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Scottish referendum.

Tony Stephenson is off-line
17 February 2014 18:19
tonycsm
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Quote from click_gotcha
There is a train of thought that Scotand would be better off using the £ but outwith a currency union.   We could also leave the debt behind in such a case.  We can play hard ball to if it comes to it.




Sounds like a plan - however that was covered by Osborne a couple of weeks ago when he said rUK would cover the debts if Scotland left them behind so, that boat has been missed I'm afraid.

Also try getting any form of credit from other sources after reneging on your debts as a newly independent country - it would come at a great cost if it could be found.
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click_gotcha is off-line
17 February 2014 18:40
click_gotcha
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Quote from tonycsm
Sounds like a plan - however that was covered by Osborne a couple of weeks ago when he said rUK would cover the debts if Scotland left them behind so, that boat has been missed I'm afraid.

Also try getting any form of credit from other sources after reneging on your debts as a newly independent country - it would come at a great cost if it could be found.



I'm not sure what you mean by "that boat has been missed" but if rUK is the successor state then legally we will have no debts to renege on as the debt belongs to the UK, no -one else/  The SNP position is though that we will accept liability of a share of the debt in exchange for a ahre of the assets.



click_gotcha is off-line
17 February 2014 18:51
click_gotcha
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Quote from magpie1
This train of thought, sounds like the Flying Scotsman.



More like the Wall Street Journal

How Scotland Can Keep the Pound

  • By
  • Simon Constable
     

If UK chancellor George Osborne wants to come down hard on Scottish hopes of independence, he should at least get things right. The problem is he hasn’t.

This week Osborne, who holds a cabinet position roughly equivalent to Treasury Secretary, said “If Scotland walks away from the U.K., it walks away from the U.K. pound.”

If the Scots believe him, his pronouncement sounds like a scary proposition. Or it would be, if only he was correct.

“Osborne is just wrong,” says Steve Hanke, professor of economics at the Johns Hopkins University. “There is a viable option that is easy to implement.”

Hanke is referring to the idea of a currency board. In the simplest terms, Scotland would peg the new Scottish pound to Sterling one-for-one. It would be British pound, for all intents and purposes and there would be little that Osborne can do to stop it.

“Hong Kong is an example where they have managed fabulously well,” says Peter Rodriguez, professor of business at the Darden Graduate School of Business in Charlottesville, VA. Hong Kong started pegging its currency to the U.S. dollar in 1983 after a crisis.

The real challenge is to link the currency with one that has a closely related business cycle. That seems to have been where Argentina famously went wrong with its currency peg to the U.S. dollar. But with Scotland adopting the pound, that doesn’t seem to be a risk. Exports from Scotland to the rest of the United Kingdom represent 29% of Scottish GDP, according to a 2013 report to Britain’s parliament.

That said, there are some downsides:

First, Scotland would cede monetary policy to the Bank of England. But as Marc Chandler, a currency strategist at Brown Brothers Harriman in New York points out, that may not be that big a deal. “To what extent is the Bank of Canada able to act independently of the Fed?” he asks. Not much.

A bigger issue for some would be that there would be no lender of last resort for the commercial banks, explains Nouriel Roubini, founder of Roubini Global Economics. That’s a role typically taken by the central bank to rescue stressed out financial institutions.

But if it meant banks avoided risky bets expecting the government to save them, then that might not be such a bad thing. Of course, just because Scotland could effectively keep the pound, doesn’t mean it should. That’s a bigger question.





nigel kent is off-line
17 February 2014 19:14
sirspread
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Does it really matter because at the end of the day the scots are not going to vote for independence


 jivago Photographic is off-line
17 February 2014 19:22
jivago
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Quote from tonycsm
No, Sterling is the currency of the United Kingdom and the countries which comprise the UK or rUK as may be the case. Once Scotland has left the UK and becomes independent, Scotland will not have the Pound Sterling as it's currency or as a crutch and it doesn't matter how much Snake Oil Salmond or his chums stamp their feet like spoiled brats to the cries of 'bully'.

The clue is in the word 'independent'!

 



I will differ. Artcle 16 of The Act of Union established a common currency between the two Countries. Who owns that asset after the Union is dissolved? - Who knows? Is there a prececdent? In dispute it could  be considered by the International Court of Justice? - A surreal proposition! Common sense would have to prevail of course. Some share of the assets and the liabilities I anticipate. A Currency Union in return for a share of the liabilties. Anyone with a brain can see the 'game of poker' at large here.

As a Rump UK taxpayer, would you be happy to shoulder Scotland's share of the current national debt? - Or would you prefer a currency Union? - One that did not impose tariffs on your businesses when they trade with Scotland! (One that may well be some 'back-door' to European free markets when the Tories isolote you from Europe?).


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click_gotcha is off-line
17 February 2014 19:24
click_gotcha
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Quote from sirspread
Does it really matter because at the end of the day the scots are not going to vote for independence



I'd be a fool to predict what the outcome will be but it will be close, it could go either way.      The no campaign seems to have suddenly woken up to this idea and that's why we are seeing all this commotion.    There is a hard core of Yes voters, probably about 30%.  There is also a hardcore of no voters, but it's a lot less and  there are also a lot of people who seem to be nominally no in that they're quite happy to keep the status quo  and will pay lip service to it.  But a lot of them will simply not bother voting.  Yes voters seem to be the most vocal and passionate in their support for Yes and almost all of them will vote.    There are however a lot of undecideds and any shift seems to be in the Yes direction. 

With 7 months to go, it's all to play for.



Malc is off-lineSilver Member
17 February 2014 19:28
cziiki
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Quote from Stibnite


I don't get the point you are making, to retain use of the pound you would need to have a currency union with joint policy making on the economy yet what is proposed is independence to raise taxes and spend as Scotland please's you can't have it both ways.




No, a currency union is one mechanism for Scotland to use the pound. I believe someone else has posted excerpts from one of the recent articles about the aspects of currency sharing which, in the context of two similar economies with a very large amount of trade with each other (10 years ago Scotland exported over £35BN to England and there is a large reverse trade)

In these circumstances the economies are fairly in tune and affected by similar internal and external forces - even if not in the EU Scotland would like Norway or Switzerland be complying with most directives simply to permit exports to EU countries. And a senior judge recently raised very large doubts as to whether Scotland's 5.5M EU citizens could legally be disenfranchised by the Council of Ministers.

In other words there are things to be discussed but no huge barriers to Independence for these reasons. I am not in favour of independence myself, I've lived in London on and off for 40 years, but I'm getting more and more annoyed by these tactics of disinformation which are clearly attempting to influence rather than inform the vote.

Scotland IS a nation. The Act of Union is a treaty where separate Nations (the United Kingdoms) agreed to combine some things but not all. There is already a separate Scottish legal system (always has been), separate Established Church, separate NHS, separate education system. Independence would not be creating a nation - Scotland always has been a nation. It would be revoking the unification of Great Britain brought about under Stuart (Scottish) kings when the English invited them to take over the English crown. I disagree with it but I very much dislike the disinformation about these things mainly in the minds of English press and people.


nigel kent is off-line
17 February 2014 19:35
sirspread
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Quote from jivago
I will differ. Artcle 16 of The Act of Union established a common currency between the two Countries. Who owns that asset after the Union is dissolved? - Who knows? Is there a prececdent? In dispute it could  be considered by the International Court of Justice? - A surreal proposition! Common sense would have to prevail of course. Some share of the assets and the liabilities I anticipate. A Currency Union in return for a share of the liabilties. Anyone with a brain can see the 'game of poker' at large here.

As a Rump UK taxpayer, would you be happy to shoulder Scotland's share of the current national debt? - Or would you prefer a currency Union? - One that did not impose tariffs on your businesses when they trade with Scotland! (One that may well be some 'back-door' to European free markets when the Tories isolote you from Europe?).





bookies are not stupid and odds of 7/2 suggest that its very unlikely


click_gotcha is off-line
17 February 2014 19:40
click_gotcha
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Quote from sirspread
bookies are not stupid and odds of 7/2 suggest that its very unlikely



Bookies have been stupid before in relation to Scottish politics. 

The last holyrood election:-



As we now know, the SNP won by a ;landslide.




 jivago Photographic is off-line
17 February 2014 19:40
jivago
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Interesting conjecture - Should Scotland secede from the UK Union, but either remain within or accede to the European Union and then the Rump UK are dragged out of the European Union by the barbarians in UKIP & the Conservative Party - Would we then see a flight of business from England to Scotland, in order to enjoy European free trade (and the future EU-USA free trade zone)?

Interesting! -
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