Think of this as me practicing how to write about current events. After reading over this post I felt the disclaimer about regional differences is needed, so here it is: The below discusses monetary policy and recommends certain action mainly from a US-centric point of view. Your local currency and economy may behave differently than mine or most, so these are not really suggestions as much as broad-stroke observations and predictions.
For the unaware, the UK has passed a referendum to withdraw from the European Union, which is, at heart, an economic and legal coalition of European countries. Within the Union, some rules of law applies across all member nations, as well as free trade between member nations. This leaves the separation of UK from the EU in a state of uncertainty as no country has left the EU in this particular fashion, and the UK is a major economic power in the world.
Let’s take a look at some immediate and longer-term impact of the Brexit event.
First of all, there are some political dominos that may happen as a result of Brexit, but the one that catches my attention the most is the possible split of Scotland and Northern Ireland (and/or other regions) from the UK. There are a lot of others, of course, but this one is notable because if we think of the EU as a single economic rule, UK pulling out means now we have another rule to deal with in terms of international commerce. If the UK splits further then we may have additional entity or entities. Looking at it from the aspect of copyright regional markets, it is not a big change in terms of the status quo, but like all the other factors driven by uncertainty of the Brexit terms, at least, it makes licensing anime into the UK more complicated. Or at least, it’s probably not going to be easier than the status quo.
Things will fragment into more problems when we hit existing contracts that deals with the UK and its territories as a whole if the UK splits, but this is hardly the first time the world ran into a contract like that. It is probably less problematic than an EU-wide contract that some private entities may forge, as this would be a first-time. Guess the lesson here is splitting up countries and economic unions are rather pains in the arse, to put it lightly.
Stronger intellectual property law is a key part of the US international trade agenda. Weakening the EU by Brexit may mean that the EU have less of a leverage in such trade talks, although the EU is not an area with great concerns when it comes to protecting media IP or patent protection. This is a minor consideration I guess.
I think when it comes to music licensing it might be where things gets most icky, as far as media goes, but the impact of that probably won’t be very big. Then again, licensing music from Japan is such a Don Quixote-esqe task anyway.
The immediate hurt of Brexit is in how the world market react to this event. The drop of the Sterling and Euro, and the rise of the Dollar and Yen are all natural reactions, albeit extreme, at T <24 hours. In the near term this will definitely be a problem, mostly for internationals, but markets will even out after the first shocking days, as UK prepares for its exit plan and the EU leaders prepare in kind.
For those of us who import from Japan, it will definitely hurt as the JPY rallied the strongest among major world currencies, as it does classically in this type of scenario (and also because the Franc, well, is in Europe). Things to watch out for are your pre-orders that hasn’t been collected on yet, as well as any orders in this month that some vendors charge at the end of the month. If it is any consolation, the JPY to USD was as below eighty US cents to a hundred yen merely 3 years ago, so it is something most of today’s more-affluent collectors can deal with. The USD also rallied versus Europe in general, so the impact isn’t so bad there.
It definitely is not good if your home currency is the Euro or the GBP, so times like this it might help to hit up your local joints before prices hike. Inflation is likely to set in for UK in the near term, although you can bet that regulators will quickly respond to anything to that regard, so this is more a long-term worry. On the flip side, if you reside in Japan, now is the time to send money home. What currency you are being paid in matters a lot, and likely if you are a weeb in JP, you’re being paid in JPY, so you’re pretty safe.
Along those lines, interest rates will likely lower, especially if the Brexit triggers more widespread downturn in economies. That might be good if you are planning on a large purchase by loan, like buying a house; or if you want to consolidate outstanding debts for a better interest rate. The only concern there is that in some regions, rates are already really low. It will limit what countries can do to ease their currencies, and maybe we’ll see others try that negative interest rate thing.
The redrawing of trade borders can affect also eventers, if intra-Europe flights are your thing. Budget carriers may have to change rates as Brexit moves on as a process, so it might be good to do your flying sooner rather than later. As you can see if Scotland make a move out of the UK, it will make that even more messy. It doesn’t really impact those of us outside of Europe, but flying to Japan is likely not going to get any easier for anyone anyway. Besides the monetary concerns of flight, going to the UK from EU nations may also get more complex on the point of visas and such, but that will be a major point in the Brexit negotiations with the EU.
As a matter of currency speculation, the Pound will most likely get much of what it lost back in the very short term. Exiting the EU will be a long process and it means more volatility, but it also means things can’t stay rock bottom the whole time. It’s likely that the main damage will be people on trips this coming month, and some folks staying abroad who are living off the GBP. On the long run, there probably won’t be much of a difference when it comes to most nerd purchases from Japan.