Re: the Scottish independence issue
 

That's easier said than done since an independent Scotland will likely start with a national debt of between 60%-80% of GDP (their share of the national debt) and a projected annual budget deficit of about 6.5% of GDP.

Therefore they'll likely have £150 billion or more of debt and will likely have to borrow or print £15 billion or more next year.

I suspect the way it will work will be that Scotland will have to issue £150 billion or more in government bonds (could be in GBP or their own currency) and the money received will be used to retire the UK bonds. I doubt that Scotland can just take over bonds for the debt from the UK since those bonds are secured by the UK government and it is unknown what the credit rating of Scotland will be (Scotland may possibly have to pay a significantly higher interest rate to attract bond purchasers). It is possible that if the UK government will continue to back those bonds (probably unlikely), then those bonds could be become the debt of Scotland but backed by the UK.

Re: the Scottish independence issue
 

Where are you talking about? There are all sorts of developments on the Clyde these days ...

Re: the Scottish independence issue
 

Cinnamon is nice, but 'Mericans will not eat Haggis unless it is smothered in official orange dyed Processed Cheeselike Product.

Pete

Re: the Scottish independence issue
 

Doh, just shows how important it is to have local knowledge!

Re: the Scottish independence issue
 

The bonds would have to be in GBP otherwise no institutional investor would buy them. Or as you say, only the UK would be stupid enough to buy them.

Again I doubt Scotland would have much of a credit rating on their own currency, would have to stick to GBP to have any sort of trust. Maybe they can call Amex Global transfer...

Re: the Scottish independence issue
 

Scotland could issue bonds in any currency it wanted, and given that sales of oil are priced internationally in USD, and much whisky is sold to the US, issuing bonds in USD could make sense. Investors would thereby be insulated from exchange rate fluctuations of whatever currency Scotland is using, but would still be exposed to credit risk (risk of default). :unsure:

Re: the Scottish independence issue
 

They could also issue Euro bonds, which might be a good choice if they are required to sign up for the Euro in order to gain EU membership. But the real issue for Scotland is definitely credit risk, which could significantly affect the interest rate they could borrow at.

Re: the Scottish independence issue
 

The name Euro bonds is a misnomer. The definition of a Euro bond is a corporate bond that is issued in a currency of another country and were initially denominated in US dollars. I suspect you meant is government bonds denominated in Euros.

Re: the Scottish independence issue
 

You got to that before I did. I think Euro bonds have been around since at least the early 70's, long before the Euro was dreamt up. :nod:

Re: the Scottish independence issue
 

They were initially introduced in London in the 1960s after Kennedy placed additional taxes on Americans holding corporate bonds in a foreign currency. Therefore the Euro bond was introduced so that foreign companies could raise capital from Americans investors without them incurring additional taxes. Now they are used by corporations to raise capital denominated in any currency.

Re: the Scottish independence issue
 

Bonds had to pay net (if issued in the US), with withholding of tax to be sent to the IRS. Bonds issued in London (outside of the US) could pay gross interest. And so that put London on track to become the world's leading financial center despite the loss of the British Empire.

Re: the Scottish independence issue
 

Handy table at the botom of this page from the SNP white paper:

Scotland's Future

Re: the Scottish independence issue
 

Yes, the Scottish side at least.

Re: the Scottish independence issue
 

It feels very strange to think I could soon be a Scottish citizen.

Re: the Scottish independence issue
 

2 threads on the subject,3000 posts including a couple from myself.

We swing to and thro, on financial points, political independence points, Regulations and laws closer to home.
Forget all of them, if the Scots feel they want to go their own way after 300years, a chance to
be answerable for their own future and destiny, mysteries and excitement of a new start. ........Basta, fullstop, go no further. That alone is enough to finish any argument.
Financially, Politically,employment, education enviroment in cities and country for the Mr n Mrs average Scot, in my opinion, really havent got anything to lose.
I have argued against the yes vote, the whitepaper, going it alone, then it hit me, I aint a Scot, rebellious, yes, but no Scottish past or emotions, but if I was/had Would I, if given the chance.
....You bet I bloody would!! , being part of change, with a possibilty of making a small success of it.
What can you lose, how catastrophic would part failure be , would my life change dramatically.