The falling pound is nothing to do with your vote for freedom

THE pound sterling would have fallen hard and fast if we had voted to stay in the EU. I am amazed it did not do so long before. More than three years ago, before the referendum was called, I advised you to keep an eye on the value of sterling as a true measure of our huge economic difficulties.

Since then they’ve grown worse – enormous state debts, enormous private debts, a disastrous balance of trade and a devastating current account deficit, which measures how much we owe abroad.

Add to that the £435 billion of funny money pumped into the economy by the Bank of England since 2009 in so-called ‘quantitative easing’, the smooth modern way of printing cash which is backed by thin air.

If you do these things, the currency must shrink in value, as surely as water will wet you, and as surely as fire will burn.

And now it has. I suspect it will get quite a lot worse, and the day when the dollar is worth more than the pound is now in sight. But currency markets like to wait for their opportunity. My guess is that, on the eve of the referendum, quite a few currency dealers bet heavily on a victory for the Remain campaign (as others did) and bought sterling in the belief that it would rise on the news. But others, more cunning or better informed, wagered the other way.

The resulting turmoil of rapid selling set off the avalanche which followed.

If the vote had gone the other way, then roughly the same thing would have happened by now, perhaps on the announcement of bad economic figures (there are so many, if you’re paying attention).

Everyone who understands the issue knows this. So they should stop saying – and you should stop believing – that the fall of sterling is your fault for voting for national independence.

This decision will have its costs – nothing worth having comes free – but a weaker pound isn’t one of them.