Catalonia dates not only its history to the 11th century but the movement to become independent also dates its background to its early beginnings. The word is irredentism as the Catalonians fought for 1000 years to be free from Spain. The Catalonians are clearly correct in the current fight for independence and every person in this world should yell from rooftops to Catalonia’s success. The great city of Barcelona has withstood the test of time continuously as a thriving economic city and vital sea port.
As Spain was ruled by Arabs from 700 to 1490’s, Spain’s subjugation of Catalonia was forced upon the people to gain access to Barcelona as the only available seaport, to ensure the spread of Catholicism, to gain territory and elicit support of fighters against Arab armies. As Madrid was landlocked and the greatest battles were fought for the sea port city of Valancia and Granada in the South, Catalonia also served as a possible escape route to France if the Arabs wrested full control of Spain. The move to take Catalonia was forced as a defensive move.
Through a series of many events over 1000 years since the 11th century, Catalonia never lost sight and fought continuously for its right to independence. Today’s independence vote is another event in a long line of attempts against Spain’s domination.
The arguments against independence due to lack of a central bank is a specious argument as Australia and New Zealand operated for 300 years through its Treasury departments before and after statehood. Australia became a state in the early 1900’s and formed its central bank, the RBA, in the 1960;s. Catalonia requires 1 bank as designated to issue bonds and finance the new government. Catalonia uses the Euro so no problem here.
The issue for Catalonia is political not economic as the stated figure is 10% of Spain’s GDP is provided by Catalonia. Yet Catalonia’s parliament and its own political system is already established since the 1920’s. Catalonia only requires the yes to independence vote and its on its way to statehood.
GBP/USD as mentioned in yesterday’s post would see 1.3200’s by an out of sync news release. Manufacturing today was reported higher than expectations , 2.8 Vs 1.9 expected Y vs Y. GBP bolted to 1.3202 then retreated to current 1.3180’s.
What is 1.3202 is quantified by today’s break points above at 1.3195, 1.3201, 1.3226 and 1.3252.
EUR/USD faces a rough road at first 1.1809, 1.1837 and 1.1853.
Will EUR/USD drop miles in a Brexit or EUR/CHF scenario upon a positive Catalonia vote. Nope, no changes.