In response many questions coming in from Scotland about the negative campaign against Independence, let’s make a few things clear. The predictions that the stock market will crash if the currency declines is nonsense. The stock market rises when a currency declines and declines when a currency becomes excessively overvalued as during the Great Depression. If we are talking about the breakdown of a government, then stocks rise as the hedge against government – look at Europe and even the German hyperinflation. Real estate has boomed because capital has fled there from Europe. If Scotland offers a better deal, watch the money flow north. It is a confidence game.
The prognostications of a coming Great Depression where the stock market falls by 70% overnight is merely trying to look at the Great Depression and repeating the events without understanding the global economy and causes. That was a Sovereign Debt Crisis – not just an economic decline. As for the Long Depression of 26 years during the 19th century, that was set in motion by war in Europe and flooding of the money supply with tons of silver – i.e. Silver Democrats. It need not be paper money that creates the problem, it can be tangible money as well just as it will be electronic money.
True Salmond has threatened to renege on the offer that Scotland would take on a share of the U.K.’s national debt if it votes “yes” on independence since Westminster rejects any currency union. That would be Britain loss and Scotland’s gain. Scotland should not adopt the pound for then it will not be independent. It can use the pound unofficially similar to the way Ecuador and El Salvador use the U.S. dollar and as such its economy is indirectly linked to that of US economic policy. Scotland would be out of its mind to move toward the euro. That would be a total disaster and defeat the potential for Scotland to become the port for capital in the coming economic storm. Capital fleeing the Euro has poured into the UK, but if the UK does not straighten up and fly on its own, capital will then flee the UK en route to the dollar. Scotland could really set the tone for the world abandon the pound and do not take on a national debt. Can you image the economic boom times for Scotland? As for the bankers who needed bailouts and claim they will exit, impose a 60% tax on their capital and kick them the hell out. They are manipulators anyway and are only worried that Scotland would not bail them out for their next loss.
If anything, Scotland need only look to Europe for it has become very clear since the turn in the ECM in 2007 has demonstrated that sharing a currency without sharing a government is highly dangerous. You cannot have a single currency without a single government and that is what Brussels is doing – the federalization of Europe. Britain is living in denial. This marriage is breaking up and Scotland should take the first step.
True, the scare tactics are all negative and portray Scotland cannot stand on its own two feet. The National Institute for Economic and Social Research has played politics proclaiming that Scotland could fail “within a year” if it uses the pound informally and refuses to take on a share of the national debt. Sorry, that is total biased nonsense. Do not take on the debt and stay away from the pound. Britain is moving to electronic currency anyway. In July all public transportation accepts cards only – no cash. In Manchester they are experimenting with stores agreeing not to accept cash. Scotland should retain its own currency as it once did.