Who's Ryanair Gonna Call ? Amazingly, the RAF

[johnofgwent]

The scound could be supported by bonds or loans to the Scottish government, under which the government pays a fixed interest rate to the investor/bondholder until the bond reaches its maturity date. When the maturity date is reached, the government pays the bondholder the face value of the bond.

These could be called kilts...

[johnofgwent]

Scotland has now got it's independence and says to the BOE we want to use the pound, the BOE says we will not let you join our currency union, Scotland says well we are going to use it anyway. Scotland can produce notes with Pound written on them but they will not be backed by the BOE. Same as if you buy a £10 Amazon gift card, it has a value of £10 Sterling when used to shop at Amazon but they haven't magically created a currency called the Amazon Pound.

As I've said, Scotland can use the Pound (Scound) but if there is an imbalance of imports and exports between the 2 countries one of them will be on the receiving end of a very unhelpful exchange rate: and it won't be the BOE pound.

Ah now THATS another interesting point I had not thought through.

At the moment Scotland has Scottish pound notes which are legal tender (yes I know how restrictive that term really is, let's not go there).and are at parity with their English equivalents.

Would they still have Scottish pound notes and would they be tied to the value of an English one post departure ? After all, I recall the days of the Irish Punt..... Which was about 12% ?? below the value of an English pound when I last used them.

[Nick]

The scound could be supported by bonds or loans to the Scottish government, under which the government pays a fixed interest rate to the investor/bondholder until the bond reaches its maturity date. When the maturity date is reached, the government pays the bondholder the face value of the bond.

These could be called kilts...

That wont stop the un backed Scound being rocked by BOE adjustments. 

[Nick]

Will there be a hundred scoundrels in a Scound?

I think we're onto something here 😉. 

[patman post]

The scound could be supported by bonds or loans to the Scottish government, under which the government pays a fixed interest rate to the investor/bondholder until the bond reaches its maturity date. When the maturity date is reached, the government pays the bondholder the face value of the bond.

These could be called kilts...

[cromwell]

Scotland has now got it's independence and says to the BOE we want to use the pound, the BOE says we will not let you join our currency union, Scotland says well we are going to use it anyway. Scotland can produce notes with Pound written on them but they will not be backed by the BOE. Same as if you buy a £10 Amazon gift card, it has a value of £10 Sterling when used to shop at Amazon but they haven't magically created a currency called the Amazon Pound.

As I've said, Scotland can use the Pound (Scound) but if there is an imbalance of imports and exports between the 2 countries one of them will be on the receiving end of a very unhelpful exchange rate: and it won't be the BOE pound.

Will there be a hundred scoundrels in a Scound?

[Nick]

You're first point is exactly what I was saying.

The second point is debatable — if the currency isn't held in actual currency, in what form will recipients believe they've been paid?

Somewhere there has to be credit accepted by a recognised holder. And that credit has to be able to be transmitted either physically in promissory notes, or digitally. But none of that has to be agreed or approved by the currency's originating country...

Scotland has now got it's independence and says to the BOE we want to use the pound, the BOE says we will not let you join our currency union, Scotland says well we are going to use it anyway. Scotland can produce notes with Pound written on them but they will not be backed by the BOE. Same as if you buy a £10 Amazon gift card, it has a value of £10 Sterling when used to shop at Amazon but they haven't magically created a currency called the Amazon Pound.

As I've said, Scotland can use the Pound (Scound) but if there is an imbalance of imports and exports between the 2 countries one of them will be on the receiving end of a very unhelpful exchange rate: and it won't be the BOE pound.

[johnofgwent]

Both you and Pat are totally missing the point, nobody needs to ask permission to use the pound, and it's certainly nothing to do with notes or who prints them.

https://cms.law/en/gbr/publication/rebound-remodel-scottish-independence-an-independent-scottish-currency

However, in the absence of a formal currency union, the use of Sterling would not be without its challenges. In particular, without an agreement with the UK, a Scottish central bank would have no control over Sterling monetary policy, which would be set by the Bank of England (BoE). The BoE's statutory objectives include the maintenance of price stability and the support of the UK government's economic policy. As the BoE is an UK institution then, unless agreed between Scotland and the UK, the BoE would not take into account the requirements of the Scottish economy or public finances when deciding policy objectives.

For example, if the U.K. had no debt and was lent money to a USD based country, it would be in their interest to lend when the pound was strong, 1 pound = 2 USD, a loan of a billion pounds is 2 billion USD. The BOE could weaken the pound to 1:1 therefore they are owed 2 billion pounds. Scotland who maybe borrowed 1 billion USD, a repayment of 500 million have now had their debt doubled.

The point being, there are many pitfalls for a nation using a currency without alignment, and as I said, the BOE is not going to agree that with Scotland.

I must be going blind then because I swear your point on fiscal policy and alignment and exchange rate fluctuation is the very thing I was getting at.

No matter. Currently i have sufficient reserved to purchase all the maize, oil and salt I will need to make the popcorn for when this deadline approaches.

[patman post]

Both you and Pat are totally missing the point, nobody needs to ask permission to use the pound, and it's certainly nothing to do with notes or who prints them.

You're first point is exactly what I was saying.

The second point is debatable — if the currency isn't held in actual currency, in what form will recipients believe they've been paid? 

Somewhere there has to be credit accepted by a recognised holder. And that credit has to be able to be transmitted either physically in promissory notes, or digitally. But none of that has to be agreed or approved by the currency's originating country...

[Nick]

We did this a while ago.

An independent Scotland would indeed be able to use the pound, or the euro, or the old polish zloty, the Reichsmark or indeed any bloody thing it thought suitable.

I don't understand what "permission" a sovereign territory requires to do this, I suspect the only control the BoE could exercise is denial of supply of notes but I suspect other countries would happily be middlemen and measures to sanction them if they did would just make us look stupid.

I do not know.

I must also point out of course the BoE would never be the bank of last resort bailing out the banks of a completely independent company so obviously hostile to the UK

Both you and Pat are totally missing the point, nobody needs to ask permission to use the pound, and it's certainly nothing to do with notes or who prints them.

https://cms.law/en/gbr/publication/rebound-remodel-scottish-independence-an-independent-scottish-currency

However, in the absence of a formal currency union, the use of Sterling would not be without its challenges. In particular, without an agreement with the UK, a Scottish central bank would have no control over Sterling monetary policy, which would be set by the Bank of England (BoE). The BoE's statutory objectives include the maintenance of price stability and the support of the UK government's economic policy. As the BoE is an UK institution then, unless agreed between Scotland and the UK, the BoE would not take into account the requirements of the Scottish economy or public finances when deciding policy objectives.

For example, if the U.K. had no debt and was lent money to a USD based country, it would be in their interest to lend when the pound was strong, 1 pound = 2 USD, a loan of a billion pounds is 2 billion USD. The BOE could weaken the pound to 1:1 therefore they are owed 2 billion pounds. Scotland who maybe borrowed 1 billion USD, a repayment of 500 million have now had their debt doubled. 

The point being, there are many pitfalls for a nation using a currency without alignment, and as I said, the BOE is not going to agree that with Scotland. 

[patman post]

When I last looked, admittedly a while ago, the CIA World Book or whatever it is called listed a few banana republics whose main GDP derived from tropical fruit and tourism, who chose to use the US Dollar as it's sovereign currency. I suppose Uncle Sam could invade or nuke them but neither measure seems wise.

The point is those republics found it amenable to operate an economy based around the US dollar. But they hat no dog in the fight, or voice at the table, to be heard when decisions affecting exchange rates with the world were made.

I'm not taking issue with any of the above, but I think you may be surprised when you remember the full range of USD-using countries.

They are: Puerto Rico, Ecuador, El Salvador, Panama, Somalia, Turks and Caicos Islands, Zimbabwe, Guam, Timor-Leste, US Virgin Islands, British Virgin Islands, Marshall Islands, Bonaire, American Samoa, Federated States of Micronesia, Northern Mariana Islands, and Caribbean Netherlands.

At one time, the GBP might have been a rival to the USD for its spread and reserve use. Currently, that role is played by the euro...

[johnofgwent]

As for needing an Airforce, I've never seen more contradictory comments. You ask why they would need an airforce and then immediately state they would be in charge of their own airspace. How would they be in charge without an airforce?

Well I suppose I could ask a few of my mates if we fancy a week in the hills installing radars and missile systems but I think Wee Miss Krankie finds even them distasteful.

I guess Jewish submarines painted Peppa Pig pink are right out ??

[johnofgwent]

Scotland would not need Bank of England permission to use sterling, or any other currency it might choose.

Five US territories and 11 foreign nations use the USD as their official currency. It's also used with local currencies in several popular tourist destinations and as the quasi-official currency of many other nations in addition to their local currency.

A country's airspace is sovereign, but for international aviation to be possible, ICAO nations** grant all approved international air carriers the right to fly through their airspace without landing. To do so, they pay overflight fees. Would Scotland be an exception...?


**https://www.icao.int/MemberStates/Member%20States.Multilingual.pdf
Not all these ICAO member states have Air Forces to enforce their payment demands

We did this a while ago.

An independent Scotland would indeed be able to use the pound, or the euro, or the old polish zloty, the Reichsmark or indeed any bloody thing it thought suitable.

I don't understand what "permission" a sovereign territory requires to do this, I suspect the only control the BoE could exercise is denial of supply of notes but I suspect other countries would happily be middlemen and measures to sanction them if they did would just make us look stupid.

When I last looked, admittedly a while ago, the CIA World Book or whatever it is called listed a few banana republics whose main GDP derived from tropical fruit and tourism, who chose to use the US Dollar as it's sovereign currency. I suppose Uncle Sam could invade or nuke them but neither measure seems wise.

The point is those republics found it amenable to operate an economy based around the US dollar. But they hat no dog in the fight, or voice at the table, to be heard when decisions affecting exchange rates with the world were made.

I think the issue that really matters is that as a nation within the union, Scotland has a right to send elected members to Westminster where increasingly, Boris's reckless arrogance is reducing the Conservative majority and may yet lead to greater empowerment of SNP MPs in argument and debate over fiscal measures.

There is an argument that the SNP has the right to be heard in such debate but what good that may do is arguable. What cannot be disputed is that just as those banana republics have no elected voice in the Congress or senate, so an independent Scotland would lose that voice in Westminster.

Would this make a difference ?

I do not know.

I must also point out of course the BoE would never be the bank of last resort bailing out the banks of a completely independent company so obviously hostile to the UK

[patman post]

Clearly you didn't read what I wrote.

Clearly you didn't understand what I posted.

There's nothing to stop Scotland deciding to use the currency it sees works best for the country. Other countries do it with other currencies — some with formal agreements, and some without.

Scotland could even decide to become a euro using country. And the euro seems easier to use around London than current Northern Ireland or Scottish banknotes — despite the euro not even being pegged to sterling...

[Nick]

Scotland would not need Bank of England permission to use sterling, or any other currency it might choose.

Clearly you didn't read what I wrote.