’t become more bizarre, everyone quit; Nigel Farage, Boris Johnson.

So, in summary, a referendum that was driven by selfishness from the start, ended in just a set of lies (for any fellow Latin American, this might ring a bell or two). And although this has been oversimplified for any non UK/EU reader, the pattern is what matters the most.

The Brexit campaign, as well as Mr. Trumps’ Republican nomination, which both started as jokes and one already ended in “tragedy”… are at risk of jeopardising the trust we have on institutions. Not because of the result of an election (which one may agree or not but which is still a legitimate vote), but because candidates have based their campaigns on populist lies that aim at manipulating the electorate, with the Brexit campaign as the most recent example.

In this context, I ask myself: How can I trust the system will work towards what is best for people, when is governed by short term, selfish interests? And these set of events will not only have a social impact, but very strong economic implications too.

As the world immerses itself in post-brexit uncertainty, weighing the hundreds of possible scenarios and its probabilities, how the BoJ/BoE/FED & EU would respond to the shock, it is unclear: expansive monetary policy, lower interest rates, lower commodity prices, followed by even lower interest rates, more emission, etc etc. However in this context, a glimmer of hope breaks in the form of a trust-less, decentralised, digital asset, bitcoin. One that sees no lies, nor good nor bad decisions, just math.

We rely on central institutions to make the correct decision for us, however this institutions are often run by the same Nigel Farages/Boris Johnsons/Donald Trumps of this world. Can we blindly trust they would do the right thing when previous experience tells us otherwise?