Not letting the Scots have the pound

[BigGully]

I don't understand what there is to debate here. If they leave, we both have a currency called the pound. Ours the British pound, theirs the Scottish pound. And it's up to us individually to look after our currency. Of course we don't share a currency.

And it's not us keeping the pound, and them not getting it. We both get our own currency, which starts life in the same place as our current pound. Isn't that quite simple?

Your kinda just offering a name to their 'new' currency, you would still require two printing presses

 

[Triggaaar]

There is currently the Pound Sterling which is the currency of the UK and backed by the Bank of England. This will continue for England, Wales and Northern Ireland. Scotland will be a new nation and will therefore need its own currency which it will need to back by its reserves.

The Bank of England isn't some magical fairy god mother. Backed by the BoE just means that the country's reserves are behind the currency. If Scotland were independent, then it would have a central bank (backed by the Scotland's reserves) that would back it's currency.

The current Scottish notes are not "real" money

Well, I wasn't referring to existing notes, I'm referring to Scotland having a pound - her own pound. Backed by Scotland. That's the way that countries work.

Scotland should get her share of North Sea Oil and other reserves, and her share of the debt, and back her own currency. I can't see the problem.

 

[Westdene Seagull]

Scotland should get her share of North Sea Oil and other reserves, and her share of the debt, and back her own currency. I can't see the problem.

Exactly. I really can't see why the two fish faces are so surprised at this announcement. They have a choice - be part of a Union and share assets, currency and liabilities or become independent and the only things shared will be a border and a distrust of each other. Simple really.

 

[Triggaaar]

Exactly. I really can't see why the two fish faces are so surprised at this announcement.

Perhaps it was worded in a way to make them cautious about independence I'd think the problem was more salmon giving them the idea that they could possibly use the same currency as the UK, it's preposterous. The US gained independence from the UK - did they continue to use our currency? Of course not, they became an independent country with their own currency.

 

[Marxo]

Last night on the One Show Brian Cox told Scots living in England that although they couldn't vote they would automatically become Scottish citizens if there was a yes vote, they weren't very happy with that to say the least.

 

[happypig]

The Bank of England isn't some magical fairy god mother. Backed by the BoE just means that the country's reserves are behind the currency. If Scotland were independent, then it would have a central bank (backed by the Scotland's reserves) that would back it's currency.

Well, I wasn't referring to existing notes, I'm referring to Scotland having a pound - her own pound. Backed by Scotland. That's the way that countries work.

Scotland should get her share of North Sea Oil and other reserves, and her share of the debt, and back her own currency. I can't see the problem.

The problem (for them) is that a new currency would mean their credit rating wouldn't be as good and make borrowing more expensive.

Its academic anyway, they won't vote yes; the yes campaign has about 37% support at present. Salmon is claiming that all the don't knows will vote yes so he'll win but almost all the Scots I've spoken to (I regularly deal with our techs all over the UK as well as having a couple of dozen colleagues in Edinburgh) are against it. They don't feel independence will make them more Scottish; as one bloke said "only idiots and benefit scroungers are in favour"

 

[Creaky]

Perhaps it was worded in a way to make them cautious about independence I'd think the problem was more salmon giving them the idea that they could possibly use the same currency as the UK, it's preposterous. The US gained independence from the UK - did they continue to use our currency? Of course not, they became an independent country with their own currency.

It was actually 3 years after the end of the War of Independence before the dollar was introduced. The US had much the same problem as Scotland will have if the they do gain independence from the rest of the UK.

There will companies and individuals who between them will own billions of pounds - this currency would not suddenly become worthless and there would be nothing the UK could do if Scotland decided to carry on using the pound as their official currency. Of course if they did they would have no control over the international value of the pound but they could still set their own domestic interest rates.

If Scotland does gain independence then I can see that there would be a period of transition between continued use of the pound and the introduction and stabilisation of their own currency.

 

[severnside gull]

It was actually 3 years after the end of the War of Independence before the dollar was introduced. The US had much the same problem as Scotland will have if the they do gain independence from the rest of the UK.

There will companies and individuals who between them will own billions of pounds - this currency would not suddenly become worthless and there would be nothing the UK could do if Scotland decided to carry on using the pound as their official currency. Of course if they did they would have no control over the international value of the pound but they could still set their own domestic interest rates.

If Scotland does gain independence then I can see that there would be a period of transition between continued use of the pound and the introduction and stabilisation of their own currency.

The difference is that the scottish pound will not be underwritten by the bank of England which will give them serious problems with sourcing essential borrowing at competitive rates. Except in the very short term it could be unsustainable for a fledgling economy

 

[Creaky]

The difference is that the scottish pound will not be underwritten by the bank of England which will give them serious problems with sourcing essential borrowing at competitive rates. Except in the very short term it could be unsustainable for a fledgling economy

International credit rating is not based on currency but on the GDP and other economic factors - if it was based on currency then all the countries in the Eurozone would have the same credit rating.

 

[severnside gull]

International credit rating is not based on currency but on the GDP and other economic factors - if it was based on currency then all the countries in the Eurozone would have the same credit rating.

Indeed but with a currency which is isolated and almost unsupported (your GDP reference) there will be limited ability to attract competitive loans. When the next government pulls the defence projects and the scots close nuclear bases their economy could very easily implode.

 

[Creaky]

Indeed but with a currency which is isolated and almost unsupported (your GDP reference) there will be limited ability to attract competitive loans.

It would be interesting to see how an independent Scotland would deal with the huge amount of 'foreign' currency in the hands of industry and individuals - one possible way would be to introduce its own currency and restrict the level of foreign currency companies and individuals could hold - in effect forcing them to convert their UK pounds to the new currency - this would give the 'Bank of Scotland' a huge foreign currency reserve which could then be used to guarantee international loans.

 

[severnside gull]

It would be interesting to see how an independent Scotland would deal with the huge amount of 'foreign' currency in the hands of industry and individuals - one possible way would be to introduce its own currency and restrict the level of foreign currency companies and individuals could hold - in effect forcing them to convert their UK pounds to the new currency - this would give the 'Bank of Scotland' a huge foreign currency reserve which could then be used to guarantee international loans.

In practice I think there is insufficient critical mass and you can't base an economy on the possible goodwill or as Salmond would have it, dependancy, of a much larger neighbouring economy. His whole argument is based on taking advantage of the English/N.Irish/Welsh economies where it suits their needs. Their own infrastructure is simply not big enough to sustain itself without a massive elent of cross border goodwill and from my reading I am not sure that exists or indeed that it could exist in the circumstances.

 

[severnside gull]

It would be interesting to see how an independent Scotland would deal with the huge amount of 'foreign' currency in the hands of industry and individuals - one possible way would be to introduce its own currency and restrict the level of foreign currency companies and individuals could hold - in effect forcing them to convert their UK pounds to the new currency - this would give the 'Bank of Scotland' a huge foreign currency reserve which could then be used to guarantee international loans.

In practice I think there is insufficient critical mass and you can't base an economy on the possible goodwill or as Salmond would hsve it, dependancy, of a much larger neighbouring economy. His whole argument is based on taking advantage of the English/N.Irish/Welsh economies where it suits their needs. Their own infrastructure is simply not big enough to sustain itself without a massive elent of cross border goodwill and from my reading I am not sure that exists or indeed that it could exist in the circumstances.

 

[jakarta]

It would be interesting to see how an independent Scotland would deal with the huge amount of 'foreign' currency in the hands of industry and individuals - one possible way would be to introduce its own currency and restrict the level of foreign currency companies and individuals could hold - in effect forcing them to convert their UK pounds to the new currency - this would give the 'Bank of Scotland' a huge foreign currency reserve which could then be used to guarantee international loans.

A real incentive for a company in Scotland to stay there and not bugger off to a more commerce-friendly country eh?

 

[Dandyman]

It belongs to the UK. The Scottish Nationalist want Scots to vote to leave the UK. Leave the Uk and you're something else, so then it's not their pound to have. That's my understanding.

Not quite - A nation can call it's currency whatever it likes. An actual Currency Union however would require the consent of all parties. The problem then becomes as the Euro Zone shows if a fiscal union creeps in by stealth.

 

[Creaky]

A real incentive for a company in Scotland to stay there and not bugger off to a more commerce-friendly country eh?

Of course in the scenario I painted they would have to do so before Scotland gained its independence.

 

[Westdene Wonder]

I can understand the Scots being keen on Independence and will find the idea attractive but they must realise they can not cherry pick,leave and all the advantages of the past union will be no more,another point to think about, the top brains over the years have come south and few will return and take the chance of a small country success.
Regarding their currency it can only be named The Haggis.