Saturday, 5 July 2014

May You Live in Interesting Times! (an old Gaelic curse)

Take 25% of Sterling's foreign exchange earnings out of this PwC 'Through the Looking Glass' fantasy and just how screwed is the rUK's economy?

rUK has an underpinning fiscal instability which is the level of Bonds, QE and UK Government debt the City of London is currently propped up on, estimated to be in the region of 400% of the present UK GDP, according to analysis carried out for the Jimmy Reid Foundation by the Cuthberts.

This situation is likely only to get worse given the true failure of austerity to encourage the expansion of the rUK product and manufacturing base, inward investment outside the M25 orbital and a rUK economy top loaded by the City of London. If the City of London catches cold then rUK is going down hard, we are talking 1928 or South Sea Bubble hard, and a state of affairs which will make Greece look like a picnic, Wiemar just a blip and Zimbabwe looking fiscally and economically solid.

The most likely trigger will be a rise in US Fed or EU Central Bank interest rates which Sterling will have to track to prevent capital doing a runner from the City. The current re-inflation of the mortgage bubble by London prices is a further weakness because this will force the BoE to raise Sterling interest rates, something the very iffy state of the rUK economy can not afford, and the current chief of the BoE has warned the UK Government of this fact.

rUK based multinationals are sitting on big piles of cash which they are recycling back to their investors rather than investing in their business in the rUK. SME's in rUK are struggling to get finance or backing for new products as UK Treasury policy continues to be based solely on supplying puncture repair kits to the City of London.

None of this is reflected in PcW's glossy report - in the meantime the UK's economy remains reliant on the City of London's casino gambling and Scotland's energy, product and manufacturing surplus for its survival.

Take Scotland out of the UK headline figures and OECD figures indicate an independent Scotland at 4th in terms of GDP per head and rUK at 8th, well below France. Chuck in 'no currency union' on Scottish independence, a devaluing pound Sterling, increasing inflation and the rise in Sterling interest rates this would trigger and you have a recipe for economic disaster in rUK.

What if the newly independent Scotland says you can stuff your £ Sterling, keep it, we will take the £6 billion lodged in the BoE back, you can keep all the UK Debt, your already struggling industrial base can deal with the additional £660 million per year costs 'no currency union' puts on rUK product and manufacturing trade with Scotland? 

For us Scots?

We must also be aware what such a two fingered, stuff Sterling, salute to the Whigs and Tories at Westminster's rUK Parliament would mean for the newly independent Scottish economy while we sought new markets for the goods and products we currently sell to rUK and which would no longer have a market, as a result of a Sterling crash.
It can be done but would take time and increase our reliance on our oil and gas reserves in the short term to medium term.

For folk in the rUK?

They should be aware just what Miliband, Clegg and Cameron are wishing for as they seek to belittle, berate and isolate an independent Scotland with their empty threats of 'no currency union' and all the rest of their insulting pseudo-economic baloney and mumbo-jumbo.

I would suggest on the Yes side we should abide by that fine Scot's expression and 'Keep the Heid' no matter the provocation; provocation which is only going to increase and get much nastier between now and September the 18th as the mysterious re-birth of the non-existent 'SNLA' (aka MI6 agent provocateurs and the Orange Order) reveals.
The old Scot's curse - "May you live in interesting times." has to be our watch word as we deal with the ever increasing fear driven bile, slander and hatred from the Better Together / No Thanks campaign as the opinion polls continue to close and the likely 'Yes vote' becomes an increasing certainty.


  1. I can't help but wonder, given this lot's track record and the abyss they face, if their gloves will come off and, to fcuk with The Edinburgh Agreement and international law, they will attempt to militarily intervene?

    Thankfully, we have an FM and government as well as a broad movement who are a global exemplar of peaceful, reasoned, evidence-based argument in the agora of public debate and opinion.

    What, however, shall they do when confronted with the hard fact that their collective "tea is oot"? I suspect there will be mayhem south of the border that will, hopefully, bring to fruition Tam Paine's vision of a genuine English democracy (and will see Wales and Ireland restored - along with Cornwall - to their full constitutional sovereignty).

    Interesting times, indeed, as the Chinese also recognized.

  2. We certainly live in interesting times, none of us want to see our neighbours beggared but given comments on various publications this does not seem the norm from the view from the South. They have taken on the lie which we were supposed to believe that we are the beggars and they are laying the table for us. Only Independence will show they any different. How many times are we told, if you vote for Independence, as soon as you are broke you will be back. Insulting yes, and that we seem all to be on benefit or that we do not pay taxes etc.
    I am quite sure that our masters in Westminster are very well aware of what Scottish Independence will mean to them, they do not want the markets to get a whiff of the panic that they are feeling. I have no doubt they will try something to stymie it.