Thursday, 2 May 2019

More a whimper than a bang

So we are off on the next instalment of independence for Scotland, Yes 2, The Sturgenator's return yet when it comes to the usual media and political squalor and squealing from the Unionistas, it is as if 2014 is back with a vengeance.

Jackson Carlaw peddling the same pish as he peddled in 2014 at FMQ's today, except, except; he appeared to be contradicting what he said in 2014 with regards to his precious, his sterling. It used to be it was "all mines'is", all Gondor at Westminster'is. Yet today the latest version of Jackson Gollum was annoyed the SNP membership voted to dump "mines'is" asap after a "Yes" vote. He seemed very upset the currency of Gondor was getting the heave-ho by financially reckless and stupid jocks.

Much has been written by many folk about what happened at the SNP Conference or what they would like to pretend happened - if you are the BBC or a Unionist Journalist - but here is my slant.

At my branch meeting we talked about the Growth Commission Report and generally decided it was mainly academic gobbledy-gook, wrapped up in a sweety wrapper while failing to address reality with respect to establishing a stand alone currency for Scotland. The six tests were much like the ephemeral question, "How long is a bit of string?", far too open ended. Luckily; unlike the "concerns' pressed by Common Weal on how the SNP membership were wrapped around Ms Sturgeon's finger and would rubber stamp it; we the membership, through our delegates, said, "No way! There must be a new Scottish currency within the term of the first independent parliament."


Well I being a bit of an OCD nerd, once something gets my interest I began to follow what is actually happening, in this case to Sterling:
As a University student in the 1970's I remember well when hyper inflation was the norm. While not quite the situation of the Wiemar Republic, where you were taking wheelbarrow loads of marks to buy a loaf of bread, it was still a concern to a student on a basic grant. When shopping for food you first headed for the bent can / burst packages section in the supermarket. We lived on pasta with chopped tomato sauce made interesting through the use of herbs and curry powder. We made use of the Student Union's subsidised food and booze, occasionally splurging out for a white pudding supper from the local chippy. If you were sensible you either had a good paying job lined up for the summer break, mine was as a 'clippy' on Alexanders Buses at Dunfermilne or worked as many nights as you could as a bar person in a very competitive market in Edinburgh. Didn't do me any harm and when you are young and a student there is a bit of excitement and fun in living like that. It was not so much fun for my parents whose mortgage repayments went up with an interest rate of 24% for a couple of years. By the time I bought my first house in early 1980, mortgages were down to 18.9% interest rates.

If I compare to where most folk were prior to the 1973 collapse of sterling and now, the poorest in our society are already on their uppers and struggling, many in work are struggling with rent and bills that two salaries a month barely cover and "May their God help them" if one or other goes sick. Currently the UK economy is in a far worse state with higher levels of true poverty than it was prior to 1973. Throw in stagflation and ordinary folk are in the shit up to their neck courtesy of Brexit.

The Catch 22 is, according to money market commentators on USA Bloomberg and across the EU, a free to trade new Scottish currency would quickly head upward of sterling £1.20 / Eu 1.50 to £1 Scots. That is why, until all pensions, benefits, taxation, vat and other UK Agency payments, such as War Pensions, are transferred to an independent Scotland's control, these pensions / taxation income would continue to be paid in a devaluing £ Sterling. Until the transfer process is completed 1:1 parity makes sense. My research tends to suggest the transfer of these fiscal activities will take between two to three years to complete fully. The side effect of such an arrangement is it may well help to prop up sterling over the same period which is a win / win for Scotland while we find our fiscal feet as an independent nation.

As to Scotland raising the reserves required to back the new currency; most of the commentators, outside of the usual unionist suspects who only see doom, gloom and disaster for too poor, too wee, too stupid Scotland, see little problem in an energy rich (fossil and renewable), unique product rich, financial services rich, innovative Scotland raising the reserve finance required on the world money markets.

So when folk ask me what about an independent Scotland's economy I do not answer with a whimper but with a bang.

The evidence is clear; Scotland's economy is going to be far worse off as part of the Brexit UK Union, no matter which ever way you wish to look at it. The future for Scotland's people both politically and economically, is as an independent nation.

As my old accountant would say; "and that is the bottom line."

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