Thursday, 14 August 2014

"I'm just lovin' it ..."

No Camp; Ronald McDonald .... Economics of the Hamburger .. right? ....

Funny Carrel turns up with this in the Gruniad just when more and more folk in academia and major economists in Scotland are deciding for themselves 'Yes' is the best option for Scotland's future as another major economist, Sir Donald McKay, previous supporter of Devo-max, plants his flag on the Yes side.

Let's read what Dr Carney of the Bank of England - noting, just as on the UK debt announcement the last time Osbourne scared the Bejesus out of the world financial markets back in February, there are no histrionics, no 'emergency', no doom and gloom - actually said:

"Uncertainty about the currency arrangements could raise financial stability issues. We will, as you would expect us to have contingency plans for various possibilities.

It’s never a good idea to talk about contingency plans in public other than to assure people that we have contingency plans. And I’d just underscore that in terms of our responsibilities for financial stability, we do have a wide range of tools and plans.

Now some one less one eyed than Mr Carrell might take this to mean:

"Westminster politicians please shut up about no apparent option 'B' because you are scaring the financial markets, putting Sterling, as an internationally trade-able currency on a shoogly peg. I have talked with Mr Salmond (and undoubtedly the Gidiot Osbourne) and there are already contingency plans in place to ensure Sterling does not take a caning. Mr Salmond for the same reason is correct not to talk about a plan 'B' as this too would cause greater uncertainty for Sterling in the world financial markets"

Further in his statement Dr Carney says:

We are not the only authority that has responsibility for financial stability, and some of the things that we – some of the powers that we have are held jointly with Her Majesty’s Treasury, so we’re not the sole decision maker in these areas.”

Again this could be a veiled warning to Osbourne as in:

"If the shit hits the fan and Sterling goes down the tubes because of you playing politics with Sterling, Mr Osbourne, you will be on your own because I have now warned you what your frenetic claims are doing to short and long term confidence in Sterling."

After all UBS along with Deutsches Bank, the City of London, other international banks and financial players are already on record saying they want a Sterling currency union in the short to medium term to ensure Sterling stability. This has been made clear on many occasions in the Investors Chronicle, Forbes Magazine, Adam Smith Institute reports (other than the clown Ronald MacDonald) and many other journals the real financial folk use to make decisions. All of which makes clear that Scotland can use Sterling without any currency union - the disadvantage for Scotland is, in effect, becoming a net lender to Sterling, due to its current account, annual cash surplus under present trading conditions, a surplus only likely to increase as Clair West's current estimated production of 75 billion barrels (a reserve likely to be pushed upwards as surveying continues) comes on flow and the fields off the Hebrides and Clyde come into production.

That brings us to Glasgow Uni's Adam Smith Professor Ronald McDonald's worst case scenario and raises the question of just what happens if on independence Scotland says 'Stuff Sterling where the sun don't shine Osbourne, the currency has become far too unstable courtesy of all you and your Westminster pals scare stories, we have decided on plan B after all' and there is suddenly a 25%+ hole in Sterling's foreign exchange earnings as the Scottish economy, finance houses and banks dump Sterling for gold, or the dollar or even the triangular intergalactic Giganticphu?

It is at this point all Professor Ronald McDonald's nightmares about Sterling come home to roost but they will have no impact on Scotland as we will no longer have any holdings in Sterling except the effect on our economy of our main trading partner going down the tubes and needing an IMF bail out. Being nice folk, us Scots we could offer to lend Sterling - at a competitive rate like the UK Treasury did with Ireland - on a rate of say £5 buys one Giganticphu at 27% per anum, compounded, mortgaged against the Houses of Parliament and Whitehall in case of default.

The problem with attempts to twist people's words to fit what you want them to say is there are as equally different interpretations. The same goes with using OBR figures on oil and gas production which are routinely inaccurate as the Ronald MacDonald should understand and an article in today's Press and Journal makes very clear.

Where does this leave us with regards Sterling?

Well it looks like Dr Carney has politely warned Darling and his cohorts to wind down their 'no currency union campaign' before it does extreme and prejudicial damage to Sterling in the days after a 'Yes vote' in September 2014.

As for the majority of Scots -  we do not give a hoot, if there is no Sterling there is always plan B etcetera already set out and identified in Scotland's Future - our pounds are going no where.


  1. Anything that the Guardian can publish that denigrates Scotland or the Scots is like porn to Carrell, a real lowlife.
    Hopefully after independence he will stay south of the border and fade in to obscurity along with the currently floundering guardian.