Osbourne says no to currency union.

quietly and behind the scenes he has been planning with devastating consequences

You make him sound like a Martian in War of the Worlds 😉

I was referring to the story in the Herald that the Westminster government might not allow independence if the negotiations don’t go the way they like.

So in your mind Scotland can just demand absolutely anything in the negotiations, and if Westminster doesn’t agree to it then they are being evil bullies?

And why is it reasonable for Scotland to threaten not to take a share of the national debt?

He looks like one of Gerry andersons puppets

Well he has coordinated three warring parties, the BOE and HM Treasury. That is no mean feat. Meanwhile he let’s yS condemn themselves out of their own mouths while delivering the occasional killer blow. Very smart bridge playing.

So in your mind Scotland can just demand absolutely anything in the negotiations, and if Westminster doesn’t agree to it then they are being evil bullies?

No, Scotland can demand anything, rUK can demand anything, with negotiation an amicable settlement is reached, or not. But if the vote is for Yes, independence is not up for discussion.

You remember what happened at the end of the War of the Worlds? The Martians were defeated by tiny creatures no-one could see.

In our case, that’s the midges.

I just can’t see how there can be an effective currency union when the aims of the two parties are quiet so different.

How can two countries with different objectives share one bank?

Or the first foot and mouth from “carry on up the kyber?” Where’s Terry Scott (RIP) when you need him?

How can two countries with different objectives share one bank?

To be honest, it’s not an issue I’m all that fussed about either. It makes sense for trade to keep one currency, but a Scottish Pound pegged to the rUK Pound would do just as well for that, and even if it’s not pegged it’s not a massive deal.

Just give us our share of the Bank of England reserves, and we’ll set up our own central bank.

Heh,l have a polish laddie just joined my dofe group,he didn’t know what midges were..his wee face on being shown youtube 😈

To be honest, it’s not an issue I’m all that fussed about either. It makes sense for trade to keep one currency, but a Scottish Pound pegged to the rUK Pound would do just as well for that, and even if it’s not pegged it’s not a massive deal.

It seems to be a deal-breaker for AS though…

Just why is he so keen to keep it?

I’ve no problem with debts/assets being shared equally, that is only fair.

Just why is he so keen to keep it?

No idea.

I think maybe it’s a negotiating stance – you don’t reveal your plans B, C and D until you can’t have your plan A. And that (despite the triumvirate’s pronouncement) won’t be decided until after the referendum.

Scotland can just demand absolutely anything in the negotiations, and if Westminster doesn’t agree to it then they are being evil bullies?

Thing is, that this whole episode has been kicked off not by Salmond (et al) ‘demanding’ anything in the negotiations, but rather they have asserted something as a universal and settled fact in their white paper, when in fact its a negotiating position.

Scotland will continue to use the pound

The reaction by the unified westminster parties to rule it out has to be seen in that light, its not a negotiation, but a rebuttal of a direct claim made by the yes campaign and put forward as a foregone conclusion.

Salmond’s campaign has repeatedly been caught out telling lies to the public about what will happen in the event of a yes vote (the advice over EU membership for example) – countering these lies cannot be seen as bullying, its setting the record straight!

No idea.

I think maybe it’s a negotiating stance – you don’t reveal your plans B, C and D until you can’t have your plan A. And that (despite the triumvirate’s pronouncement) won’t be decided until after the referendum.

Well, until he comes clean on why I can’t see how/why Scotland can keep the pound. Seems only fair.

Just give us our share of the Bank of England reserves,

Those ARE assets and you can have some of them! 😉

You can’t reveal your plan B (sic) and C until you have given them some thought! The millstone that is sterling (how appropriate) is already plan B……so we should be saying plans C and D. I wonder what plan w will look like?

The currency issue is huge, simply because right now people and businesses have assets both in Scotland and the rest of the UK. If they get it wrong then an independent Scotland could be in the sh*t before it’s even taken baby steps.

Scotland will continue to use the pound

Well, you see, that is true. How it’s done – as part of a currency union, as a separate but pegged currency, or just using it anyway the way US dollars are used worldwide – that’s the bit that has to be negotiated.

But fundamentally, if Scotland wants to use the pound, there’s no way to stop us.

fundamentally, if Scotland wants to use the pound, there’s no way to stop us.

Well, there we’re back to the ‘but you have to join the Euro for EU membership’ discussion, and the circle starts again…

if Scotland wants to use the pound, there’s no way to stop us.

Of course not. But you will have little control of your economy.

Also, I thought financial services were a major section of your economy? Genuine question, do they still work if the currency isn’t yours?

The currency issue is huge, simply because right now people and businesses have assets both in Scotland and the rest of the UK

At the moment business have assets all over the world, as do people. It’s still no big deal. If I want to pay a supplier, I go into my online banking, pick the recipient, and send the payment. Whether that’s a UK supplier or a German one is all the same, just a different option on the pull-down menu.

Exchange rates can vary, but probably not all that much and not quickly. £/€ hasn’t shifted anything worth bothering about for years.

It’s not a big problem between NI and RoI, between US and Canada, etc.

But you will have little control of your economy.

As compared to the zero control we have now? 😉

But fundamentally, if Scotland wants to use the pound, there’s no way to stop us.

Scotland could try to do that but if for whatever reason the Scottish economy goes belly up whose going to bail it out?

I very much doubt the BOE will be putting its hand in its pocket…so Scotland will have to look after itself ergo why not have an independent currency?

They still work and may even go belly up (then what) but more likely if they are sensible they relocate to a country that is able to support them. Imagine what credit rating you would have if you are based on a country that has technically defaulted and has no lender of last resort.

Say what you like about bankers, but they know what side of the bread is buttered.

So that’s the banks gone, oil may/may not start to decline, thank God for the beauty that is whiskey. Protect that for all it’s worth!!!

the politics of rUK aren’t going to allow for currency union, no mainstream party will go to the electorate in 2015 with a manifesto that sets out how they are going to cede sovreignty

additionally any ceding of soveignty may well have to go to a rUK referendum as this is what has been established as a hurdle for changes in EU treaties that impact our sovreignty

To be honest, it’s not an issue I’m all that fussed about either. It makes sense for trade to keep one currency, but a Scottish Pound pegged to the rUK Pound would do just as well for that, and even if it’s not pegged it’s not a massive deal

nor is it currency union, you might as well peg the Scottish currency to the euro as you will have to sign up to adopt it when you apply for EU membership

as for all the nonsense on the “we won’t let them go” is just rubbish. there will be a groundswell in rUK public opinion to say “have you gone yet and close the door on the way out” 😉

As compared to the zero control we have now?

I didn’t realise Scotland had no representation in Westminster? Or are your MP’s incapable of voting on anything? 🙂

I get the impression that AS is at best being disingenuous, at worst a downright liar..

I think you really need to understand how currencies work, the reserves back up liabilities incurred by the BofE, therefore whilst there may be £50 billion of assets but these are matched by £47 billion of liabilities – you have to look at the net position of £3billion.

If you choose to set up a new currency, you will issue notes etc in exchange for sterling (and maybe other currencies) it will be this exchange process that will create the initial reserves of a new central bank, which will be sterling denominated (or whatever other currencies are exchanged), but then this can be sold (maybe back to the BofE so money supply is reduced) for other assets.

think you really need to understand how currencies work, the reserves back up liabilities incurred by the BofE, therefore whilst there may be £50 billion of assets but these are matched by £47 billion of liabilities – you have to look at the net position of £3billion

That’s the nub of it for sure.

Scottish options would seem to be:

1) Ask to join the Euro – Ha Ha Ha
2) Currency union with the UK – No longer an option probably
3) Use the pound anyway – and be at the mercy of big bad Westminster
4) Set up a new currency – which would be annihilated by the speculators before you say ‘Knife’

It’s been a wonderful fantasy and I’m impressed Wee ‘Eck has kept it up for so long.

Surely it’s time to stop the game now?

As compared to the zero control we have now? [/quote]

See wd’s reply explaining that you’ll actually have less control. Hardly independence in any fundamental sense is it?

Under a currency union you give up full independence over your economic decision making – both monetary and fiscal policy.

But no one in the real world has full independence in decision making over monetary and fiscal policy when global markets have a gun against your head.

a Scottish Pound pegged to the rUK Pound would do just as well

Do you have any idea how expensive it is to keep currencies pegged and have freely convertible currency when global markets have a gun against your head? Ask Nigel Lawson or anyone else that remembers the ERM…

Also, I thought financial services were a major section of your economy? Genuine question, do they still work if the currency isn’t yours?

Of course. You surely don’t think that UK financial institutions only trade in pounds and within the UK, do you? They’re all constantly dealing in foreign currencies and trading on foreign markets already. (Holding guns against heads).

Surely it’s time to stop the game now?

Okay, if you can explain why Sweden, Norway, Iceland, Ireland etc all mange fine by themselves, but somehow Scotland will crash and burn without the rest of the UK to look after us.

Scotland has a strong economy, plenty of natural and human resources, we’ll be fine on our own.

Oof. We’re using Iceland and Ireland as role models? 😀

Iceland, Ireland etc all mange fine by themselves,

I’m thinking you may have missed out on some fairly big news stories over the past few years…

Okay, if you can explain why Sweden, Norway, Iceland, Ireland etc all mange fine by themselves

Yes they do and i’m sure Scotland would as well. Norways economy is largely based upon oil/natural resources and high levels of tax. Is this a model which would work for Scotland?

The issue is they are fully independent and in charge of there own destiny rather than trying to peg their economy to Germany by using the Euro.

For Scotland to be successful it would need to be fully independent. A half cut “we’ll still use the pound” would only end badly. This is whats happening currently with the smaller Euro states (Ireland, etc…)

ben – can you give me a link to Scotsave, as I’m looking for a savings account giving me higher returns on investments. Scotland will be honouring deposit guarantees won’t it?

As compared to the zero control we have now?

I didn’t realise Scotland had no representation in Westminster? Or are your MP’s incapable of voting on anything? [/quote]

This, that is just like saying England or Wales has no control over its currency.

Ben why would you pick three counties/regions that have ALL undergone major destructive banking crises to support your case. That seems slightly odd.

If Scotland goes independent, it has to issue it’s own debt to fund itself and, unless it want to technically default, to make payments to rUK. Who will hold these bonds? The main holders will clearly be Scottish banks for regulatory, liquidity and economic reasons. But who back stops the banks? Err the BOE? So are they going to accept naked sovereign risk? Is the Pope Jewish? Of course not, unless you live in la, la land.

Support provided for RBS in the crisis was 211% of Scotlands GDP. The asymmetries in the positions are glaringly obvious to all but yS spokesmen. It’s embarrassing for them to pretend otherwise.

I get the impression that AS is at best being disingenuous, at worst a downright liar. a politician

FTFY

Ach, you’re right. I give up. Scotland may have a better GDP per head than the rest of the UK, lower unemployment, and much larger natural reserves, but it’s all too difficult for us.