Anonymous said: Seems you're a bit screwed currency wise. I see you are not overly supportive of a long currency union with England, but many yessers say they can use the pound regardless. Em, that's stupid isn't it? There are no examples of countries who use another countrys currency without agreement. Vote No and lets [ut thisto bed.
First off, let me say, that I am sick to death of the carcass of the currency being dug up to cause fear. I am really sick of it.
However, I shall humour your question with a response.
Yes, its true, I’m not overly fond a currency union in the long term, I believe it should be a short term arrangement. But I can see the logic in it, and it is the sensible choice.
But your point about not being able to use the pound without agreement is simply, with all due respect, absolute tosh. It is a fully internationally tradable currency, any nation on earth can use Sterling. So even if a currency union is still rejected during negotiations post a yes vote, we can still use it regardless. This would actually be a bonus. (As a side note, we can set up a separate currency and peg it to sterling through something like a currency board, which will have the same effect) we can have a system of sterlingization, where we use sterling without a formal agreement with the rUK. There are indeed many examples of countries who adopt another nations currency without any formal agreement to do so. Look at Latin America, many nations use the US dollar, and are fairly successful and stable. Panama is cited as an example of what can happen if country uses another currency without permission, in a negative context. What we are not told, is that Panama, through dollarization, has the 7th most stable financial system in the world, and is one of the fastest growing economies in South America.
But the main bonus of this arrangement is that it will keep the banks in check. As the financial institutions of Scotland will not have access to a lender of last resort which has a currency printing capacity. So Scottish banks will have to put aside capital for illiquidity (runs into trouble). This is sort of a free banking system, which Scotland has a tradition of, particularly in the late 1700’s and throughout the 1800’s. And guess what? The Scottish financial system was relatively secure and allowed Scotland’s economy to grow more so than England’s.
Also lets not forget, that we will start without our share of the National debt, which could put us in surplus, rather than deficit, if a currency union is denied. Any UK chancellor would have to be an economic illiterate to allow such a scenario to happen.
But the No side (such as you) will not acknowledge this, as its ingrained in you to peddle myths, and scare stories and untruths. Like this currency issue Which is very disappointing.
However, there will be a Yes vote, and there will be a currency union. Of that I have no doubt. But people should also not fear the scenario where we use the pound without any formal agreement, it could be even better for Scotland.