Scotland's new currency

[Ticktock]

Scotland will join eurozone anyway - so they will have nice reserve currency, and zero debts - what's not to like?

Well, the fact that if they show they are willing to unilaterally declare that they can walk away from debts and say they're nothing to do with them then they may find it harder to get credit in the future. Which would mean consumer interest rates rocketing.

[AtW]

Well, the fact that if they show they are willing to unilaterally declare that they can walk away from debts and say they're nothing to do with them then they may find it harder to get credit in the future. Which would mean consumer interest rates rocketing.

Treasury said they will assume ALL debts in the event of YES vote, and now Osborne totally ruled that out by saying they won't have GBP - you can't reasonably expect independent country to take on debt denominated in other currency.

So, no - independent Scotland won't have debts. At least at start.

[scooterscot]

Well, the fact that if they show they are willing to unilaterally declare that they can walk away from debts and say they're nothing to do with them then they may find it harder to get credit in the future..

Just like Iceland eh? Now with stronger growth than the UK, minus toxic banks.

Fighting Recession the Icelandic Way

[ASB]

With no debt why is access to the money market required?

On the face of it it's a great start. All you will need is a balanced budget to pay whatever social benefits and infrastructure costs you decide are appropriate. Raise the cash from taxes through some convenient token then you can build the odd school and mend the odd pothole.

Hell, you could even back whatever currency you want with something of a fairly stable value.

So, no fractal reserve banking, a full backed currency, no borrowing ever.

Sounds ideal.

Could this be the start of a new non fiat money system.

[VectraMan]

Treasury said they will assume ALL debts in the event of YES vote, and now Osborne totally ruled that out by saying they won't have GBP - you can't reasonably expect independent country to take on debt denominated in other currency.

Why not?

[AtW]

Why not?

Because no state should issue debt if they can't print money to devalue it

[tomtomagain]

They'll sell oil for their own currency thereby creating demand for it - EUR and USD only ...

Why is it "their" oil? It's not like they put it there. And the entire UK population paid for the technology to extract it.

Obviously it is located it what might become their territorial waters.

However if separation occurs then *everything* will be up for negotiation.

[scooterscot]

Why is it "their" oil? It's not like they put it there. And the entire UK population paid for the technology to extract it.

Obviously it is located it what might become their territorial waters.

However if separation occurs then *everything* will be up for negotiation.

No. Just no.

[AtW]

Why is it "their" oil? It's not like they put it there. And the entire UK population paid for the technology to extract it. Obviously it is located it what might become their territorial waters. However if separation occurs then *everything* will be up for negotiation.

Maritime law is pretty well established, so if separation happens then oil nearby Scotland will certainly be property of Scottish Govt - that's not really up to dispute, the real issue is whether there will be enough investment to get more oil and whether price of barrel of oil will continue to be at current high levels (that's doubtful).

[centurian]

Treasury said they will assume ALL debts in the event of YES vote, and now Osborne totally ruled that out by saying they won't have GBP - you can't reasonably expect independent country to take on debt denominated in other currency.

Yes, the Treasury would expect Scotland to honour their part of the debt.

The Treasury didn't say they would assume the debts - just that they would stand by the them if Scotland didn't pay - not quite the same thing.

If Scotland didn't pay, investors would almost certainly treat that as a default - regardless of what anyone says. That's why Salmond isn't pursuing this as a direct strategy, because he knows he could blow up in his face.