An empty quiver
This week I published, through Common Weal, a discussion paper on the potential currency options for an independent Scotland in light of the material changes in circumstances caused by the Brexit vote.
This paper examines some of the options open to an independent Scotland and concludes that, on balance, the best option for Scotland would be a Scottish currency, initially pegged to Sterling but with the infrastructure and mechanisms in place to move, replace or remove that peg if and when it proves advantageous.
(As the UK did itself in the 1980’s when the pound was pegged first to the US dollar and then to the Deutschmark.)
One of the requirements of an independent currency is that Scotland would need its own foreign reserve fund which would act as a buffer against trade imbalances and would be used to counter movements in exchange rate (particularly if we were pegged our exchange rate to Sterling).
It was on this particular point that yesterday’s Scottish edition of the Daily Express chose to focus, in its characteristically measured, balanced and thoughtful manner.
Their piece describes it as a “huge body-blow to Nicola Sturgeon”, suggesting that it would be simply impossible for Scotland to find this “huge sum”, and Conservative MSP Murdo Fraser describes the setting up of such a fund as “totally unrealistic” and that it would somehow prove “disastrous” to the economy.
(It’s odd that £10 billion for a foreign reserve fund is a disaster but £20+ billion to pay our share of Trident renewal is not only essential but somehow a good thing.)
I mention in my paper a few ways that this sum could, in fact, be found for Scotland (the Express does grudgingly mention some of them in a single paragraph right at the bottom of the article where most readers never actually reach), but I thought I’d take the opportunity here to lay them out in just a little more detail.
The foreign reserve fund of most western countries lies around 5% of GDP. Scotland’s GDP, according to GERS 2014-15, is £153.3 billion. 5% of this figure is actually just £7.7 billion, but I rounded it up to £10bn both for simplicity and to give a little bit of flexibility should anyone tell us that Scotland was just such a volatile and mismanaged economy that we’d need a bit more.
Off the top of my head I can think of four ways that Scotland could begin life as an independent country and start life with the reserves we need.
1. Shared Assets
The most politically co-operative solution would be for Scotland to negotiate a share of the UK’s movable assets when we leave. This would include a share of the UK debt, which would also be a significant financial burden (albeit one we’re already paying now).
The UK’s own foreign reserves total around £164bn, suggesting Scotland’s share would be around £14bn – more than enough to support our new currency.
2. Mortgaged Assets
Negotiating a full share of all of the UK’s assets in return for a full proportion of all of the UK’s debts may not be the most beneficial strategy for Scotland.
As an independent country we don’t need a 9% share of two aircraft-less aircraft carriers, we probably don’t need a 9% share of the London Underground (though I’d be tempted to claim the stop nearest Westminster and maybe hike the ticket prices a bit) and trying to claim our 9% share of Trident (14 warheads) may not be considered particularly diplomatic.
Instead we could start from a position of having no assets and no debt but then “mortgaging” the value of the assets we DO want against an equivalent share of UK debt. If we want a £10 billion foreign reserve fund, we take it from the UK’s reserve and claim £10 billion of the UK’s debt at the same time.
It turns out that apart from that and maybe a few military assets we likely don’t actually need all that much from Westminster. This could represent a very large saving on our current “bill” for the UK’s debt of over £3 billion per year.
3. Borrow it
So maybe Westminster just wants to take the ball (and the credit card they bought it with) home in a huff and refuses to part with a penny of foreign reserve assets. Fine. Scotland starts with a clean slate and no debt. We’re now in a particularly advantageous position of being able to borrow on our own terms and raise the money that way.
True, we don’t know what our initial borrowing rates will be but consider the situation that the UK is in right now. As of writing, the cost of borrowing for the UK is at a historic low of 0.72% but, due to still paying off older, more expensive bonds from prior to the 2007 recession the total average interest paid by the UK each year is closer to 2%.
If Scotland’s initial borrowing costs are a little higher than the UK’s rate on the day of independence but lower than the average rate then we’d be better off simply borrowing the money on our own terms. Another advantage of this option would be that we’d owe Westminster no debt at all therefore they’d have no diplomatic leverage over us should they ever wish to use it.
4. Buy it
Our final option in the event that Westminster throws an almighty hissy fit, refuses to part with a penny and sends the financial world into so much of a mess that maybe we want to avoid borrowing money if we can avoid it.
In this case, Scotland would look to the effective monetary surplus that we’d gain on independence. I’ve already mentioned the £3 billion per year we’d save on debt interest. Our contributions to the UK’s military adventures, compared to what Scotland would actually need to defend herself, probably totals a billion or two, and there’s likely more to come once we see the actual account books rather than the guesstimates we have right now.
All in, if we play our finances smart and accept that we’re going to have to invest in some high-priority items like fiscal security, we could probably raise the £10 billion within a couple of years of independence.
It’s not perhaps an perfect solution to not have that buffer on day one, but the likelihood of a speculative financial attack on a country is negatively correlated with the likelihood of prudent and sensible governance in that country. Scotland, especially post-Brexit, has a particular reputation in this regard and this scenario would only come about due to disastrously incompetent governance down south.
(I don’t think we’d be the first target of such an attack, although in this case I’d probably counter my own report by suggesting that we may want to reconsider that peg to Sterling. It might have a bit further to fall than we’ve seen recently.)
It’s natural that the Express would want to try to portray anything said about independence as a “setback”. It’s rather more difficult, however, to actually defend such a position under the most cursory of examination. Rather than a “setback” for independence, I believe that my work has shown just what a great opportunity we have ahead of us should we choose to embrace it.
As some curiously strident pet-food salesmen might be keen to point out, I might not be in the traditionally, formally-trained sense an “economist”. But if even a mere laser physicist can see this opportunity, I’m sure that others – perhaps even some of the brighter Conservative MSPs – can spot it too.
Excellent reasoning. Many thanks.
How much would we charge to house Trident until they find a suitable base in South Britain ?
Another excellent article by Dr Dalzell. I enjoy his annual debunking og GERS, but this is even better ?
Good article. Very similar to the Scottish Greens’ position in 2014, and now.
Potato potahto… an alternative (albeit rather more measured) spin to counter the Express spin. Both saying exactly the same thing, but from a different perspective. Don’t you find this constant back and forth tedious? It assumes a worryingly low level of critical thought from voters that i don’t believe is justified. Furthermore anyone unable to see through the express piece is unlikely to a) read your analysis or b) understand it.
Excellent reasoning. The writer is the sort of person we need to have on “Team Yes” negotiating Scotland’s withdrawal from the bipartite union — certainly not Gordon Brown, Tony Blair, Darling (all of whom will no doubt offer their “services”).
The economic and financial case for an independent Scotland is such that it is actually pointless even listing the many, many arguments.
The question is: why on earth would a country like Scotland NOT want to be independent?
I’m in. Lets go.
Would pegging our new currency to sterling provide stability to Scotland and England?
Could we use that stability as a bargaining tool in the divorce?
I expect Westminster to be spiteful regardless of future ramifications.
Bunter
The next issue of GERS has been brought forward to next month so you’ll be getting your next installment rather sooner than expected.
Fffff file under s for sooooooooperb.Stick that in yer pipe and smoke it Unionistas!
Good stuff.
I am little more inclined to go with pegging against a basket of currencies (to help smooth out some of the undoubted volatility of sterling when Scotland becomes independent and the market realises what rUK has lost). But I ain’t no export on these things!
export = expert
All Scottish banknotes are backed pound for pound by high value BoE notes called ‘Giants’ (£1m) and ‘Titans’ (£100m) on deposit at the BoE. These have a total value of around £8bn.
Does this not mean that Scottish Currency is in effect a gold-standard currency?
These Sterling notes will become foreign reserve currency on the creation of the separate Pound Scots.
Am I missing something?
Well Dr Craig, we expect no less from the MSM. Always hysterical, and always a blow for Sturgeon. After all these blows, it’s a wonder oor Nicola is still on her feet.
But to more serious things. I don’t think that there is much doubt that Westminster will lift THEIR ball and have a tremendous hissy fit. The likes of us having the temerity to want to be independent and look after our own country, How very dare we.
The nice thing, for me anyway, is that indy ref1, we had to sell the notion of independence. Unfortunately, not everyone wanted to buy it. But now, it’s perfectly normal to be talking about it. That is a big move forward.
I think option 4 is beckoning to me, but I need to study it more.
I would not like to see our new currency pegged to the £ sterling cause it’ll be going down the Swanee, but pegged to something else. Our choice. As for raising the £10 million, well let’s charge the buggers at least £5 million a year for housing their beloved Trident. Job done in record time.
Anyway Dr Craig, thank you for a well presented and thought out case for the way forward with our own currency. Has to be the way to go. We need more of this, and less of the yoons decrying us at every turn.
Onwards and upwards.
I am a bit concerned about pegging a new currency to sterling especially if England cant secure single market status or at least keep sterling under the single currency ERM,if out on its own jeez.
Though this is actually a very strong bargaining chip for us because if we as indy Scotland in the EU are pegged to sterling it might save their backsides,its the reason we said we would use sterling in indyref1 which they flung back in our face and scoffed,as we would have still been protected but they were desperate no manic to close that path with their no EU no pound what are you going to do Scotland the markets will savage you.
Well that is reversed now and sterling might just need Scotland to come to its rescue,big choice for us and probably why the britnats with a brain are incandescent with rage as we have the choice to throw them to the sharks if we want to.
Maybe they should start being nice to us.
An excellent piece which has obviously been well researched and written in a clear and rational manner. Unlike the Express story, of course. Love the Express using ‘plot’ re. next referendum. Thanks, Dr Dalzell, and I’ve already posted this link to many friends.
Good article. Personally, I expect WM to through a hissy fit. With their Brexit chaos and Scotland staying behind in the EU, England will be like the proverbial bear with a very sore head.
I expect we will depart on a no assets, no debt scenario. A clean slate.
I think Farage may actually have got it right as he was caught off mic replying to Alyn Smith’s EU speech!
@Croompenstein
I argued this against those who (imho unrealistically) want Trident gone on the day of independence. We should take all opportunities that presents itself in the immediate post-independence era. Mod/UK Gov said it would take about 8 years to remove Trident to a new purpose-built safe harbour. At the time (2013) I argued on this site that we should impose a rental charge for use of all Scottish bases that UK/NATO currently use. The figure I came up with (which would be reasonably affordable) is £150m per week, or around £8bn per year, over 8 years that would be £64bn. Scotland would then be rid of nuclear weapons forever and be considerably more £richer.
Because Trident can’t be moved we can charge whatever we like.
@Martin Richmond –
Ah, you’re back, with your irrepressible positivity.
How many Irish grandmothers does it take to change a lightbulb?
‘Don’t be bothering with that, I’ll be alright here, all on my own, sitting in the dark, so I will…’
(And yes, I am ‘allowed’ to tell that cause I had an Irish granny, so I did!)
Albert Herring: what you say is indeed true, although these BoE notes are themselves essentially “fiat” currency (backed not by gold, but by the future tax payments of British citizens).
The very additional advantage of a purely Scottish currency is that if the whole Western fiat system collapses and the Eastern nations move to a more gold- or commodity-based currency system, the Scottish currency would be “backed” by oil.
I too agree about the long-term impossibility of pegging a Scottish currency to the (sinking) £. A basket of currencies (with dollar, euro, yuan) would be better.
A copy of this article should be put through the letterboxes of all Mail and Express readers.
Ian Brotherhood says:
“I had an Irish granny”
… lucky you! You can apply for an Irish passport if things don’t work out.
Sorry Dr Craig Dalzell, unless I see the stamp of a Westminster trusted source on an article, then I know it cant be trusted.
“Unrealistic frankly … I’m astonished !”
We proudscots are not programmed for such clarity; this is all far too transparent.
“Oh no no no no, this won’t do at all”
“Moneypenny; Get me Pacific quay on the phone, Sarah Smith, Doulgas Fraser even Kaye Adams …anybody”
Now if you name was the name Mr Kevin Hague, or Dr Scott Arthur I’m sure the BBC would be all over this idea like a rash!
This is cyber bullying at the extreme; in fact get me Ian Murray .. I can feel a sticker attack on the front door coming on.
All verging on the sensible !!
Klaxon, Klaxon, Klaxon !!!! Rhona help me !!!
They would need to go through our independent customs and immigration booths set up on the gates into Faslane.
I wonder what the tariff should be on nuclear fuel.
How would you like to pay Captain?
Bank draft or cash, not Pounds Sterling by the way, Pound Scots is acceptable though.
Enjoyed the post Mr Dalzell and couldn’t agree more.
This one’s a keeper. 🙂
Good article
We must continue to debunk this TooPoor mentality in Scotland.
the Yoons are already projecting fear and financial uncertainty and we haven’t even pulled the Indy ref 2 trigger yet.
The biggest lie from the UK establishment is that we are a basket case and will not survive .
Somehow we need to counter that claim before the start of the next campaign or we will lose again..
They keep using that word. I don’t think they know what it means.
A setback implies progress is being made towards a goal. It doesn’t necessitate that goal be abandoned or that it isn’t achievable. An example the unionists might appreciate is Dunkirk.
The stealth here is in the assumption that Sturgeon actually wants Scotland to have it’s own currency.
“Greece without the sunshine”?
I prefer:
“Qatar without the bigotry”!
link to rusartnet.com
Since the Bank of England is a nationalised entity, we should start with 8.4% of its assets. Default on that debt to us and England Finances become the proverbial “basket-case” and a defaulting debtor. Where will that take their credit rating down to?
Thanks, Dr.C!
I read this a few days ago on Commonspace and your article above is a great addition. Thanks again for all your efforts and keep up the good fight. We need as much informative ammo as possible and this time round we all need to be on the ball, every last one of us!
9 Scottish currency options explained
link to commonspace.scot
I hate the express and it’s agenda more than any other paper of late.
It upsets me because it’s negative message is one that gives ammo to the unionists thinking it’s impossible, we can’t or look we won’t when the full story isn’t given.
It makes a villain of our First Minister when we know her interests put Scotland First and it tries it’s best to just blurb anything out there to satisfy killing the argument but they miss the key messages.
With Scotland remaining within the EU as a nation we’d have business opportunities attracting people to move and relocate to Scotland. There’s the cost of hosting Trident until a port is ready and a list as long as your arm of things that we wouldn’t need to pay for which includes the new Nuclear power station whilst Scotland looks at restarting it’s business of building for renewable energy.
It’s papers like this which we need to be ready for. They are already making the agenda and we need to be strong voices to knock the story down.
More than ever I think we have to be organized.
link to twitter.com
[…] Wings Over Scotland An empty quiver This week I published, through Common Weal, a discussion paper on the potential […]
to soon to go off topic, but on kezia dugdale twitter feed thing, she posted a photograph of her next to a winger?
Geez! Tony Blair could only think of up to a third way but here are four ways to get to where we need to be.
Count me in anyway!
ps: O/T New
SNP set to ban the word ‘benefits’ from new social security agency
link to archive.is
Another well written and insightful article from one of my favourite writers.
His annual pilgrimage to the alter of GERS is an annual highlight but this is outstanding.
I would say a blind drunk Romanian retard would understand the potential…..whether anyone gainfully employed at Westminster would is open to debate.
None so blind and all that.
Just a wee reminder of tomorrows Indy supporting March in Glasgow.
The cause needs your support guys as the media will be watching closely – so a big turnout is a must.
They’ll gloat if turnout is poor. This time its crucial to build impetus.
Excellent piece Dr Dalziel, for which many thanks.
One look at the author of the Express piece and a little investigation on his credentials, tells you that he has no expertise in finance.
He graduated from Stirling Uni with a degree in journalism.
Full stop.
Come independence trident should be sent to the breakers yard and Westminster sent the bill.
@Martin Richmond
It assumes a worryingly low level of critical thought from voters that i don’t believe is justified. … Brexit?
It all doesn’t really matter though does it, because whatever solution or decision the Scottish government come up with the Britnat media will instantly set about rubbishing everything about it even if it’s completely bulletproof
Those who are FOR Scotland will be, those who aren’t WON’T
The only folk the media are interested in causing doubt in their minds are the NOT SURE’S
Convince them to either vote NO or NOT to vote if they’re not sure and Badaboom they’ve done it again
My belief is it’s not currency that’s the question and never was, it’s CONFIDENCE and surety and that’s what Westminster uses to pretend they’re right
The next vote will have to be about timing, just as the Westminster lot are Buggering everything up and things are obviously bad, has to be the time when the SNP make their hopefully well prepared case with the finance issue easily understood and well laid out, but even then overcoming the media will still present a massive hurdle because in the past as now they don’t have to prove anything, they just have to flood the airwaves with SNP Baad and incompetent then stand back to allow the confusion to take hold
Let’s face it when the BBC bring on a dog food salesman and call him an expert on finance or a long haired geography teacher and call him a historian or fill their studios up with “Axe to grind failed politicians” and call them respected or Presenters who make faces every time the SNP is even mentioned, finding a strategy to combat this is not going to be a doddle
Us lot are easy, we’d pay to be Independent, the other lot would pay our fares to go (Nah they’re too mean)
This time next week britnats will have it up to £20 billions.
@ Ian Brotherhood Jist hud oan there Mr, Briandtt & masel went tae ah lot of trouble tae get Scottish Passports fur Sat ( at much cheapness fur Wingers) get there early.
Any Wingers wie Caligraphy skills would be more than welcome.
[…] "It was on this particular point that yesterday’s Scottish edition of the Daily Express chose to focus, in its characteristically measured, balanced and thoughtful manner." […]
@ handclapping
It’s a foolish politician who assumes his opponents supporters must be stupid; or campaigner who believes only stupid or gullible people could possibly oppose their position. These were the primary failings of both the Remain, and independence campaigns.
These are lazy arguments that tend to display a lack of understanding of the arguments against ones own position. Without such insight it is almost impossible to persuade others.
when I heard the £10 billion figure quoted this morning my immediate thought was that the sum could be found quite easily. In fact I wouldn’t mind betting that it’s a lot less than the Scottish economy has lost due to Westmisters catastrophic economic austerity measures.
Can I draw attention to an event hosted by Yes Rutherglen on the same topic, on Thursday 25th August.
Details here:
twitter.com/YesRutherglen/status/758061177041739776
With more to follow.
We need to promote these ‘big ideas’ to folk in a way that dispels the project fear nonsense of the last referendum, and continues to normalise the fact that Scotland will be a perfectly capable country outwith the UK.
Well said craig
I think I made the point via tweet that floating would be better over the longer term due speculative pressures involved in maintaining a peg but I can see the advantages on the short term of fixing to sterling.
Obviously once the currency floats we don’t have the reliance on foreign reserves as we don’t commit our central bank to exchange scot £ into sterling. In this sense with a floating currency there is no solvency risk.
Try having this debate with a mail or express reader.
Of course your paper makes perfect sense but no doubt it will be contorted by msm.
I’m no economist either and the fact is very few mainstream economists actually understand banks debt and money..
If the Scottish government introduced a model of Annual Ground Rent now at a rate of £3.93 per square metre of urban land type now it could raise enough to abolish Scottish and council taxes, repay Scottish taxpayers all UK imposed taxes, have £10 billion reserves and still have an extra £2 billion to increase public expenditure. visit http://www.conveyancingdirect.co.uk and click Annual Ground Rent.
Of course they don’t want to focus on the subtleties of the post-Brexit vote, pre-Brexit actual slump in the value of Sterling and how the arguments based on an independent Scotland needing to keep it no longer seem as sound. Or that if we were to use another currency rather than one of our own we’d be as well using the Euro. Or that whilst that $10bn might seem steep that’d have to be weighed against the advantages that having full control over your own currency gives you. A lesson browbeaten in to us during the previous independence campaign. The problem is that some of these people seem remarkably ignorant of exactly the arguments that went on then and seem intent on arguing in the opposite direction now. Just as they don’t get how pro-EU the arguments on both sides where then and are surprised that the message stuck.
Thanks for the thoughts so far. I appreciate them.
I’m particularly interested in the debate over how to approach the peg. It does seem like there’s a lot of support for some kind of trade-weighted basket peg and, especially as the economies of iScotland and rUK diverge, there’s certainly a lot of economic merit in that.
It was for this reason that I kept just a little cagey on the length of time that we should remain pegged to Sterling (my wording was “perhaps years”). It’s probably more important that we ensure that we have the mechanisms in place so that we know when and how to make the switch. (And, of course, politics is always at least as important as economics in these matters)
I’m interested in sounding option though. What do folk think of the Sterling peg as even a short term measure? How many think we should bite the bullet and start independence with a basket peg or a floated currency?
Finally. Are many folk discussing this kind of thing with undecided or No voters? What are the thoughts outside of our sphere?
@Martin Richmond
A change of tune there from your first post.
Brexit was a prime example of the lack of argument. That the Westminster Government is now scrabbling around trying to find out what Brexit means, means that the Brexit “debate” had no testing of arguments and yet the voters, in their wisdom and in large numbers, decided they had enough information to make a decision.
The state of uncertainty we are in a month later disproves your noble belief about the wisdom of the voter. As an alternative belief system you could try the following prophecies in the Book of McTernan
As of July 2016 the UK holds very close to 10M troy ounces of gold. 10% of that (to make numbers easy) at today’s price (£1015.57/TOz) is £1,01657^9 ie £1.01657 Billion. That’s a decent start.
I’m all for a Sterling peg to start with so there is correspondance between the pound (GBP) and our currency on Independence Day.
If we accept a GBP peg then we need to set our unit at a higher value than £1 to allow for the GBP’s inevitable depreciation. I suggest a Scottish Thistle (SCT) set at SCT1=GBP10 so 1p=1mil, 100mil=1GBP and giving us the trade advantage of a heavy currency.
It also allows us to use GB coinage untill we mint our own or unpeg.
Craig
One of the most common questions I got during indyref 1 was “where’s the money coming from?”.
There is just so little understanding about fiat money systems. We have a mountain to climb!
The mmt position always seems to be in favour of a floating currency.
Bill mitchell’s recent articles about iceland are an interesting read.
@handclapping
I disagree with everything in your last post. I didn’t say voters were universally wise, but its naive (and self defeating) to think that only those on your own side of an argument are well informed.
Oh dear you will upset the Yoons again Rev.
Dan Huil says:
29 July, 2016 at 1:27 pm
“This time next week britnats will have it up to £20 billions.”
Whit? Only £20 Billion? You underestimate their talent for hyperbole man.
Well £10 billion should not be too hard for us to find, as someone above pointed out the Bank of England is a nationalised entity.
That would should fill a good bit of it. It also has around 324 tons of gold of which we would be entitled to a share. Many Many other things.
Then there is the way the UK bleeds us at all turns, we would be stopping that for sure. I do not know how much that would be, but experts would assess this, and find ALL the ways they steal from us, there is no other way to put it. It is sure to be substantial.
We could swap £10 billion for for £10 billion of their assets, but suspect when figures are properly assessed it will be way more than that. They would still owe us a good balance in cash.
Then of course there is Trident, which I personally would want gone very quickly, altering the fact that we are a first strike target at the moment. I also want their rusting nuclear subs in Rosyth gone just as quick.
They fiddle our GDP and subsequently GERS, and any other thing they can.
At the end of the day we will save shed loads of money by simply not paying for all we currently, get taken from us.
Given a review of Scotland’s finances after Indy, we will look very a very good bet as far as the currency goes.
My own preference would now be the Scottish pound, pegged to a number of currencies the pound included. That could be flexible depending on how badly Westminster tries to spites us, it may not include the pound. It is very risky now, it will be much more risky then.
So I think we hold a lot of the aces, and they know it. That will not stop them trying to cheat us. It is what they do.
Oh, one other thing we would want is the stolen 6000 sq miles of our seas back too!
There will be bumps, but Scotland has huge potential.
The Scottish Government, central and local, have circa £20bn assets in property and land and that is likely a grossly underestimated figure. Much of that is under-utilised and surplus to requirements, particularly land which is not held at marke value – more than enough collateral to start a central bank. Not sure of the current rules but SG is probably prevented from benefiting from asset sales as it’s likely to affect the block grant. Once we are independent we can start to think out of the box and make our assets work for our benefit.
I wonder if the Bitcoin is a possibilty as a “currency” against which to peg the Scots currency? If not, the Swiss franc seems the most stable. I don’t think Sterling is stable or secure.
What about the name? The Pound Scots has too many bad associations with the Pond Scots in the past. How about a new name such as “the Scoti”, with the lesser valued coins, “the Merk”; 100 Merks =1 Scoti.
Second referendum plot?
Is that all they have in their arsenal?
I think the express missed an opportunity to paint horns on the FM and perhaps they could have also used the word fiendish in that headline.
Ah well, tsk tsk.
Just to post a link which Valerie posted in the last thread… Worth a read.
link to cer.org.uk
I get a bad feeling about Theresa May and the right wing yacht club’s capacity to steer the good ship UK off the rocks. I think the UK is in big trouble.
There is a common feeling that we must be out of the U.K. before the UK exits Europe, but I’m not sure that’s going to be the critical watershed event. The U.K. has paddled itself a good distance up shit creek, and its economy could very shortly be in for a white knuckle ride to an uncharted destination. Article 50, for all it is discussed, is only a tiny little cork in a rather big and ominous looking bottle. It is however a cork, not a safety valve.
Let’s say for arguments sake, Scotland had voted YES in 2014 and was currently right now in a transitional currency Union with England. England’s decision to exit Europe so rashly in the way it has would have caused tremendous anger and anxiety about Scotland’s economy being hostage in a currency union governed with such a reckless abandon as to isolate Sterling from the Trade deals it enjoys, have no alternative trade deals to fall back upon, and even worse, be prevented from negotiating any Trade deals before formally ending its EU membership. There would not be a time for complacency. It would be a desperate rush to get “out” of Sterling and “in” to anything else.
I don’t think there would be many cool heads milling around saying let’s wait and see what happens. I strongly suspect there would be one god almighty rush bordering on panic to extricate our Scottish economy for our currency deal with rUK, and get our economy pegged to virtually any currency which was NOT pound sterling before the proverbial shit hit the fan.
This storm IS coming. I hope Nicola is doing a lot more than having cosy chats with European leaders. We should right now be mobilising our country for Independence, and I don’t mean the referendum campaign, I mean the real deal, practical autonomy, ring fencing of our assets, who gives what keys to whom for all buildings and the vehicles; the physical act of taking control of our country.
We are an involuntary part of a Brexit conclusion which nobody was ready for, and to her credit, Nicola reacted quickly and well. But please, let us not find ourselves in a similar predicament of suffering ground rush from an approaching Independence and not being braced and ready to hit the ground running. When it happens, it won’t be a drill, and Westminster might very well be in chaos.
@Martin Richmond,
Should Scotland be an independent country?
Craig. You mention possibly not taking a share of UK assets. I get this as movable assets,cash, helicopters, warplanes etc. But what about other immovable infrastructure that the UK currently own? Buildings, army bases etc. What would happen to all that if Scotland never took its share of UK assets
@Martin Richmond
Even with all the readers of WoS and 2% of the population in the SNP, 95% of people don’t care about politics 99.727% of the time. As the Remain and Leave campaigns showed its not about information but interest as the saga of the £350m bus showed.
If we are going to charge for hosting Trident post Independence, I suggest that we add the cost of site clean-up.
@handclapping 2:44pm.
So lets get our own buses, with our own messages, out onto the streets. (Crowdfunder anyone?)
Borrowing at such a low interest rate, seems criminal not to,
Scotland would be billions better off if the English decide to play hard ball over sterling,
even though it belongs to UK not England,
this would make it imperative we get Indy2 sooner rather than later before interest rates change for the worse,
even Norway with its trillion dollar oil/pension fund borrows,
NATIONAL DEBT OF NORWAY
$ 54,814,248,998
it is cheaper for AAA+ Norway to use debt than pay for things out of their assets/investments.
o/t slightly
One of the reasons costs can be high in the high echelon’s of the civil/public/pat my back sector is the gravy train of such appointments. The ordinary employees get zero % pay rises the top dogs have several jobs
link to nls.uk
What a bunch of comedians
I worked in banking in IT on the money movement systems side for many years.
My take is that we need to take the markets off-line. All this high volume trading is just a huge Ponzi scheme. It has absolutely zero to do with the real world.
Investment is for the medium and long term. It will work much better in a less frenetic environment.
Nie article, Doc. (See what you’re missing, Kev?)
Whatever we do we do not entertain A CURRENCY UNION. That simply enables WM to control the agenda a tell us “No!” (even though we know they’d change their collective mind as soon as the YES result was declared). We don’t want to be on the back foot come IndyRef#2. No hostages to fortune; no giving them any sticks to beat us with.
Great stuff. Change the Scotland “would” to Scotland “will” though.
The foreign reserve fund of most western countries lies around 5% of GDP. Scotland’s GDP, according to GERS 2014-15,
Who gives out the state for GERS? The Treasury and they are almost certainly a lot lower than stated. T
Anyway, what about all the VAT on £40bn Scotch? its a massive amount!
Just thought I’d give Kevrage something to get all Mr Angry about there.
Should smoke out Colin Ripley at the very least.
Craig and another point wouldn’t we need some of these movable assets? Ok you mention aircraft carriers and trident. But surely other military hardware we would need on day 1 to defend ourselves, otherwise we would be defenceless and a sitting duck
As already stated above, currency is fiat. It’s just bits of paper. So they want us to print some notes. Is that it?
Next problem?
Thanks for the informative article, Dr. Dalzell.
Whatever is the chosen option re currency in a post-independent Scotland, the Scottish government will need to thoroughly prepare its reasoning, and then be as clear and concise as possible in explaining the whys and wherefores to the Scottish population – well before the actual day of IndyRef2 itself.
For many, the intricacies and benefits or otherwise of one currency over another are not easy to comprehend, thus if the currency decision can be explained in as near layman’s terms as possible then all the better.
People are not stupid – far from it – the currency issue was one of Yes Scotland’s major disadvantages last time, the uncertainty pushing many undecideds to No.
This time, it has to be done right. The SNP must say it will be currency x, because reasons.
Get that out there early and it gives a greater sense of certainty to the population of what to expect in an independent Scotland. Then watch those Yes numbers increase.
I would really want us to have the gold standard, currency based on that. Gold has been real currency for thousands of years, as has silver. But while gold is king, silver has it’s place too, although more volatile than gold.
All the rest are fiat currencies that have all failed over time.
To protect yourself, physical gold should be part of it, silver if not. To protect your country is just the same. A hard asset that is in demand and proven.
As time passes, we really should adopt this, good gold reserves would be an asset worth having.
@Proud Cybernat
RE: Currency Union
I’d be surprised if that even crossed the horizon of current thinking on the part of the FM. HMG and BT invested a lot of air time and column space in that narrative they cooked up. Bluff or not its an option that has been taken off the table by those actions.
I suspect the creation of a pound Scots (which the SG are rumoured to be exploring), is more than likely to be their route of travel. I also suspect the reasons for exploring this avenue wouldn’t be a million miles away from Mr Dalzell’s ATL. 🙂
Great article..
Newspaper headlines are a billboard in every shop.. Whether truth or lies they pass on messages and set the agenda
Maybe they are expecting the millions of gallons of water pumped south will be free aswell. They can go ahead with their canal but it will have a meter ‘kerching kerching’ at the border
John Bannatyne
We may need some military assets (think guns, uniforms, tanks , some jets etc) just not aircraft carriers so our “share” of those particular assets can be dispensed of. Instead, we could just value up they stuff we *do* want and mortgage against that (or buy from elsewhere)
As for immovable assets, the convention is that control of them does simply default to the state that they are located in (unless bought or rented back. as some have suggested we could do with the Trident base).
bjsalba
Re. Financial Ponzi Schemes – I would heartily suggest that one of the first thing an independent Scotland institutes is a Financial Transaction Tax on the £Scot to limit the impact of such hot money. It won’t raise the £10’s of billions that it would if placed on London but it would do a lot to stop Edinburgh becoming the City’s little, just as dodgy, brother.
Les Wilson
I do look at a gold standard in my paper and would suggest John Chown’s A History of Monetary Unions for more. Every Emperor since Nero has reacted to gold by debasing it and every one of them has felt the consequences of doing so. It’s worth studying but it’s not a magic solution.
Scotland is due a share of UK assets. This from 2013
link to official-documents.gov.uk
The list is based on the UK National Asset Register, which was last valued in 2005 and showed a total national UK assets at £337.104 billions. Scotland’s share at 8.4% would be £28.316 billions
The departments of Defence and Transport own the most assets. Defence has £93.4 billion, including £29.1bn of “one-use equipment” including £1.6bn of guided missiles and bombs.
The UK Government’s well-stocked wine cellar, which totals 39,000 bottles was worth around £800,0000.
However the UK government has said that it will not publish a new National Asset Register of everything it owns, leading to claims that the document has been cancelled to prevent the SNP government from using it as a basis for forming a negotiating position ahead of the independence referendum next year.
The register, which includes every item of equipment, building and land owned by the government along with their values, was expected to be published this year, but the Treasury said it was too bureaucratic.
The information it contains on defence equipment and foreign embassies was seen as vital for the SNP’s negotiating position on what Scotland might inherit or what monetary value might be due for assets kept by the rest of the UK.
Wasps! Can we have freeze dried wasps as currency? Cause we’ve effing huners of em this year, it’s our chance now. The wasp standard. Nobody could counterfeit a Jockanese Wasp. Irritating wee buggers.
Also Scottish Banks already have over £4 billion deposited with Bank of England in an interest bearing account as cover for note issuing. So a Scottish Central Bank could lay claim to this money as collateral for Scots Pound.
link to bankofengland.co.uk
Probably the greatest myth adopted by NO voters during the indyref was that no currency union equated to “but we won’t have any money”. A myth compounded by bankers and politicians who see the words money, currency, banknotes and coinage as interchangeable terms, ensuring the public remain mostly ignorant of the distinctions between them.
Money and currency are not the same. Currency, whether pounds, dollars, euros et al is a measure of the value of money issued by banks within different fiscal systems. Currency cannot mean money while being a measure of itself. Go to a shop to buy potatoes and they are measured in kilograms or parts thereof, yet we would never use the terms potatoes and kilograms interchangeably as we are intelligent enough to recognise the distinctions.
Banknotes and coins give us a means to transfer our wealth, but they are just pieces of paper and metal, they have intrinsic value. They only work in everyday transactions as we are conditioned as members of society to follow the rules.
Money and wealth are interchangeable terms. They mean the same thing whether discussing stored wealth in savings and home equity or potential wealth of your future earnings when seeking a mortgage. Bankers and politicians want us to believe that wealth (money) is created by them, that it is given to us by our benevolent masters, yet true wealth comes down to one very simple formula:
Wealth = Resources + Labour
where resources are derived from the landscape in which live, and labour, traditionally, is your daily efforts to convert those resources into things you can use, sell or barter. Though we somehow got to a point in our evolution where the few own the resources and for the rest of us our wealth is derived from our toils; that’s assuming our political masters consider us worthy to earn a fair wage for a days work, or even have jobs at all.
When the media look at the resources of Scotland then we get more sneering put downs of (nonsense)dwindling oil supplies and plummeting oil prices, yet oil is just the tip of the iceberg of our resources. We have very fertile and abundant farmland, plentiful rain and natural water storage (rain is a resource not a curse), productive forests, fertile seas, good road and rail infrastructure, engineering facilities, great universities and research facilities to name just a few. Oh, and the people, those of us who labour to produce our food and exports, who provide our health care, who educate our future scientists, engineers etc. Our people are our greatest resource as they ensure our future.
And yet, with all of the labour and resources generated in Scotland the myth persists that our wealth is generated by our larger neighbour.
If you want people to understand the complexities of future currency scenarios you first have to make them understand that Scotland’s wealth is generated in Scotland, and how. They will not understand the currency argument if they don’t understand where money comes from.
Last working day for `Right to Buy`your council house,
rtb@scotland.gsi.gov.uk.
450,000 Scots for better or worse became proud house owners,
started 36 years ago as,
`Tenants’ Rights, Etc. (Scotland) Act 1980`
abused by some but welcomed by many thousands of Scots.
You know I hadn’t thought of our share of UK assets in this way. Right enough a share of an aircraft carrier with no planes. A share of a War Canoe (our other name for boats {submarines}).
~ if I’m using too much -£/)/;/;)/£-&-& things like these it’s cause
I’m building a driver from source code
to run against Kali Linux Kernel header.
Which is harder than creating a new Scottish Currency, that I can assure you.
Are we going to trade the old decaying boats at Rosyth?
What about compensation for depleted uranium shell testing in the highlands?
List is endless, please just end this rancid Union.
Excellent article and analysis. Why would Scotland not want to be independent? Exactly.
@sinky -thanks for that link.
I’ve been looking for that.
Interesting how in the last paragraph they say £4.000+ million rather than £4 billion
With all the blatantly outlandishly misleading headlines in the Yoon media, it is beginning to look like the only way the Yoons can stop Scotland becoming Independent is if they prevent the referendum or rig it.
@ JM
Excellent post!
Now I know why I’m usually always skint.
@Dr Craig Dalzell
My objection to the Transaction Tax is that it penalizes the long term investor unjustly.
@ Proud Cybernat
Thank you.
Just to add to my earlier rambling – Thatcher changed the wealth equation from
Wealth = Resources + Labour
to
Wealth = Resources + Profit(and fuck the people).
That’s why most of us are skint.
Shouldn’t “light amplification by stimulated emission of radiation” be capitalized?
Not that I’m suggesting things will be a doddle but once Scotland has it’s own currency and Scots have full access to the potential of their right to development , things will take off in all sorts of ways. The semiotic theory of space and place tells us this, isn’t that correct Mr. H @ the BBC.
link to ohchr.org
On the question of currency names I like the Scoti as suggested by a previous poster but with one caveat. I would have one Scoti broken up in to 100 Angles. Therefore 1 Scoti = 100 Angles
When the great post-indy divvy-up is discussed it is always based on Scotland having 8.4% of the UK population.
While that reflects the current position whereby our population is 1/12 let us not forget that when we were coerced into The Union in 1707 Scots were 1/5 of the UK Population.
Should we not be demanding 20% of the UK’s assets instead of 8.4% to compensate partly for the damage done to Scotland by our colonial masters over the last 309 years.
Regarding thatcher,
She and Reagan created one of the biggest Ponzi schemes in history.
By making people believe in the economic myth that the economy is like a household and that the government must live within its means, she turned the creation of money over to private banks kick starting the private debt bubble.
As Mariana Muazzucato (economic advisor to the Scottish government) tweeted the other day, the UK has a massive private debt problem and NOT a sovereign debt problem.
Household debt alone sits as £1.5 TR.
UK sovereign debt is around £1.6TR but is really nearer £1.2TR since the Bank of England effectively monetised part of the nation’s debt, albeit by the back door. This is why sovereign debt in a country’s own currency is never a problem. The UK can never forceably default.
A nation can’t default on debt denominated in its own currency but can however default as the user of another currency (Eurozone nations) – this is also relevant to a nation which runs a fixed exchange rate.
The problem we have just now is that most mainstream economists simply don’t understand the above. Even the likes of Paul krugman, Nobel Lauriet still doesn’t understand that banks create money for example.
The BBC, telegraph , and most other MSM will trundle out economic ‘experts’ waffling the neoliberal mantras about the markets and ratings agencies.
What we need is for YES2 to dig deep to employ a more progressive economic expert – I.e someone who understands what caused the global financial crisis and how sovereign nations with their own currency actually work.
Regarding the Right to Buy scheme, after independence can we claim all the money back from Westminster that was pilfered from Scottish Councils during this period? The Right to Buy has caused the major problems with social housing in Scotland as the money went to London instead of back to the councils to build more stock.
Something else UKOK will not be happy about.
link to scottishfinancialnews.com
All one link sorry.
OT Will the britnat media be blamimg the SNP again, this time for the internet abuse and grooming of children as detailed by police in Scotland today?
Options 3 or 4 please!
Debt free… As free as the wind blows…
I find that when using the express to wipe my backside that it leaves it dirtier than when I started. I have done a scientific approach and have found that their is more excrement included so its not an acceptable substitute as toilet paper ?
As ever, lots of post condemning the BBC’s slant on the truth
Some good news on that front, is that especially thank to
WoS supporters, the petition below, demanding a public enquiry into Blatant BBC Bias, has now crossed the 90,000
Mark!
I hope this number registers with WoS supporters, our politicians, and you never know, the BBC.
Although little more than half of Scottish License fees
are actually spent on Scottish television, we probably fall below half, if we could see the cost of producing a constant stream of condescending reply letters to our individual complaints.
But now the EBC and Westminster Forever Politicians cannot ignore the 90,052 Scots who have signed so far.
It is still a long way to 100,000, but with your help, we might just get there! Thank You one and all!
link to you.38degrees.org.uk
Scott Shaw says:
29 July, 2016 at 5:46 pm
On the question of currency names ….
———–
100 mickles = 1 Muckle
Just for my own information, can anyone tell me why it is necessary to have a foreign reserve at all. The article assumes this is essential, but it isn’t. It is perfectly possible to have free floating exchange rate and no foreign reserve fund. Is this option considered in the analysis of options open to an independent Scotland?
It is probably essential if the option to peg to another currency is adopted, I grant. But why should this be preferred to a freely floating currency. This post does not lay out why, though I accept the longer piece may do that.
To me, the launch of a new currency may well be better served by free float, since it is not clear to me how one can decide the rate at which to peg, and we have all seen the consequence of getting that wrong (remember crashing out of the ERM for that very reason?). It opens the danger of a speculative attack far more than free float does, as I see it. I do not think a government can EVER have enough of a reserve to counter such an attack, and notions such as 5% ratios assume there will not be such an attack. In this it is lie the banks, with their fractional capital reserves: it is never enough when the crisis comes. Governments don’t seem to be any different.
I would welcome a discussion on this aspect, because a great many assumptions are not explored when we are thinking about this, and they are not all valid.
Any thoughts?
Forget complicated economics.
There needs to be a simple setting out of what is going to happen before Indyref2 if doubters are to be won over.
Scotland will have the pound
It will be on a par with the English pound to begin with.
That is it.
And that message has to be out there before any indyref2 campaign starts.
When the together side want to argue economics, tell them its irrelevant.
Its what Slovakia did in 1993 with the koruna.
link to en.wikipedia.org
What happens in the future is for an independent Scotland to decide.
Slovakia eventually joined the euro.
The Czech Republic did not.
@Dr Craig Dalzell
“What do folk think of the Sterling peg as even a short term measure?”
Personally as far as an Independent Scottish currency goes, I see no need to peg it to anything even in the short term.
Scotland has the resources and infrastructure in place that will enable her to stand on her own two feet.
A peg with the pound sterling at the outset seems the most sensible approach for Independence in the first place even if only not to scare those terrified of change.
Many of our older voters blame decimalisation for the inflation that followed, the fowk that are older now will fear the “loss” of the pound. Tell them we’re keeping the Scottish Pound and that every Scottish Pound ever printed is already paid for and held in an account in the Bank of England. Voters can be fickle.
Most of all, they just want to know that “their” Pounds are safe.
So here’s what I’m thinking. There are genuinely people in Scotland (as well as rUK) who STILL think we don’t have money of our own, that somehow all the tax we pay flutters away like fairy dust and everything is paid for by Westminster. They believe the “subsidy junkie” myth because they have no idea how it all works and how rich we are as a nation (nor how we get ripped off)
There is a belief in some quarters that we would start on Day One of Independence with a zero bank account and would start going into debt rapidly from that point. These people will have voted No in 2014. This time we have to get a meaningful message out to people about the wealth we have, and how much we would have if we had indy and Westminster didn’t syphon it off. And if anyone is shouting at me “We’ve done that”, well we need to do it again, simpler, bigger, different font, brighter colours..
The issue of WM not issuing another National Asset Register is just yet another tantrum aimed at giving us absolutely nothing even though it belongs to us as much as them. However I would have thought if it came to something as important as dividing up the assets in a divorce this huge and complex, and obviously where the process is anything but amicable, you wouldn’t let one partner decide what the joint assets were ? There must be scope for a third party to audit the assets, a “broker” if you will, who would provide an inventory rather than let WM shove an Excel spreadsheet on the table saying, “Err, you can have the Bay City Roller albums and the shortbread tin. Honestly that’s all there is left”. Either that or Scot Gov does the audit, that would put a rocket under them.
Finally I think we have to be careful with the message about Trident and renting Faslane to rUK. While I am not naïve enough to think we could declare independence on Day One and ask rUK to pick up the subs on Day Two, a big part of the argument for indy is we can get rid of Trident from Scotland. Getting some cash out of WM while they find somewhere else for it would also be a nice little earner.
However, if we start talking about this in the context of anything which looks like long term, we start to look hypocritical – we abhor Trident, we want rid of WMD, but hey, if rUK want to keep paying us rent to have them at Faslane oh well, all the more dosh for us.
Trident at Faslane has to be as short a notice period as possible once we have independence. If they can’t find a wee spot for it down south, it gets disarmed. I’m CND – I want rid of Trident, period – but if I have to make a choice, I’ll get rid of it from Scotland first. It doesn’t suddenly become less abhorrant, or any safer, because we are coining it in – does it ?
Laser physicists for independence?
Currency:
It should be our own. I personally like the names Ryal and Bawbee with 100 Bawbees to the Ryal
Initially the Ryal would be valued at 1rUk Pound but floated from Independence Day 2. Let rUK sink or swim without us.
But what do I know, I’m only the gardener!
@ Louis B Argyll 7.37
Don’t forget gardeners for Independence!
Assets? Just part of our unlocked wealth, post independence.
What about the efficiency savings from using our own natural resources to improve our own infrastructure.
Sure it’s tricky to unprivatise big energy & engineering companies but for future tendering, with coal in the ground, granite everywhere, offshore tech excellence, academic brilliance and need for steel boats and bridges…our needs can be met within our means.
Making Scotland SUPER-RESILIENT, economically.
@SNPsoosie, well said, Spain I believe got rid of US missiles within 2years, that should be the target deadline, overruns on the timescale should be charged at penal rates,with Westminster signed up and no ambiguity or argument. Delays will cost Scotland in delayed development of our own SDF HQ and Naval base, and of course the Clyde basin.
Assets with the exception of an appropriate share of military hardware should be compensated through a cash value transfer at an 8.4% population share, Crown assets are a different problem, it can be argued that an 8.4% transfer is unacceptable, Scotland as per the Treaty is an equal Kingdom and is entitled to half, particularly regarding overseas territories. Do we want them, Doubtful, but makes Scotland very strong at the negotiating table.
I love reading comments from folk who quite clearly know their groats from their florins and could probably even understand pre-decimal coinage etc. Makes me feel warm and secure.
🙂
From a layperson’s pov, I would guess that Scotland’s greatest asset is our water. Without that, the whisky, soil, fish, crops just wouldn’t be the same quality. Pure, inexhaustible and free.
Be in no doubt – if WM could tap our water directly that would be a major reason for them to get off our backs once and for all. As things stand, the idea that we may go our own way and actually have control of something so precious must give a lot of them the screaming abdabs (whatever they are).
Folks I think we have to get people to have a basic understanding of our fiat money system in the first place to be able to give weight to our argument.
We don’t even need to be taking in the context of an independent scotland. It can just be a general conversation.
So here’s a start. Straight from the bank of england…
link to bankofengland.co.uk
@scot shaw
sorry mate count me out of any currency that has the name “angles ” in it.
just thought i would mention that , now off back to work( workin late the night) to pay my taxes.
Theres thousands of people south of the border depending on them!
It strikes me that a good name for a Scottish currency would be the Gaelic word for shilling which is ‘Tasdan’.
(emphasis is on the first syllable: the d is like a t, and the second a is like the e in finger.)
If we have to pay more for ‘connecting’ into the grid, despite consumers UK wide paying the same unit rates per k/hour..
How come..water..business rates.. the south East..
Och, I give up..
I’d peg a Scottish £ to Sterling via a currency board, at least to start with. It would reassure the people that are going to (have to) lend the Scottish Government money that Holyrood isn’t going to go on a hyperinflation causing money printing splurge. It would also mean, as others have suggested above, that anyone too scared of change doesn’t have to worry about the prices of everything changing overnight (and the balance of their bank accounts, how much they get paid etc).
Since rUK would likely be a big trading partner for iScotland (not necessarily bigger than all the others combined like the unionist myth goes, but certainly still a big one) this would also keep things simple for businesses trading across the border. (Of course if WM has a massive hissy fit and throws all it’s toys out of the pram then this may be less of a factor!)
The other thing I like about this approach is that the current reserves required to maintain a currency board can (partially) be invested in things like HM Treasury Notes. They’re short dated so can easily be redeemed to maintain convertibility if required, but in the meanwhile the rUK government would be paying the Scottish Government interest! 😀
Of course, ultimately the expectation would be that the Scottish and rUK economies would diverge and then maintaining the peg would become unnecessary at this point, at which point a free floating currency would be the way to go IMHO.
On the defence matters … Well the points about iScotland wanting to use Faslane & Coulport for it’s own defence forces are well made but an interim agreement for renting the base out for a few years doesn’t bother me. And it’s a bargaining chip for the Scottish negotiating team, so I would be very much against removing it from play before negotiations have even been scheduled.
Oh, and will people stop referring to “aircraft carriers without aircraft”! There are pictures of F-35s flying over HMS Queen Elizabeth from earlier this year, clearly we do have planes to put on them!
This is borderline O/T, but if we’re talking about predictions, and people who make them…
(You can see where this is going, right?)
A lot of people here enjoy collecting footage of John ‘There Are No More Fires’ McTernan, and in this clip (which I don’t think we’ve had before) from exactly one year ago, he does his ‘predicting’ thing on CH4, with Will Self interjecting occasionally to kick his arse:
link to youtube.com
I wish folk would stop talking about silly names for a Scottish currency. Before union, we used the pound, after union we will still use the pound.
Do you really think that the small c conservative folk we want to come from No to Yes will be reassured that their pension would be paid in dead hedgehogs?
Names for Scottish currency. We don’t want to have to go out and buy knew keyboards 😉
For maximum international conformity, I’d go for Scottish Dollar $ .
Be like Canada, Australia, New Zealand, and what’s their name ….
Laser physicist shines coherent light on currency.
@notconvinced
Here you go ‘re aircraft carriers 😉
link to archive.is
Won’t we save that much by not paying HofL expenses to the likes of Darling, Mone and Bottle or not chipping in the next time one of the queen’s ever-growing swarm of hangers-on wants another holiday?
Just as bretex is a break from the European UNION to get back controle. What we are wanting is a break from the 1707 UNION. To controle everything North of the Border. If they want to make the border Hadrians Wall. As posted by the DM readers. Then I won’t complain.
@ Dr Craig Dalzell
I’m interested in sounding option though. What do folk think of the Sterling peg as even a short term measure? How many think we should bite the bullet and start independence with a basket peg or a floated currency?
Great work, sir, both above and on Common Space. I am currently reading your full document
But, to respond to your questions, two points:
1 – Currency carries risk, and risk requires managing – so a basket BUT with more than one (p)egg, for me a currency board in charge of pegs to sterling, the euro (both trade related) and the dollar (oil traded currency) would be the starting point.
2 – How do you react to the suggestion of an internal only “medium of exchange”?
This will sound hopelessly naive, I know, but has anyone ever tried tying a currency to something as basic as water?
All the more reason to keep it pure – nae nuclear, fracking or any other jiggery-pokery.
Don’t the Scottish banks have funds held by Bank of England to cover currency in circulation.? I seem too recall a figure of £3bn ……. ?
R.E. Renting Faselane.
While it is true that getting rid of Trident is one of the biggest reasons for some to vote yes (and I’m one of them),
I think it’s also worth noting that Westminster may try to keep the base as part of the UK while Trident is there and I for one am not convinced that if they get permission to do that they will be easily removed.
@ Ian Brotherhood
Hey why penalise those of us up north when our money will be frozen in winter.
Scottiedog 5.53
Stick yir moose on this mibbees aye mibbees naw.
link to bilbo.economicoutlook.net
O/T Re. Cherry’s post, 28 July, 2016 at 4:53 pm
The Christian Institute are one of the organisations opposing the SG Named Person legislation. This is the kind of thing they’re into:
link to christian.org.uk
‘The Bible teaches that governments are ordained by God’, ‘The Bible plainly teaches that it is the duty of every Christian to submit to authority.’
So……..these Christians have just taken the Scot Gov to court and disputed their authority………which was granted by God………..which means they are disputing bible teachings……..so………HERESY!!!
I’m off to the stoning! Two sharps, two flats and a packet of gravel please (and don’t say ‘Jehovah’).
The piece goes on to say ‘This includes the payment of taxes: “Everyone must submit himself to the governing authorities, for there is no authority except that which God has established… This is also why you pay taxes, for the authorities are God’s servants’
Their ‘who-we-are/what-we-believe’ jive can be summed up easily: ‘get back to your job, shut your mouth and pay your taxes’.
Twats.
Liz g @9.43
That´s a very good point.
You think the Uk might try to keep Faselane as a sort of Scottish Guantanamo Bay?
Thatcher’s right to buy scheme was a success because folk were being charged a so-called, “economic rent” for houses which they could now buy for less than the rent. Many who never took advantage of this were probably not paying much in the way of rent anyhow. If Thatcher thought the scheme would make her popular in Scotland she was disappointed.
Not sure if this is still the case.
There used to be murmurs about seagulls staying clear of the subs in Rosyth.
There is NO WAY England will take back the subs from Scotland.
If we play it right we have Westminster over a barrel.
Spoke to more naysayers today who are now voting Indy at the next referendum.
Tick Tock.
Westminster yer tea is oot.
O/T – English academics discover BBC bias. Shock.
“three quarters of newspaper reporting on Corbyn in his first months as leader either ignored or “distorted his views.”
So says the Media Reform Coalition, backing up research done earlier by the London School of Economics. Or a ‘vested interest group’ as the BBC call it.
“Allowing an important and legitimate political actor, i.e. the leader of the main opposition party, to develop their own narrative and have a voice in the public space is paramount in a democracy,” LSE’s Dr. Bart Cammaerts said.”
You could say that about the party of government in Scotland too.
link to on.rt.com
@Rev –
Please institute a ‘Best Winger’s Handle Award’, and give it to Nuggets O’Pish, right now.
Cheers.
Thank goodness, in an independent Scotland, we will be able to name our ships, hospitals and parks after our own queens.
The Mary Stuart
The Queen Madeleine
The Lady Macbeth
Re nuclear weapons. When the USSR broke up, Russia became the successor state, but Soviet nuclear weapons were also stored on Ukrainian territory. Now, if my memory serves me right, these weapons became Ukrainian, because basically everything which was on Ukrainian territory became Ukrainian (there was a bit of a free-for-all over airplanes, etc.).
Ukraine was a nuclear power, but later gave up those weapons in an agreement with Russia (and received some compensation, either in kind or in money).
But the precedent is there. Unless these Trident submarines want to stay forever at sea, the fact is that they are on Scottish territory. While we do not want them, this will be an enormous bargaining chip.
So WM’s decision to host nuclear weapons so close to our largest city may be another case of a move that comes back to bite them on the backside — just like the “ruling out” of a currency union during indyref1 (“it’s our pound”?!?).
My opinion on right to buy for what it’s worth is that Thatcher wanted to break to unions and once people had something to lose they could not strike. Job done.
Liz g @9.43
We let them keep it for a monthly rent that is equivalent to any debt owed by Scotland + all the costs contributed by Scotland since they started using the place for a maximum of 10 years.
We also cut off all access to the place by road just to keep it interesting.
Seems fair to me!
Seriously though the little Englanders won’t like having “their” nukes on foreign soil and will want them in the land of warm beer so they know they are protected.
Protected that is by rented American weapons of mass destruction in their homes where the mortgage has been provided by foreign banks that receive electricity from a chinese power station built by the French while watching their German Queen.
Envy of the world don’t you know!
@Connor McEwan
I would be all for overt money funding by central banks, in fact it’s been done all over the place throughout history.
The only thing is that it’s pretty much verboten under Maastricht treaty so not sure it would be a good start to relations with the EU!
That said the way things are going we might actually see it done by the ECB. Mario Draghi certainly didn’t rule it out!
There should also be a single clear and defined route for the Trident submarines into Faslane on the surface within our territorial waters.
This will ensure they cannot interfere with our new shipbuilding, shipping, fishing and any future oil exploration on the west coast.
If they don’t like take them away ASAP.
Re USSR. Yes, now I come to think of it, everything was decided not on a population basis (8.4% with Scotland), but on a geographical (territorial) basis.
So Kazakhstan got the space launching pad, which it rents out to Russia for a hefty sum.
Ukraine had the Black Sea port of Sevastopol, which it also rented out for a large sum to the Russian Black Sea Fleet (there was constant arguing over the fees and this was one advantage to Russia of seizing the Crimea).
So, taking this precedent, everything which is in Scotland becomes “independent Scottish”. Whether this is good or bad remains to be seen (for example, our gold will be in the Bank of England). I am sure we can negotiate like adults or get a neutral body to act as arbitrary power (the French? hehe!).
But 8.4% is the VERY minimum Scotland deserves when it was an equal union of two independent countries. I would say that 20% is a fairer sum, based on our relative population size in 1707… because you have to take into account three centuries of asset (and cultural) stripping.
Bottom line there are feasible options for Scotland.
BUT
Some, London elites and their colonial place men would have us believe we are too wee, poor and stupid.
Strange however those same London based elites made a complete pig’s ear about procuring a power station, says a lot for their economic capabilitiy and prowess.
It’s not only trident we subsidise, but high speed rail 1 & 2, cross rail 1, 2 & 3, garden bridge over Thames, London wages, London house prices and yes, Hinckley point and Iraq too.
I suspect it won’t take long for gloss to come of Mrs May, if it wasn’t for the labour shambles she’d be a laughing stock already.
I can’t think of a bigger con man than the uk establishment, would the average Scot give money to a con man knowingly?
Last-minute appeal to lurkers/switherers –
No matter what your politics, we’re living in the Mother Of All Democratic Deficits right now.
Please make it to the Glasgow march tomorrow.
If you can’t make it to the Botanic Gardens for the start of the march (10.30) please try to get to ‘George’ Square for mid-day-ish. It’s not a ‘demo’. It’s a peaceful gathering.
If you can’t make either, please inform family/friends/neighbours who may be in town, shopping or whatever. Ask them to represent you, no matter how briefly. It’ll be a good atmosphere, music, speakers, the usual busy-ness we’ve come to expect at these events.
The message has to be received loud and clear, in London, the EU and by a’body else with a vested interest in what’s happening in Scotland – the people of this nation are sick and tired of being drained, misrepresented and traduced.
One_Scot @10.26
Bought people live in bought houses?
@ Dr Craig Dalzell
Finally. Are many folk discussing this kind of thing with undecided or No voters? What are the thoughts outside of our sphere?
Truthfully – after having read a lot about titans / money creation (seemingly banks create money out of thin air) / bradbury pound
I am so utterly confused I wouldn’t dare discuss this with anyone
The sites I read keep making statements like
A country which print’s it’s own currency cannot go bust
But they never tell the other side – I assume printing money eventually devalues a currency?
What is liquidity – why do banks need it? I assumed it was when they need to cover withdrawals but can’t because they have loaned out our money to others – but then I don’t understand why they need it when other site says banks create money from nothing
Still seeing people posting including journalist saying USA gave banker trillions after crash – I believe that most of that was liquidity loans which differ from bailouts
and if I see another person saying yeah scotland feck off and take your RBS with you cause we bailed them out for you – from my reading I do believe that bailouts occur where the debt was incurred – ie if it had been allowed to go bust – 90% of the fallout would have been for those in England
is that correct?
What are bail in clauses – do they affect us – I believe these are the ability for a bank to refuse you your monies for a length of time (or just take it forever – really not sure) in order to keep them from going bust
Bradbury/ greenback – I read about it – came away from the site thinking debt free money – wonderful idea – buy everything with that money and you never need to pay a penny back……..all because the site doesn’t make clear that debt free money only means there is no interest on it. you still need to repay the original money back (I assume)
@ Dr Craig Dalzell until someone decides to do a really simple explanation of currency/money/banking then we will ALWAYS lose on this front, if we can’t understand it then we can’t articulate it to others
that’s why it was so effective as a weapon last time round – none of us had any answer to the fear of losing the pound
Just thinking about the make up of the proposed basket of currencies against which the £Scot would be pegged. Wouldn’t it make sense if proposal was that the £UK was EXcluded from this in order to mininise £Ssot volatility and possible maximise £RUK volatility – ie fall in value. The onus would then be on the RUK to persuade Scotland to include the £RUK in the basket and we could extract value from agreeing to concede that point ?
@kestrel
Good post. I believe this is the very thing holding folk back
O/T
Totally off topic, in a way, but anyone who ditched tv, here is a film worth a watch.
About the extractive industries in different parts of the globe.
I am Reading about deep sea mining, being the next big destructive industry, right now. Scary.
Friday night eh, whatever happened! Though had text from someone earlier who has not spoken to me for months since an argument, about all things re Scottish indy.
They just told me that ‘there is so much more’, than politics. I have to disagree, politics, whether control over people, land and the environment, economics, food stability, housing, care for our vulnerable, it’s all political. Art is political, but not if you paint flowers, for flowers’ sake.
Oops, sorry maybe that link should be in a different format, not sure.
Kestrel
You make a good point. Getting the majority of folk to understand concepts of money that do not relate to household budgets is difficult. The attachment to the pound as it is is fiercely strong maybe even impossible to break.
Quantitative easing is a good example- if it is sensible why not do it when the local area needs flood defences or we need to upgrade a road. Or fund welfare etc. It screws with the whole concept Osborne and Co have branded into the national psyche.
I think the only answer may be termed dumbing down- essentially stressing the strengths of our economy and potential, our resources and why Westminster decisions are holding us back/disastrous for our economy.
I am never going to persuade my parents that running a deficit is normal, or how preposterous the whole austerity ‘plan’ is, or how any of the sensible suggestions by Dr Dalzell are feasible. They have been avoiding a deficit and living within their means their whole lives.
The one angle that has leverage is the EU. They voted to stay in the EU and for many years France has been where they go on holiday. My bro lives tthere. Nothing else mentioned above would ever work and I couldn’t use these arguments. The EU- that i can use.
That is not to say they are bad arguments but when you have a howitzer in your back pocket it probably is not the time to challenge your opponent to a game of cribbage.
@ Ian Brotherhood,
My daughter and granddaughter will be there Ian, I have told them to go the wings stall and declare themselves to someone from wings with greetings from myself.Have a great day and keep safe all of you.Peace,Love and a lot of envy 🙂
I’ll post an essay dedicated to Ian Brotherhood and the Saturday march in a few minutes…..
I will qualify the last part
none of us had any answer to the fear of losing the pound
maybe some people do understand it – but I am hopefully not the only one who feels confused by money/currency/banking
Away to read some more of AAV
1. What is … Public Sector Net Investment?
2. What is … Capital Flight?
3. What is … a Credit Default Swap?
4. What is … Quanititative Easing?
5. What is … Confirmation Bias?
6. What is … Neoliberalism?
7. What is …a Justification Narrative?
8. What is … Fiscal Multiplication?
9. What is … Information Asymmetry?
PS Thanks to someone who mentioned AAV on a post here I got to find this website – I really like it because he can explain things in a simple easy to understand manner
credit default swap was quite an eye opener…..
Ian Brotherhood
Sadly I am having to work the morn and cannot attend but I wish you all have a soo-perb day and represent our cause with dignity, humour and determination. I would also urge everyone able to attend.
The power of political marches: link to wp.me
@Ian brotherhood, 9:34pm
Have you never bought a bottle of highland spring from a newsagent in London? 🙂
@Albert Herring says: 29 July, 2016 at 11:57 am:
“These Sterling notes will become foreign reserve currency on the creation of the separate Pound Scots.
Am I missing something?”
Yes you are missing something, Albert.
Those deposits in the Bank of England vaults are promissory notes, just like the pound in your pocket, but The Kingdom of Scotland”, as an equally sovereign partner in the only two member Kingdoms in a United Kingdom that is not now, and never has been, a legally unified country.
Thus, in 1946, when that United Kingdom Nationalised the Bank of England that formerly private company became partly an asset of the Kingdom of Scotland.
There is actually nothing whatsoever legally laid down that Scotland’s share of the assets of that bank should be tied to anything and in particular certainly not in particular to the current population ratios of the only two kingdoms in the bi-partite United Kingdom.
After all those current population ratios are a direct result of the Westminster parliament’s management of the union that is the United Kingdom.
So, considering the truth that Westminster has been robbing Scotland blind since 1 May 1707, we should be due quite a sum as The Kingdom of Scotland’s share of the Bank of England’s assets plus the sums robbed through the years by first the Bank of England as a private company and then as a wholly owned, but independent, asset of the Government of the United Kingdom.
And there are other similar assets that have been set-up to rob Scotland. For example the Westminster grab of the Scottish Crown Estate Assets and subsequent profits. The Scottish Crown estates were taken from Scottish control in the 1800s and included with the Kingdom of England crown estates, (Three countries).
There are many other such assets stripped by Westminster who have plainly shown their illegal views of what the bi-partite Treaty of Union is. This was most starkly expressed by David Mundell when he was Scottish Secretary when he quoted the Government’s view of The Kingdom of Scotland’s relationship to The Kingdom of England when he quoted the government commissioned paper published during the Scottish independence campaign :-
@galamcennalath,
The name has to be the Pund.
Wan pund, twa pund, three pund, fower pund.
Enjoy the March tomorrow folks, weather looks braw, let hope for a good turnout, unfortunately won’t make it, hopefully will make the St Andrews day one. A lot of water will have passed under the bridge by then , we live in interesting times 🙂
P.s. RT reporting the Yanks have lost a heap of weapons in Germany, break in at Military base.
@galamcennalath says: 29 July, 2016 at 12:25 pm :
“Ian Brotherhood says:
“I had an Irish granny”
“galamcennalath says:” -… lucky you! You can apply for an Irish passport if things don’t work out.”
Not a bad idea, galamcennalath. I had two Irish Granny’s – can I have two Irish Passports? Oh! Wait though, One of them was from Northern Ireland – Oh! But Wait up some more – were not Northern Irish folks born before 1800/1 entitled to a Republic passport?
The name has to be the Pund.
We must learn to thank those who serve the cause:
The Eck.
I look forward to my 5, 10, and 20 note Ecky.
To be a bit picky, splitting assets in the event of states splitting works on the basis of movable assets. Fixed assets are not split, so buildings stay where they are. So the London Underground is mostly a fixed asset, along with its track and tunnels, as is the Clockwork Orange.
Yeah.
@Tam Jardine
They have been avoiding a deficit and living within their means their whole lives.
then you have other leverage – why is it that some get to play the system – to avoid tax (I believe it is equal to our national deficit)
why is it that the poor are the ones paying while the rich have doubled their wealth – saw a really amazing gif on wings tweet that showed distribution of wealth over 30 years and top bar just kept doubling every few years as we – all of us lost money
they have turned the
semi poor against the poor
the desperate against the despairing
the indigenous against the newcomers
a little saying that speaks volumes…….
First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me.
they are prudent…..a value I totally understand and believe in
so ask them……why when they the older folk have been so prudent are they now being asked to sell of their house to pay for their elder care..when they saved (god my gran kept every button off of all cloths and never threw away brown paper wrapping and made new soap out of the slivers of the old ones)
watch the utter pain in parents face as they wish they could die quicker to save their estate……. as every minute they live costs something they dearly want to pass on to their child
yet all their life they pay into a system that was meant to protect them – it was an insurance policy – called national insurance – how much do you pay over your lifetime to how much you get back
we are bankrupt – and you know your parents didn’t do it to us – like most folks they live within their means
maybe they should ask who bankrupt them ( ie who got rich out of this mess) and maybe they might get angry enough then to change
thing is – big question – could our country do different?
Yes, the nukes. When the USSR split up, Ukraine became a nuclear state, it had possession of the ground-based silos and nuclear stockpiles. This was a cause of concern for Russia, so when Ukraine had problems with its debt to Russia, Russia wrote off the debt in exchange for the nukes (long story cut short).
In theory at least, if at midnight of the day of Independence a Vanguard loaded with nukes was in Scottish waters, perhaps at Faslane, it becomes Scottish property. That’s if there’s no agreement to the contrary. Same goes of course particularly for Faslane and Coulport – and the floating dock used to marry warhead to 55 ton missile. I guess if one of the carriers wasn’t launched, it too becomes Scottish property.
That’s kind of International Law, but as most people know, there really is no such thing as International Law, just a whole load of treaties and conventions that not everybody has signed and ratified, and a court which not everybody accepts. So it really is as clear as muddied waters seen through a glass darkly.
@Grouse Beater,
Oh, he will be honoured. His smiling visage will adorn the new ten pund note. Which will be yon fangled plastic wans obviously so they last longer.
Now imagine K**** H**** going to a cash machine…
Just a last comment as I’m on a roll here. For Independence, negotiations take place between the rUK and Scotland, and those negotiations can end with full agreement – or in disharmony. Then it’s up to Scotland to state its case – e.g. no assets, no debts, and it’s up to the International community whether it likes that or not, and recognises Scotland’s Independence on those terms, or not. along with the usual suspects, WTO, IMF, etc.
Well blow me down with a feather, the UK is doing a Brexit so has mightily hacked off the EU. It’s hacked off the US, and any country that wants to do business with the EU will probably not want to upset the rEU (see what I did there). Even the IMF is not too happy as economies are emitting exclamation marks in terms of stability.
Which means the international community is, I think, far more likely to accept Scotland’s version of the fairness or otherwise of the end state of play of negotiations.
To put it another way, Scotland has even more of an upper hand than we would have after Indy Ref 1.
Artyhetty
You apear to be a “big picture” thinker, which isn’t necessarily a bad thing. 🙂
link to intropsych.com
A great piece, many thanks.
I think the way the Express has twisted it, is exactly why the issue has to be stripped down, so that currency issues communicate at varying levels.
I agree with the General view that a great many out there don’t know and don’t care to know a lot of detail. They want to know they can go to Tesco on Day 1, with no hassle, same for pay and pensions. Others, as on here want the fine detail.
Younger people -30ish – the kind who take it for granted we should be independent, can more easily see their £ is buying less dollars, and I think this demographic are more relaxed.
It does need to boil down to ease of use, back up is there etc. It is the small c, no change types that are irritated easily.
My No voting friend said she voted No based on the dodgy currency issue.
On Trident, I think and hope SNP will take a very hard line. It’s important we send a loud message to the world, as a new state. Also, they have recently extended MOD exclusion area, annoying local fishermen again.
I would like to see Trident out within two years, or disarmed. They can berth at Georgia, but that’s WM problem.
I’m not really up on currency, but we have not seen the £ hit bottom yet, it’s going to be a slow painful death. If we pegged to sterling in the early days, it should be with a view to quickly unplugging, and the basket suggestion, to a layperson, seems to me to offer flexibility to a small state, that wants to assess and react to changes in global financial environment.
Robert Peffers says:
30 July, 2016 at 12:12 am
@Albert Herring says: 29 July, 2016 at 11:57 am:
“These Sterling notes will become foreign reserve currency on the creation of the separate Pound Scots.
Am I missing something?”
Yes you are missing something, Albert.
Those deposits in the Bank of England vaults are promissory notes, just like the pound in your pocket, but The Kingdom of Scotland”, as an equally sovereign partner in the only two member Kingdoms in a United Kingdom that is not now, and never has been, a legally unified country.
See what I mean… omg at would you people in the know who are superior to me (only in your field of course) please sort yourself out
I kinda need some clarity to be able to make a case for those that will have questions about our independance
kestral
Can Scotland do better? If we govern ourselves in accordance to the rule of law, I don’t see why not. No cronyism and corruption a la Wastemonter, enabling government to govern for the people as a whole and not just for those with the biggest lobby fund.
A written constitution would also make it harder for vested interests to exert undue influence.
I see the Sunday Herald has dropped even the slightest remaining pretence of supporting Independendence now.
@kestral
Countries that have their own currency usually back that currency to a limited degree by having reserves of foreign currencies, baskets of different ones, which can be any currency, often the dollar, but also the euro and even the pound sterling. That gives a currency some stability, and stops it wildly fluctuating. It used to be gold, currencies were backed by supplies of gold.
But ultimately a currency is backed by the People – us – our productivity, our stable efficient governments. All the rest is just technical stuff, and in theory at least no central bank is needed, no reserves of foreign currency at all.
So what it comes down to is this: is Scotland a strong and capable enough country to make our way in the world, to give confidence to other countries who want to do business with us?
@kestral
An example of why I kind of dismiss the technical stuff is what happened to the Pound Sterling in the wake of the Brexit vote. Carney is competent, the Bank of England has built up its reserves since the 2008 bank crisis, it stood ready to make £250 billion available, the actual Brexit isn’t even happening for 2 years or more, and yet the Pound dropped over 10%.
Why? Because the world lost confidence in the UK and its people to make sensible decisions, to pursue a course of action best for its economy, and a certainty that there would be a lot of change with a lot of unknowns. And the Government of the UK was a shambles without a plan.
So as I say, never mind the technicalities, it’s confidence is the prime value of a currency. The world lost confidence in the UK.
link to stv.tv
“The YouGov poll, commissioned by the SNP, found that 47% of those polled would be in favour of independence following the UK’s decision to leave Europe on June 23.”
“The number of respondents who said they would not vote or did not know also increased from 12% to 14% in the wake of the Brexit vote”
So…. Yes – 47 No – 39 DK – 14
DKs removed Yes – 54.7 No – 45.3
I think
“I look forward to my 5, 10, and 20 note Ecky.”
Take it easy Grouse, 5 eckys will have ye oot yer nut.
Dance all night though. 😉
A basket of different doshes to pick and choose from when expedient looks to me to be the wisest choice and as to assets, let the rUK keep them.
Why wrangle for months or possibly years with a known cheat over a pile of second hand goods in which the process would likely cost a fortune when zero debt would be possible?
Think about it; zero debt. That would be bloody amazing.
@ Gerry, the YouGov poll reported in STV and Herald seems a bit disappointing even though it shows a 1% rise in Indy support.
After the Brexit vote and the WM fiasco that followed, I would have thought that Indy support would be well above 50%. Well, it means that we still have a lot of talking, persuading, leafleting, etc to do.
The poll result was 47% Yes, 53% No, AFTER excluding Don’t Knows & Wouldn’t Votes.
Including them, the result was:
40% Yes, 45% No, 10% Don’t Know, 4% Won’t Vote.
I don’t think YouGov are a Yes-friendly pollster, but it’d be good to see a poll from another company.
Results here:
link to d25d2506sfb94s.cloudfront.net
Thanks David. Wishful thinking on my part I guess.
I can’t believe that brexit would only create a 1% increase though.
Direction of travel is good, but the 1% increase surely cannot represent the true amount of previously no voting remainers, who would switch.
@yesindyref2
Have to disagree.
Carney is not competent or alternatively I would say certainly not independent of the tory govt
If he were competent he would have never reduced the capital requirements of banks – in other words making it easier to plunge people into even more debt at at time ehen private debt is almost back to danger levels whilst govt continues austerity.
He’s a private banker just like the rest.
Re poll. It’s as I feared. The Tories quickly regroup, form a new government under a strong figure, the markets stabilse, the nawbags settle back down into their armchairs. Brexit fades from memory. Better the devil you know…
They are blind to the storm that lies ahead. Ostriches. Sand. Head. This isn’t a devil you know.
RE: STV poll
Iv’e said it before and I’ll say it again:
Support for indy will dip after the knee-jerk subsides, and then it will resume its painfully slow upward trajectory. Sorry, folks, indy is coming, but it ain’t in a hurry, even with BREXIT. Most of the older NO voters would rather go down with the union than contemplate a different, brighter future. Forget the economic guff. This is about peoples’ belief systems (formed over a lifetime of experience and brainwashing) and these things change very, very slowly.
If I was to take every Yoon poll as gospel and in no way manipulated for their own agenda, I would be F’cking insane.
Artyhety 11:28 pm
I must admit since Indyref 1 I am also a politics bore. Politics has become the thing I think about most. Reading blogs has kidnapped most of my free time. I can turn any conversation to politics and usually turn people off. I can’t help it. My wife just laughs at me.
I tell myself most of the problems will be fixed with Independence but I know deep down that this is just the first step. There are many more steps to follow.
@kestrel
Just start with some basics and misunderstandings about money.
Up until 1971 all money was based on a finite amount of precious metal (mostly gold.). In other words there was a FIXED EXCHANGE RATE where a unit of nation’s currency could exchanged for fraction of an ounce of gold.
Between 1945 and 1971, global currencies were linked to gold through the dollar. So you could swap X pounds for X dollars and then exchange the dollars for gold. This agreement was made at Bretton woods at the end of WW2.
The Bretton woods period was when most enduring mainstream economics textbooks were written.
Having your unit of money linked to a quantity of a limited substance like gold meant that you could only produce a finite supply of the currency. In times of war however when nations needed much more money, they would abandon this standard and produce more ‘devalued’ currency. When the war was over, they would resume the standard which resulted much of the time in widespread austerity as they started taking the money out of circulation to maintain the original exchange.
This is what president Nixon did in 1971 as at the time he was in the war business. He was effectively printing dollars and by default devaluing every currency in the Bretton woods agreement.
Famously France sent a destroyer to New York to exchange their currency for gold. Fearing a run on the currency, Nixon de-pegged the dollar from gold forever. In doing so, he took every other currency off this ‘gold standard’
The important thing here is that every currency became ‘FIAT’ currency (meaning ‘belief’) not based on anything. This means now that if you take a tenner to the central Bank of England they will shred it and just give you a tenner in return. No gold, nothing of value!
There is nothing to stop the UK printing as many £ as we like now that we don’t have any fixed exchange rate to gold (or other currency for that matter).
Mr carney’s reserves of £ aren’t ‘built up’ but can just be created on the spot as required.
Just to hammer this home, here is an interesting article which includes quotes from former U.S. Federal bank chairman Ben Bernanke..
He is asked by an interviewer how the Fed bailed out commercial banks during the crisis of 2008. He is asked if Tax payers money is being used to do this bailout to which he replies…
“No it’s not tax payers money. We simply use the computer at the fed to mark up the numbers in their bank account”
link to dailyreckoning.com
@ kestral 11:03 pm
It is very complicated and few understand how things interact. It is also deliberately obfuscated when discussed by economists and bankers, so that people give up and say “too hard for me”. They then turn to the simplistic lie that it is like a household budget, which was promulgated by pols from Thatcher on. That is easy to understand, but it is also a complete lie.
“A country which print’s it’s own currency cannot go bust”
This is true. It is easy to understand, because a sovereign currency is in unlimited supply, so any debt denominated in that currency can always be paid. It is why you need your own currency because if you have a foreign currency you can’t do that: that is why Eurozone countries are in a different situation from UK.
“But they never tell the other side – I assume printing money eventually devalues a currency?”
That is not true. The question of the consequences of printing money are recognised and discussed by, eg MMT proponents like Bill Mitchell.
The core of the neoliberal economic story is that control of inflation is the most important thing of all. Central banks are charged with ensuring “price stablity” which is pretty much the same thing, and this is the fundamental change which was implemented when policy moved from a Keynesian analysis to a monetarist one in 1979. Under the post war consensus full employment was the central goal, and that makes all the difference.
The spectre of hyperinflation has been used as a bogeyman for decades. But hyperinflation does not arise in the way you are told. In every case there are special factors which produce that outcome and they are nothing to do with a simple story of government overspending. People have been told that inflation is a bad thing, and to tell that story ordinary inflation is associated with hyperinflation as if they are merely points on a spectrum. That is not true
For years we were told that all inflation is a bad thing: but note how that story has changed since 2008, and now bankers etc are concerned about deflation. There is a reason that the target is not zero, but rather around 2%
We were told that “printing money” was a disastrous policy: but as soon as the banks were in danger that is precisely what was done. It was called QE because otherwise you might have noticed that the justification for austerity etc had just been disproved: and they never believed it in the first place.
If we are using all of the productive capacity then printing money will indeed lead to inflation (which is another name for devaluing the currency). This is because we cannot produce any more when all productive resources are fully realised: so more money will be chasing the same quantity of goods.
But we are not in that situation. The simplest proof is the unemployment we have. Labour is, in economic simplespeak, a factor of production. It is not fully utilised. Nor is capital, which is not directed to productive ends at present.
In those circumstances more money can be used to increase economic activity and to produce more stuff: that is, to increase GDP. If more stuff, then the increase in money is not chasing the same amount of goods: it is chasing more goods and so inflation does not follow. That is healthy growth.
The point is that the quantity of money is an abstraction: a sort of proxy for the real world of production and trade, tied to that directly.
At the point where all resources are fully employed, you stop making more money. Thus the neoliberal story is based not on economic theory, but on a view of government which assumes they are uniquely irresponsible and must be constrained. That is a plutocratic assumption which does not bear close examination as the beh of our bankers demonstrates. They are all people, but the difference is that our elite has a strong vested interest in irresponsibility: govt less s, for their ability to benefit directly is less.
“What is liquidity – why do banks need it? I assumed it was when they need to cover withdrawals but can’t because they have loaned out our money to others – but then I don’t understand why they need it when other site says banks create money from nothing”
Banks do create money out of nothing, just like the central bank, but to a far greater extent. More than 90% of money is created by private banks out of nothing. But it is a little more complicated than that. Every day the banks must settle their accounts with each other. The notional money is netted off. So bank A lends you £100,000 for a house. You don’t get the money, though. You give it to the seller, who puts most of it in another bank. So Bank A has an asset (your debt of £100,000)and a liability (the obligation to pay £100,000 to the seller, which is really in practice bank B). You have a liablity (the debt to the bank) and an asset (the house). The seller loses the house and gains £100,000, then deposits that £100,000 in bank B (may be several steps eg through another house purchase) but that is where it ends up. When it is deposited bank B has a liability of £100,000 to the seller: and an asset, the cash. At the end of the day this is all netted off and it all balances out: it is just the nature of accountancy: it necessarily balances. It is an artificial system which ensures that is true.
But if the “asset”, ie the house, is not worth £100,000, then it does not balance. With the GFC that is what happened. The assets were overvalued and had to be written down.
Each day the accounts are settled between the banks but very little money changes hands. Thousands and thousand of such transactions are netted of. Bank A owes Bank B some sum, and Bank B owes Bank A some other sum. And they transfer the difference, only. If bank A cannot meet the sum to be transferred it has a liquidity problem, which is met by borrowing. Normally from other banks, but ultimately from the central bank if it cannot do it any other way.
As Steve Keen demonstrates, the central bank has no choice, because a failure to settle will crash the banking system. So it prints the money, if required. When all is well that is a short term action which will sort itself out tomorrow or later: but when the assets are not worth the book value it is not like that. Thus QE.
The problem is simply described in the famous quote about the 1929 crash: asked what happened the speaker replied “somebody asked for a dollar”.
Not sure if that helps at all? It is overly simplistic, necessarily and I don’t pretend it is accurate. But it is no less accurate than the household budget story, and it is important to understand that much of this is mere accountancy with no proper relationship to the real world of economic activity.
I find the STV poll for a 1% rise in Indy support alarmingly credible.
In the immediate aftermath of Brexit there was a stunned silence and power vacuum and a prime opportunity for a momentous step forward for Scottish Independence.
While the whole country struggled to come to terms with Brexit and what it meant, nobody would have registered any alarm if we had skipped across the threshold of a date being set for Indyref 2, YES2 being launched with avengence, and half of England sympathetic towards putting the BBC in the dock for destabilising the country and setting the UK on course for disaster with its populist xenophobic bullshit. We could even have had a credible discussion about a UDI; not the UDI like Rhodesia which could not secure international recognition, but a UDI which would have been recognised by the big players in the EU virtually instantaneously, with more than enough time to ratify it democratically. See it. It is there in their language – “If Scotland moves quickly…”, “If Scotland declares independence…”. If! If! If!
The mere possibility of a UDI being credible could have been our green kryptonite for their superhuman grip on the Indy narrative; leverage to call their conduct to order. It still could be, but we convince ourselves UDI is a four letter word.
The legal status of Scotland’s sovereign people has just this year been recognised through OUR Declaration of Arbroth being celebrated as a UNESCO document of far reaching importance, is yet another keg of powder we choose to keep dry. The Declaration of Arbroath; available for weddings, funerals, kids parties, and foundling Republics the world over; but regarded as mere relic of no material consequence in its own backyard.
Post Brexit, we did very little beyond some courteous discussions with European heads which made Europe at least register Scotland was an issue, but then nothing except gift wrap the initiative and leave it beside the Westminster dispatch box as a welcoming present for the new PM. We sat back chewing popcorn for weeks watching the Labour Party Monster’s Ball while the Tories got their blood letting out of the way quickly with their typical ruthless efficiency and filled the power gap to settle the nerves and regroup. Oh look! Somebody has left us a box of initiative! “Here! Away and chew the fat about border guards. That will keep you amused while we get on with business”.
Meanwhile, on a big brother telescreen near you, the BBC is back on the offence, as if it never left, it’s mithrill vest survives another drubbing, and we are yet again dithering about what needs to happen to prompt a second referendum, pilloried from every direction from every anti Scottish pebble, rock or boulder which fits the sling of the BBC trebuchet.
I do like Nicola Sturgeon, she is a strength to us. I do not like the SNP. It strikes me a significant number simply like to preen their shiny suits in the mirror rather than get their hands dirty with anything vaguely political. Pity their minds, and indeed tongues are less sharp. I need to see what the plan is for getting our country independent because in true Scottish tradition, I get this sickening feeling we could be making yet another valiant effort at clutching defeat from the jaws of victory.
You don’t have to show me all your cunning plan, just for God’s sake prove to me it exists.
We will be independent. The question is whether we step forward into our future under our own steam with calm grace and confidence, or whether we simply break the surface gasping for breath like a drowning man escaping catastrophe as the ship goes down beneath us, with Indepenence the only option we have which is consistent with survival. Oh shit… That ISN’T the plan, right? You DO have a better plan, don’t you?
We sat like rabbits in the headlights watching Brexit. Then Labour. Then the Tories. Then Article 50. Now we seem to be transfixed and entranced by the polls showing a growth in support which is alarmingly stagnant, and that magic milestone is just to fart out another referendum to face the same vitriol and propaganda which assaulted it last time. The world has turned and offered us a second chance. We won’t get a third chance in my lifetime.
Show us the plan. Make it known to us. For the love of God do something. Are you too afraid of defeat to risk victory?
Uno mass 10.03 & Inverclyde 10.27
While I do think the UK government will try to do a deal with Faselane over Trident, claming everyone one accepts they will take time to remove.
I don’t see it as a bargaining chip,
I,and everything I care about is in the blast zone of an accident happening with those things.
I also think having waited so long to get Scotland back NO part of our land should be designated as UK territory.
Especially not when it is to be used for such a purpose.
It not in the least bit like the refugee camp in France,desinated as the UK for human concerns.
The UK has form on this Cypress and Germany comes to mind,its seem that once they get a military base they forge to leave.
I do suspect and hope this is partly what was behind Faselane being earmarked as needed for our own defence arrangements.
There is not Rent or Debit arrangements high enough to justify not getting the MOD out of our country as fast as possible.
Also getting on with decontaminating the area we can’t currently access, well in my opinion anyway.
An high tide of UK tory BBC led attack propaganda media triumphs, Brexit’s going great, Trident 2/Thatcher 2 will save us all, endless terror on the streets, isjust one day of Press and Journal UKOK stuff.
Toty propaganda writes itself.
You didn’t need European citizenship anyway, leave it to England make the big decisions for you, like Europe and Trident, they do know better you know, UK’s a world power again, rejoice, youre British, Scotland’s bankrupt without England that loves you, look, lovely photos of royal babies playing with really cute puppies, that make even more British, Ruth Davidson’s not a stuffed shirt, Sturgeon’s really bad and a horrid state snooper, snooping on Scottish families, kick her in teeth… God help poor old JC’s lot.
@yesindyref2 says: 30 July, 2016 at 1:04 am:
“Just a last comment as I’m on a roll here. For Independence, negotiations take place between the rUK and Scotland, … “
Why do you persist in propagating the Westminster Establishment’s propaganda for them, yesindyref2?
There is absolutely no doubt whatsoever that the treaty of Union that established the United Kingdom only carries the signatures of the equally sovereign Kingdoms of Scotland and England. It is thus neither a country nor is it a legal union of countries.
It is legally called, “The United Kingdom of Great Britain & Northern Ireland”, for the very simple reason that is exactly what it is – it is thus not a country, not Britain, not Great Britain and remains exactly what it was when the ink on the treaty was still wet with one tiny exception – The addition of the Province of Northern Ireland to the title due to the partition of Ireland.
This small change does not alter the fact that the United Kingdom is legally a Kingdom and not a single country. Neither does it alter the fact there are only two kingdoms in The United Kingdom of Great Britain & Northern Ireland.
There cannot thus be any form of United Kingdom when the two partner kingdom disunites – an rUK cannot exist because the Kingdom of England contained the Principality of Wales since 1284 and the Kingdom of Ireland since 1542. It thus remains as the three country Kingdom of England.
Scotland becoming independent is NOT Scotland leaving the United Kingdom – it is the two kingdoms splitting up.
Breeks, easy now…
The party you speak of (I am not member btw) is a beacon of progressive restraint within a system of jarring inadequacy.
Most of the members do not wear suits, even so, how can those parliamentarians challenge the constitution when they represent voters on both sides.
Stay grown up.
Well said Robert..
There can never be a ‘r’UK.
Unless one divorcee wants to be called ‘formerly married’ instead of ‘single’, like the other one.
@Dr Craig Dalzell says
There is merit in pegging to sterling as Scotland would be oil exporting country and also exports a lot of other goods and services.
By pegging to gpb initially, we can grow our economy without having to have a floating currency or allow the currency to appreciate too high and affect exports.
This is exacly what China did with the dollar and even with usa trying to push them into floating the Chinese yuan renmim bi, China even now only allows a 2 percent either way float against usd.
Should we need to in the future we can change to a floating currency if required.
@Fion
@yesindyref2
@ScottieDog
thank you – it is possible to make sense of it and your explanations really help
It was called QE because otherwise you might have noticed that the justification for austerity etc had just been disproved: and they never believed it in the first place.
totally agree – read a lot of AAV and he does very well at explaining the fact that Austerity is a con
Ironically people are actually voting for the tories because Austerity chimes with them – ie living within our means
Shame that doesn’t include taxing Google etc
thank you for taking the time to explain – over the last few years of indyref I keep feeling more and more strongly that our children should be taught this in School
I believe that even a basic understanding gives them half a chance of understanding the world they will inherit –
where as for me I have to fight the ingrained years of belief that something cannot be created from nothing before even beginning to get to grips with the technical details
However – as I have always done – I will not talk about a subject I do not know – I do feel it’s important to be well read and knowledgeable before opening ones mouth
In my work people now come and ask me question like
what’s this both votes thing about – why am I getting 2 votes in scottish election
How should I vote on brexit (never told her what to vote – don’t believe that you should – gave her a run down of both sides – pro’s and cons)
People trust you, and look to you to help them
I feel that’s a huge responsibility for me to ensure I know what I am talking about because it’s me they will be asking question if we have indyref2 – this time I have their respect and trust to make the case and that is what will turn no voters into yes voters
@Robert Peffers
That’s all very well and good, and I read all the history and myself, but it has nothing to do with my posting, where I said and you quoted: “Just a last comment as I’m on a roll here. For Independence, negotiations take place between the rUK and Scotland,”
That’s exactly what will happen. Whatever people want to call rUK is up to them, it’s only important if it ever hits court. Meanwhile the commonly used epithet for whatever is left without Scotland is rUK, that’s the symbol most people use, it’s the symbol most people understand, and it’s the term I use and will continue to use.
As for “country”, there are as many definitions for the word “country”, as there are countries in the world. There are many people think the UK is their country, therefore it is.
@kestral
Totally agree. It’s about trust, and if we can be as impartial as possible, giving both sides, that will win in the end.
@ME Had switched off laptop and realised it was Saturday not Sunday, so my comment about SH didn’t make a lot of sense!
Good analysis – but I fear a few practical issues are omitted.
Scotland’s large financial sector – the bank liabilities alone are more than 12 times Scottish GDP. £10bn reserves are unlikely to assure investors – so we need to bake in the cost of rbs, lbg and standard life migrating to London. Maybe not the worst thing but it will mean a chunk of higher rate taxpayers and Corp tax revenue going too.
Other thing is transition risk. We’re asking existing investors to transfer out of the known (sterling) to the Unknown (Scottish pound). Precedent suggests that there will be pressure to stay with the former – per the examples of Slovakia in 1992 and Quebec in 1995.
All of this is not – emphatically not – to say that long term economic and fiscal independence would not be viable and / or preferable. But I do think short term costs are unavoidable – and to be successful when indyref2 is called this will need to be addressed. Frankly if people aren’t prepared to make a limited economic sacrifice for independence, are they even that serious they want it to all?
“I prefer liberty with danger than peace with slavery.”
? Jean-Jacques Rousseau
Bring it on.
I do not see the benefit of pegging a Scottish currency to Sterling.You immediately lose your hard fought Monetary freedom,
An Independent Sovereign Nation can buy any resource within its borders,including the idle labourusing its own currency.
It can issue its currency debt free to stimulate its economy.
What it must not do is issue bonds in a Foreign currency.This leaves it open to the currency manipulators.
Its exports will bring in Foreign currency for Reserve use.These Foreign reserves should be converted to Gold, which then covers all Foreign currencies and trade.
Gold is then the backing of the native currency.