bunkmedal Posted August 1, 2014 Share Posted August 1, 2014 What are the vast differences ? Plenty of economists think pegging it is better than a union. The lender of last resort thing really is a load of pish. The BOE couldn't afford our bailout the last time so I doubt they'd be able to in the future. God bless America. So what are these massive differences that make an formal currency union better than an informal one ? It depends what we're talking about specifically - I've said pegging the currency above (although I have no idea what BlackIsleBud is actually advocating - presumably nothing) but we'd have to ask whether we're creating a completely new currency, calling it the pound, and pegging the exchange rate to sterling; whether we're simply using sterling from outside in the way Montenegro uses the euro; and so on. Then to this you have to ask what the variations within those approaches actually are (fixed rate, band system, etc.) The negatives depend on what the alternative is. The Montenegro option, for instance, is basically used by transitioning states, tiny economies or countries with a long history of instability. It's completely incompatible with a state like Scotland and, among other things, would likely decimate our financial services sector. You've said that the concept of a lender of last resort is "a load of pish" but it's a vital part of financial services. Banks in essence operate on the basis of turning deposits into loans which they can make a profit from, but there has to be a guarantee that they won't run out of money in the process (i.e. a lender of last resort) for them to function. None of the states which use a system of this nature provide a lender of last resort facility on this basis - Hong Kong (which doesn't strictly use this system) is about the closest, but they have reserves about 33 times the size of what we would have. So Scottish financial institutions faced with that kind of cripping instability would likely move their operations abroad and our commercial banking industry would come to be dominated by overseas banks who open branches but have their operations guaranteed by overseas authorities. To cut a long story short, this is a recipe for destroying our financial services sector while also foregoing most of the macroeconomic policy levers independent states are supposed to have in the first place. It's an appallingly bad idea and only seems to be put forward because it means using "the pound" not because there's any merit behind it. In contrast one of the main benefits to a currency union is that the Bank of England would set monetary policy using figures for the whole of the economy rather than simply just the rest of the UK. We wouldn't simply be having our monetary policy set by a foreign central bank, we'd be a direct part of that process and our economic situation would have a role in the outcome (given it would be based on aggregate figures). A related benefit is that if we did have shared lending arrangements (i.e. the Bank of England acting as lender of last resort) we'd benefit from having a larger shared pool of reserves to guarantee our borrowing (which in theory should make the rate we pay at the bond markets cheaper). Before you launch into a soundbite about why Scottish banks were bailed out in the financial crisis using American money, the point in this case isn't about actual bailouts, but about favourable borrowing rates. For instance, the announcement by Mario Draghi of the ECB's Outright Monetary Transactions (OMT) system reduced borrowing costs for Eurozone states even though it didn't actually involve paying any money. The announcement itself was all that mattered - i.e. whether a central bank does or doesn't bail anyone out is less important in this context than the existence of the mechanism to do so in the first place. Link to comment Share on other sites More sharing options...
GalaKev Posted August 1, 2014 Author Share Posted August 1, 2014 If you are talking of the currency issue this is not correct. The issue is covered in the white paper. The options are clear -The pound in currency union -The pound without currency union - The Euro - A new Scots currency So in the event of plan A being rejected by Westminster, there is indeed a plan B,C and D detailed by the yes camp. I suspect what you are looking for is clarification from Westminster. Well good luck and keep looking. You will not find it. This is deliberate. Please do not be fooled into accepting a position that a no vote is a continuation of what we have now. The no camp have not published any vision for Scotlands future. They cannot agree themselves on what if any powers will be added (or removed) from Holyrood. We still do not know what will happen to the Barnett formula. We have no indication of any plan to redress the housing bubble once again developing in the SE. The only concievable measures are fiscal policy changes not beneficial to the rest of the country. When is the UK going to get a hold on its debt? What real assets does it hold? ( excluding those in Scottish territory) Barring market confidence what is holding the pound up? Will the inevitable currency price correction harm your business if we are in the UK? As a businessman, surely the possibility of a Euro exit would fill you with dread. A very real possibility. What is the plan if/ when we leave. Hope you manage to find those answers from Westminster. Good luck trying to find them. Tell the rest of us when you do. No is not the status quo. No is uncertainty. Why would I ask the Westminster government, when its the Yes campaign who want me to vote Yes? Tomorrow (fictitious), I am going to London The options I have are: Drive Fly Train Coach Hitch/Walk That is a list of options, the same as the white paper. But where does it say what order my preferences are, the same as the white paper. Although I would agree the first preference is a currency union. All you have shown me is a list, which I think you would agree is exactly the same as the list I have done. It shows you nothing that my preferred choice in order is: fly, train, drive, coach then walk. Its all very well saying Westminster does not even know what its going to about Scotland, in the event of the a no vote. However the Yes campaign can't even tell me what will happen in the case of a Yes vote. Sort, these fundamentals out, then yes, I agree you're arguments about Westminster and Scotland would carry a lot more weight. Link to comment Share on other sites More sharing options...
Confidemus Posted August 1, 2014 Share Posted August 1, 2014 Why would I ask the Westminster government, when its the Yes campaign who want me to vote Yes? Tomorrow (fictitious), I am going to London The options I have are: Drive Fly Train Coach Hitch/Walk That is a list of options, the same as the white paper. But where does it say what order my preferences are, the same as the white paper. Although I would agree the first preference is a currency union. All you have shown me is a list, which I think you would agree is exactly the same as the list I have done. It shows you nothing that my preferred choice in order is: fly, train, drive, coach then walk. Its all very well saying Westminster does not even know what its going to about Scotland, in the event of the a no vote. However the Yes campaign can't even tell me what will happen in the case of a Yes vote. Sort, these fundamentals out, then yes, I agree you're arguments about Westminster and Scotland would carry a lot more weight. You know what? I think your conscience is talking a little here. Saying you want to vote Yes but can't is your way of telling yourself it's OK. It's not. A No vote is a clusterfuck. Link to comment Share on other sites More sharing options...
Blaven Posted August 1, 2014 Share Posted August 1, 2014 Why would I ask the Westminster government, when its the Yes campaign who want me to vote Yes? Tomorrow (fictitious), I am going to London The options I have are: Drive Fly Train Coach Hitch/Walk That is a list of options, the same as the white paper. But where does it say what order my preferences are, the same as the white paper. Although I would agree the first preference is a currency union. All you have shown me is a list, which I think you would agree is exactly the same as the list I have done. It shows you nothing that my preferred choice in order is: fly, train, drive, coach then walk. Its all very well saying Westminster does not even know what its going to about Scotland, in the event of the a no vote. However the Yes campaign can't even tell me what will happen in the case of a Yes vote. Sort, these fundamentals out, then yes, I agree you're arguments about Westminster and Scotland would carry a lot more weight. Ok. Ficticious it is. Or hypothetical. Lets say the people of London did not want you travel to London. They were doing everything they could to stop you from going. You put on the radio or tv to get information about your travel plans and all thats reported is " no flights, rail,road or boat journeys in or out of London. In fact the people of London are stopping anyone from getting in. How do you get in? They know you want to fly in. They stop you and say NO. Do you then tell them the next way in which your going to try and get in so as they can stop you that way too? You really need to try and look past these barriers that the UK have built. They are barriers made from old doors and tables, not bricks and mortar or wire fencing. Link to comment Share on other sites More sharing options...
git-intae-thum Posted August 2, 2014 Share Posted August 2, 2014 Why would I ask the Westminster government, when its the Yes campaign who want me to vote Yes? Tomorrow (fictitious), I am going to London The options I have are: Drive Fly Train Coach Hitch/Walk That is a list of options, the same as the white paper. But where does it say what order my preferences are, the same as the white paper. Although I would agree the first preference is a currency union. All you have shown me is a list, which I think you would agree is exactly the same as the list I have done. It shows you nothing that my preferred choice in order is: fly, train, drive, coach then walk. Its all very well saying Westminster does not even know what its going to about Scotland, in the event of the a no vote. However the Yes campaign can't even tell me what will happen in the case of a Yes vote. Sort, these fundamentals out, then yes, I agree you're arguments about Westminster and Scotland would carry a lot more weight. The thing is Kev, you are adopting "no" as your default position. This is not objective. Why not examine the uncertainties of a "no" as rigourously as those of a yes vote. Is it not up to the no camp to convince you with the arguments also? As already pointed out there are glaring questions that the no camp are not even attempting to answer. Yes have at least tried to provide answers on independence. There is uncertainty over a yes vote because a lot of the answers on independence need to be given by the UK govt. For obvious reasons Westminster will not do so (unless they can make political capital from it). They are the ones hiding the facts. My previous post to you gave numerous uncertainties of a "no" vote. Did you manage to find any answers to these? Has anyone from BT attempted to cover them? No they won't tell us. There are uncertainties in both arguments, but only one side has attempted to give answers. Link to comment Share on other sites More sharing options...
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