Originally Posted by Chris (Post 35890829)

She also said the referendum was a once in a lifetime event, at the same time as David Cameron promised an EU referendum if he won the 2015 general election.

Please don't be taken in by SNP spin. Nothing has occurred since the 2014 referendum that Scottish voters were unaware of. Brexit is a handy pretext. If it had not been that, it would have been something else.

Originally Posted by Chris (Post 35890835)

The lack of understanding of what the currency issue actually is, is shocking, even amongst Nats who presume to stand up and lecture the rest of us about it.

A currency is a means of evaluating and dividing up the total wealth of an economic area, and permitting trade within that area. One Pound Sterling has no intrinsic value. Its value is a reflection of the health of the economy within which it is the accepted currency.

A currency can only function properly if it is managed as part of the overall management of that economic area. That's why the US Dollar works and the Euro has been on the brink of collapse for the last 5 years. There is a single overarching financial authority in the US and there is a federal government which collects and redistributes the majority of tax income. That's the only reason Idaho can remain in currency union with California. The reverse - extremely limited central control and no means of wealth transfer via federal tax - is the reason Germany and Greece are straining at opposite ends of the Euro area.

Eventually, there will have to be a federal economic policy and fiscal transfers to keep the Euro working. Exactly the same level of integration would be required to keep a currency union between England and Scotland working. Of course, such a system already exists between England and Scotland; both Crowns and Parliaments were united, there is one government and wealth is transferred wherever it is needed.

---------- Post added at 11:14 ---------- Previous post was at 11:10 ----------



Yup. Scottish banks holding an equal value of Pound Sterling in order to guarantee the value of Pound Scots, which just about works until you start to wonder where the money is going to come from to finance mortgages, business loans and the rest.

All the wealth creation will be in England. All the banks would be English banks with offices in Scotland, regulated by English law and operating according to the interests of head offices in London. No money markets or indigenous financial services institutions in Edinburgh whatsoever. What a glorious state of affairs to aspire to.

Originally Posted by 1andrew1 (Post 35890846)

Some countries like Montenegro use the Euro but are not members of the Eurozone whilst many countries peg their currency to other currencies, primarily the Euro and Dollar.
In addition, Ireland used to have the same shared currency as the UK until 1978 but was fully independent.
So, I'm not sure it's as clear-cut as the text books may suggest.

Anyway, it looks as if the referenndum timing may be pushed back a bit. http://www.telegraph.co.uk/news/2017...-independence/

Originally Posted by Mr K (Post 35890779)

Brexit is certainly not a 'little thing'. It's massive and Scotland didn't vote for it.

If you believe in democracy what's wrong with letting them have a vote? They might well vote to remain inspite of Brexit. Only reason to object, is if you thing they might vote a way you don't want. However it's up to the Scottish people, not us. They voted to Remain and they voted for the SNP.

Originally Posted by Chris (Post 35890848)

I think you may need to re-read my post.

What the SNP demanded in 2014 - a full Sterling currency union - will not happen. Not ever. Full currency union requires a common fiscal and monetary policy to be secure. The Euro does not have one and is highly insecure. The US Dollar does have one, is utterly stable and is the world's reserve currency. The UK Treasury argued in 2014 - quite reasonably - that full currency union, complete with unified fiscal and monetary policy, is exactly what Scotland has right now, and to detach the government of Scotland from that of the rest of the UK would unavoidably end that state of affairs. You can't have a common fiscal and monetary policy between two governments which also claim both to be sovereign over their own affairs. It is a contradiction.

There is nothing to stop a third party country from using a currency that is not its own, either by directly circulating foreign banknotes, or else holding a supply of foreign notes equivalent to the value of domestic promissory notes it circulates within its own territory. For small, stagnant economies this can work fine. They lose some flexibility and dynamism but they save a lot of time and money because they don't have to worry about managing a currency for themselves.

You mentioned Ireland - they didn't quite do as you're suggesting. They hoarded a range of foreign currencies as backing for Pound Irish, buying and selling as necessary to ensure that the Punt retained parity with Pound Sterling. This approach is called a "currency board" and is widely used in many of the world's smaller economies.

The problem with any of the above from a Scottish perspective is that, by its rhetoric, the SNP doesn't see an independent Scotland as one of the world's small economies. In 2014 they talked it up endlessly. Their economic ambitions simply weren't in line with any achievable solution to the currency problem.

Originally Posted by 1andrew1 (Post 35890855)

In what way is the Euro insecure?

Originally Posted by OLD BOY (Post 35890857)

I can't believe you said that, Andrew! That made my day! :D

Originally Posted by Osem (Post 35890844)

Ahh but did she specify whose lifetime?...

;)

Originally Posted by 1andrew1 (Post 35890859)

My pleasure. :tu: I always like to take an evidence-based approach rather than a Project Original Fear one. If Chris proves me wrong I'm happy to have learnt something. :)

Originally Posted by OLD BOY (Post 35890865)

I wasn't agreeing with you, old chap! I just thought it was hilarious to ask so innocently how anyone could think the euro wasn't secure.

I'm still not sure if you were joking. I hope you were! :p:

Originally Posted by Osem (Post 35890866)

Didn't you know, there are no financial problems/uncertainties in Europe/the Eurozone? That's why we should have stayed in... :D

Originally Posted by OLD BOY (Post 35890868)

...and Greece's predicament is just fake news...:D

Originally Posted by 1andrew1 (Post 35890859)

My pleasure. :tu: I always like to take an evidence-based approach rather than a Project Original Fear one. If Chris proves me wrong I'm happy to have learnt something. :)

Originally Posted by Chris (Post 35890872)

Not meaning to sidestep the question but it has been addressed at length in the Eurozone Colapse thread, many times over.

In essence, without a system of federal tax and redistribution, the Eurozone will always inevitably end up in the situation it is now in, with countries like Greece, Italy and Ireland coming perilously close to bankruptcy while massive amounts of currency accumulate in more efficient states like Germany. Bailouts have followed protracted negotiation and brinkmanship whereas in a properly functioning diverse currency zone, such as the USA, it is automatic.

Originally Posted by Chris (Post 35890872)

Not meaning to sidestep the question but it has been addressed at length in the Eurozone Colapse thread, many times over.

In essence, without a system of federal tax and redistribution, the Eurozone will always inevitably end up in the situation it is now in, with countries like Greece, Italy and Ireland coming perilously close to bankruptcy while massive amounts of currency accumulate in more efficient states like Germany. Bailouts have followed protracted negotiation and brinkmanship whereas in a properly functioning diverse currency zone, such as the USA, it is automatic.