Not my own handiwork, folks, but from an article by Andy Anderson. As the media are currently playing hard on the currency issue, this explains why the UK government are bluffing (unless theyre willing to collapse their own economy to spite Scotland): The truth is that on the 19th of September after Scotland votes yes we will continue to use the pound exactly the same as we do now the money in your pocket or bank account will not be affected in any way. There will of course be effects at Macro-Economic level (national UK level) but it will not be obvious in your daily lives. The big change which will take place is this: The Scottish Government and the Scottish people will continue to use the pound sterling, indeed as an open international currency no-one could stop this even if they wanted to. Scotland would not have a say in a Sterling ‘currency union’ but they do not have that now, the good news for Scotland would be that they were no longer ‘in any part’ responsible for the UK national debt and more significantly sterling’s massive international debt. This would mean that overnight the r-UK would see a huge rise in its GDP-National debt ratio, at the same time it would have a significant worsening of its revenue-expenditure deficit, and in its balance of payment deficit. Since these problems would be entirely the responsibility of the r-UK Government the money markets would threaten a run on sterling if the UK Government did not take immediate steps to address these problems. Cameron’s Government would dispatch a delegation immediately up to Edinburgh to discuss with the Scottish Government steps to deal with this crisis. Alex Salmond knows this that is why he makes it clear that the present UK Government stance is pure bluff, as indeed it is. So very shortly after Scotland votes yes, the UK Government will be seeking help from the Scottish Government to save the pound and will be under pressure to get almost any deal which the money markets will accept. Alex Salmond will be in a strong negotiating position about the nature of the deal that will emerge and he knows it. Now for people like myself and Ronnie Morrison, we want a Scottish currency, but we do not want to see the pound sterling collapse. Both Ronnie and I see no long term future in the pound sterling, but we recognise that a collapse would cause great damage to both economies. Our objective would be to find a short term arrangement which would see Scotland use sterling, without a currency union, but with certain agreed temporary arrangements which would allow Scotland to move on to a new Scottish currency by mutual support and agreement. What people need to understand is that the commitment that the Bank “Promises to pay the bearer on demand” which they will find on every pound note is a commitment from the bank of England and more properly the UK Government to every holder of sterling all over the world. If we in Scotland use sterling, but are not part of a currency union then whatever sterling we hold is redeemable from the UK Government, they are in our debt. If however we are linked to that Government as now, or in a currency union in an independent Scotland in future we become debtors not creditors in the system. So in our view this issue of the currency is one which needs careful consideration and negotiation after the yes vote. It is not something which any Scot should be concerned about because Scotland will stand in a very powerful position in the post referendum discussions on this if we have a yes vote behind us. (Andy Anderson)
Posted on: Wed, 10 Sep 2014 20:42:15 +0000
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