Brexit Campaign Highlights the Role Emotions Play in Political and Financial Decisions
Last week the tragic stabbing/shooting death of British Member of Parliament Jo Cox brought an added emotional element to the Brexit vote scheduled to be held later this week. Ms. Cox was a supporter of remaining in the European Union.
News reports blurted that Ms. Cox’s suspected assassin shouted “Britain First!” as he mounted his attack. Quick research on the assassin revealed that he had ties to ‘white supremacist’, ‘pro-apartheid’ and ‘Neo-Nazi’ groups. The combined implication of the suspect’s killing cry and ties to ‘far right’ groups immediately triggered an emotional response in just about everyone.
For those in the Remain camp, the killing of Ms. Cox and the circumstances surrounding it triggered a reaction that Ms. Cox was killed for her political views. Some in the Remain camp charged that the Leave campaign was implicitly, or as some opinion makers asserted, directly responsible for her death, as Ms. Cox’s murder was a result of the type of hatred the Leave campaign had engendered.
Reuters noted astutely: “sympathy for Cox could boost the Remain campaign which opinion polls indicate had fallen behind Leave.”
For those in the Leave camp, reports of the implication or direct accusation that the Leave campaign and its supporters had caused Ms. Cox’s murder (in a sense accusing all those with Leave sentiment of being accomplices to murder) triggered a sense of righteous indignation. “How dare the Remain camp insist that Leave supporters be held responsible for murder for merely holding well-reasoned, legitimate opposition to Britain’s membership in the European Union?”
Brexit and Gold
Last week we noted in “Brexit and Gold” published here, that gold does well in times of uncertainty because “it is certain, as its existence doesn’t depend on a vote or any policies.” We might add that a vote based on highly charged emotions, such as the case of the murder of Ms. Cox has raised, is even more uncertain.
Gold has no emotional triggers. Gold is unemotional. Gold is, after all, a rock.
Political and Financial Reaction
People don’t always choose the correct course of action when guided by emotion instead of reason. Emotional reactions by voters or politicians can set in train a series of further actions guided less by reason and more by emotion, creating an environment of greater uncertainty.
In the aftermath of the Cox killing, a few reasonable steps were taken in order to provide a time out so that respects to Ms. Cox could be paid:
Brexit Campaigning Suspended
Against the backdrop of Ms. Cox’s murder, both the Leave and Remain sides agreed out of respect, to suspend Brexit campaigning. Planned campaign events were cancelled. When campaigning begins again, however, we will inevitably see a volley of emotionally laden charges regarding Ms. Cox’s murder and what it means to the Brexit vote.
IMF Withholds its Report
Last week the International Monetary Fund, an entity vehemently opposed to Brexit, was scheduled to release a report regarding its views on the impact that a Brexit may have on the world economy. The IMF decided to withhold the report. IMF President Christine Lagarde also declined to comment on Brexit ‘out of respect’ for Jo Cox’.
Brexit Polling Suspended
Polling groups agreed to suspend the publication of polls. When the latest polls are released we will see the impact, if any, that the killing of Jo Cox may have had on the Leave and Remain vote. If there is no change, little change or significant change, there is bound to be an emotional response from both sides to the latest polls.
The Impact of Jo Cox’s Murder on the Brexit Vote
The decision whether Britain stays or leaves the European Union and the attendant financial and political consequences will necessarily be based in large part on emotion. Emotional decisions carry greater risk than reasoned ones. As such, the outcome of the Brexit vote will have even greater significance as a result of Ms. Cox’s murder and the reaction to it, than it would have had absent her tragic death.
This leads to uncertainty and a reminder that:
Gold doesn’t take sides. Gold doesn’t delay. Gold doesn’t change its mind.
Gold is insurance against human mistakes. Human mistakes tend to occur more often during periods of heightened emotions. When things are going well, the need for gold recedes. History shows however, that unfortunately, things don’t go well for too long.
As Scottish poet Robert Burns wrote in “To a Mouse” in 1785:
‘The best-laid schemes o’ mice an’ men Gang aft agley’ or
‘The best laid plans of mice and men go often askew’
And when they do, you need gold.
This article by BGASC is not, and should not be regarded as, investment advice or as a recommendation regarding any particular course of action.