Re: if the scots go, do you care?
 

No need to get hung up on the credit rating, as a country's credit rating is determined differently from that of consumers. Scotland would be assigned a rating immediately, and it's international borrowing costs (interest rates) would depend on how high/low its credit rating is at a particular time.

Re: if the scots go, do you care?
 

This...

AT present it is only speculation about a speech he will give tomorrow, I assume the timing i s as much to do with the House of Commons debate today on " Currency and an Independent Scotland" so tone may have more to do with placating Tory backbenchers than anything else.
Other sources are reporting that all three Westminster parties agree that there will be no currency union.
It will be very interesting to see the actual text of the speech, but lets assume it is as reported.
That would be extraordinary as they would be acting against there own interests, but more importantly it may be signalling there approach to sharing assets.
So an Independent Scotland would then have to use its own currency, no big deal, probably tie it to the value of sterling at least initially. However one of the likely consequences would be that iScotland may not be prepared to take on a proportion of UK debt, if its not getting a share of assets why would it take a share of debt.
The savings in not servicing a share of debt in the region of £170bn would be enormous and easily off set any additional cost of borrowing. The biggest losers could end up being the rUK as 10% of its existing economy goes, but all the debt stays, and the assets of Scotland are no longer available.

Re: if the scots go, do you care?
 

what lovely people, thank you so much.

Re: if the scots go, do you care?
 

i doubt this would be the outcome

The scots would keep their assets but would still be required to pay their share of debt

no problem for me if they separate but do they know the consequences?

Re: if the scots go, do you care?
 

I don't follow. On what basis would Scotland be in a position not to take on a proportion of UK debt?

There is form here. When the Czech and Slovak republics formed, both national debt and national assets were divided in proportion to the populations in the Czech and Slovak territories of the federal Czechoslovakia. So the Slovaks got one third of the railway carriages, aircraft, military hardware, etc. They also took on one third of the national debt.

Both countries continued to use the same currency for a while, initially pegged at par, and then floating free, when the Slovak koruna dropped about 30% against the Czech version. Slovakia, nevertheless, achieved the economic indicators for Euro participation before the Czechs did, and now use the Euro.

The difference, of course, is that in Czechoslovakia's case the separation was by mutual consent, not due to one side deciding unilaterally that they'd be better off without the other. It will be much, much harder for Scotland to look for reciprocity in negotiations with the rest of the UK when they hold none of the trump cards. "You've made your bed, now lie in it" might become the stock answer from Westminster to Holyrood.

I'm not sure, in any case, that the same model would work in Scotland's case: not much of industry and infrastructure is in public hands. Rail companies and airlines are not national assets, they are private companies. Network Rail, a public entity, operates the rail track infrastructure for the whole of the UK, so presumably one part of that would be carved off (and would have to be paid for by Edinburgh, rather than funded from Westminster...). Transport Scotland would need to grow substantially to look after rail and air as well as roads. Building up all that bureaucracy doesn't come cheap; I haven't seen the Yes campaign breaking out the costs of setting up all these regulatory bodies for Scotland's independent government.

Re: if the scots go, do you care?
 

And how would they do that?

Hint: you can't just say 'A Scottish pound will be worth the same as a British pound' when exchange rates are set on the open market.

Re: if the scots go, do you care?
 

It can be used at parity initially.

Re: if the scots go, do you care?
 

well actually, yes you can, but only by giving up any notion of fiscal independence. Scotland would be entirely beholden to the Bank of England's position on inflation, interest rate management, foreign exchange/reserve management, etc. The only instrument left for managing the nation's finances would be manipulating the money supply (quantitative easing or whatever the opposite is called), which must be almost impossible to do when you're effectively a client currency of a larger state - and if managed poorly could lead to catastrophic price inflation.

Re: if the scots go, do you care?
 

I knew it.They wont even give us the steam off their piss!
http://www.bbc.scotlandshire.co.uk/i...sh-water-.html
Personally I think they are running scared!

Re: if the scots go, do you care?
 

Sure, but two seconds later, the value will be set by the market.

The only way I can see it working is if the Bank of England agree to exchange any Scottish Pound for a UK Pound on demand, but then you have all the problems Oakvillian mentioned; the BoE won't agree to that unless they have control over the Scottish economy to ensure they don't just print trillions of pounds.

Re: if the scots go, do you care?
 

It's no longer an issue. All three parties will announce tomorrow that formal currency union is not an option.

Re: if the scots go, do you care?
 

See post #223

Re: if the scots go, do you care?
 

How come the renminbi was tied absolutely to the $US for decades before 2005?

Re: if the scots go, do you care?
 

Whart yew doin in ere loike? Shirt stirin lil ol pansy thart yew arr :rofl:

Re: if the scots go, do you care?
 

It's an echo of Alex Salmond's assurance that Scotland would automatically be eligible to join the EU. He's the consummate salesman, highlighting the benefits whilst glossing over the nasty details.

Having a currency union with the Pound has always seemed a bit counter intuitive if Scotland is to want independence, and the fact that Westminister is removing this ambiguity from the voters' considerations is a good thing.