Maybe the true size of it is!
So multiple major oil&gas companies (many of whom are NOT British) are making multi-billion pound investments there. Which means they must know something about the size of the field. And, so does the British government. And, yet, the TRUE size of it is a giant secret to be used to keep the Scots in line?
Did the Clair field also figure in Kennedy’s assassination somehow?
Were they secret newspapers?
I’ve been letting a lot of them go, but I just had to comment when one of them posted about how “Better Together” (that’s how you spell it, Pjen) warning that oil will run out, by posting about a new oilfield. He really didn’t seem to get why my reply was merely a link to “Non Renewable Resource” at Wikipedia. Oh well.
Still, he then went on about Norway and how Scotland will have an oil fund just like them. Facts like “Norway can do this as the rest of their social services are funding by extremely high taxation and cost of living” and “the fund was started 24 years ago, during the most fertile period for drilling, and as Statoil has the majority of the drilling rights and are majority owned by the Norwegian state a lot more money goes to them than in the UK with the leasing the right to drill to private companies” just seemed to make him get angry.
This is what worries me. Short-termism and a blinkered view of what can be done with the dwindling oil stocks. Oh and FREEDOM!
With circulation of some of them they may as well be.
I wish people wouldn’t use the existence of Scottish banknotes to suggest that Scotland is somehow already part way to having its own currency. It’s disingenuous at best, although I understand why the Yes campaign do it if they think it might sway some people. For one thing, actual physical currency is only a small part of total money. More importantly, the notes issued by some Scottish retail banks must correspond directly to reserves that the issuing banks hold at the UK central bank. They have no special authority to create reserve money.
The currency question is not about whether the Clydesdale Bank still gets to issue pretty banknotes. It is about monetary policy, interest rates, the central bank - important facets of independence, all of which would be out of an independent Scotland’s hands unless it had its own currency. The alternative, be it “sterlingisation” or various currency unions to be negotiated with countries that right now don’t seem very enthusiastic about the idea, would offer no more economic independence than Scotland has at the moment, and quite possibly less.
But with independence the Bank of England would have to decide whether to continue the provision for Scottish banknotes or forego the deposits made by issuing banks. Either the status quo would continue, or Scotland could purchase pounds to hold as reserves and continue to use the physical notes.
Admittedly Scotland would not control its own interest rate, but it worked well for Ireland which tied the Iris Pound to reserves of sterling for many decades.
There’s another thread on the possible aftermath of a majority Yes vote: Whither Scotland? - Great Debates - Straight Dope Message Board
There is also the risk of policy error. Specifically, Scotland could decide to adopt the Euro rather than stick with their current natural currency area. This in turn relates to the odds that pragmatists will be running the country.
The Yes folk have pretty detailed white papers though, so it would be reasonable deweight this risk relative to that of other independence movements.
Panama incidentally maintains a one US dollar / one Panamanian balboa fixed exchange rate and their coinage has identical sizes to US coinage. They have a dual currency system. So it can work: it just means that Panama has no say in its own monetary policy. Also they have no central bank that can act as a lender of last resort to their banking system.
Argentina tried it for awhile; it didn’t end well: 1998–2002 Argentine great depression - Wikipedia
Martin Wolf discusses the issue in today’s Financial Times.
He thinks that the rest of the UK should agree to a currency union, “provided the institutions of that union are established under the law of the UK and are accountable to its government.” So financial regulation would occur in London and Scottish Banks would have a lender of last resort. If bailouts occur, the Scots would have financial obligations, set out ahead of time.
There are worries that Scottish fiscal irresponsibility, should it occur, could undermine the pound. I’m not sure I agree. Regardless though, there might be pressure to impose deficit caps on Scotland by binding agreement and treaty.
Another option would be for Scotland to adopt its own currency. That wouldn’t necessarily be awful. I confess though that this aspect of international economics is less than clear to me. At any rate Wolf opposes a currency union if the Scots vote for independence. The idea is that it is a little odd to separate from a home country while also opting for less control over economic and regulatory policy, rather than more.
New poll out which shows Scotland’s Yes campaign for independence has taken the lead with just days to the referendum, the Sunday Times reveals tonight.
A poll by YouGov puts the pro-independence group ahead for the first time, with 51% in favour of independence and 49% against.
It’s really going to happen. Salmond might just pull it off.
That YouGov poll may be highly suspect. On another message board it have seen a Twitter pic indicating that they were actively seeking Yes voters. Time will tell.
And if it doesn’t, it’ll come up again in what, 5-10 years? Maybe with a better-thought-out plan with more persuasive power.
Why wouldn’t Scotland go right for the Euro, ASAP, instead of the pound or something tied to it if they’re not going to control their own finances anyway? They’d at least be easier for the rest of Europe to invest in.
It’s really not about Salmond, and really not about the SNP. There are quite a lot of people who have never voted SNP, and never will, who will vote “Yes”. There are people who normally vote Labour who will vote “Yes”, Green Party and others also.
There are some who have previously voted SNP who will vote “No”.
You see? It is all very interesting.
The SNP managed to bring about a referendum: now it is up to the voters.
The interesting thing is that there are people not previously engaged with politics who now become involved. Perhaps by simply deciding to vote, perhaps by taking part in public meetings around the country, perhaps by getting involved in active campaigning. On both sides, I think, although I’d hazard a guess that the “Yes” side is ahead in that way - “Better Together” doesn’t really seem to go in for any actual public meetings and Q & A things as much.
Greater interest and involvement in politics amongst the electorate is surely a good thing to be welcomed, no matter which way this vote goes.
Because when you share a currency with a foreign country, you lose one tool for countercyclic economic policy. That makes inflation more volatile and downturns more difficult to recover from.
Germany currently shares a currency with Spain. Spanish prices were too high in 2008. They could be brought back into line via a) German inflation or b) Spanish deflation. The Germans don’t want to have inflation in the 4-5% range, for basically wrongheaded concerns. Deflation generally involves high unemployment: otherwise you can’t get the associated wage cuts.
If Spain had its own currency, they could simply devalue it. Problem solved via an export boom, after a recession of ordinary length.
Over in the US, New York and Oklahoma share the same currency despite being vastly different sorts of economies. But there are other counter-cyclic tools. When there’s an oil boom, Oklahoma sends more funds to the Feds. When there’s an oil bust (which has happened) they receive funds on net. Over the past several years Florida has received massive cash infusions from the FDIC. But nobody cares: we’re all the same country, right? Also, migration takes up some of the slack.
Now if both regions are hit by the same sorts of economic shocks, the above matters less. I figure that Scotland is more like the British economy than it is like the German/Italian/French one.
Frankly though, if Scotland adopted its own currency, call it the kilt, that would be ok too. They could target its value like they do in Hong Kong and accept interest rate volatility. Or they could let the currency float and set interest rates where they want. Interest rates matter, because higher rates attract foreign cash, strengthening the currency and (also) making the country’s exports less competitive. The process also works in reverse.
I meant wouldn’t they be better off with the Euro than the pound, if it’s a given they won’t control their own finances anyway. Their currency would be based on an entity much larger and probably more stable.
I think any new Scottish currency should be called the quatloo.
The Euro experiment has been a grand clusterf#&k since the start of the Lesser Depression. For Scotland to join that sinking ship would be ill-advised.
I admit that the issue has a lot of moving parts and that I haven’t studied it in its entirety. But consider this. Denmark has 5.6 million people. New Zealand has 4.5 million. Each have their own currency with a population close to Scotland’s 5.3 million. It’s wholly viable.
The disadvantages of a single currency lie in reduced flexibility in responding to economic downturn. As an example, consider the gold standard, a variant of a fixed exchange rate. If you look at a chart of economic recovery during the Great Depression, it correlates pretty well with a country leaving the gold standard (and therefore loosening monetary policy).
In another thread UDS claims that, “the existing rules require new [EU] members to adopt the euro.” That’s a problem: I hope that it could be finessed.
I see wiki has an article on optimal currency areas. Methinks most of the features align Scotland with Britain, not the EU.