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Could Scotland end the low interest rates?


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Sturgeon has just been on Prescott talking about the Covid vaccination. Prescott pointed out to her that the British exchequer had paid all the Covid bills. Sturgeon pointed out, quite correctly, that it was in fact borrowed money. She went on to say that Scotland was not currently empowered to do it's own borrowing.

Now suppose that Scotland got independence. If we further assume that whoever is in Westminster at that point has the normal compliment if testicles as opposed to the normal politician's compliment, Scotland would have to pay it's own bills. Scotland, being a bit skint and not having much to sell would need to borrow. If someone wants or needs to borrow the interest rate will be higher for a risky borrower than for a borrower with  top credit rating. Therefore, Scotland would be paying a comparitivly high rate if interest. As some speculative money would follow the higher interest rate, would that push up interest rates for other borrowers? Could that end the current low interest rate norm?

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1 hour ago, Rare Bear said:

Sturgeon has just been on Prescott talking about the Covid vaccination. Prescott pointed out to her that the British exchequer had paid all the Covid bills. Sturgeon pointed out, quite correctly, that it was in fact borrowed money. She went on to say that Scotland was not currently empowered to do it's own borrowing.

Now suppose that Scotland got independence. If we further assume that whoever is in Westminster at that point has the normal compliment if testicles as opposed to the normal politician's compliment, Scotland would have to pay it's own bills. Scotland, being a bit skint and not having much to sell would need to borrow. If someone wants or needs to borrow the interest rate will be higher for a risky borrower than for a borrower with  top credit rating. Therefore, Scotland would be paying a comparitivly high rate if interest. As some speculative money would follow the higher interest rate, would that push up interest rates for other borrowers? Could that end the current low interest rate norm?

Only to the extent that German interest rates were forced up when UK interest rates increased to 15% ;)

On the face of it the UK might well be more credit-worthy after Scexit.

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14 minutes ago, deathfunk said:

I'm fine with Scotland declaring independence if that's what the majority there want to do. But they must take on their proportion of the UK debt when they leave - maybe 8% of £2 trillion. Then they can raise as much debt as they want on top of that. Good luck to them.

Nope.  Same as the EU - I think those that want to stay in the club shoulder the burden, as in many cases those debts are just to keep paying the huge interest and debt costs run up to benefit the troughers in the adminstrations.

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1 minute ago, wherebee said:

Nope.  Same as the EU - I think those that want to stay in the club shoulder the burden, as in many cases those debts are just to keep paying the huge interest and debt costs run up to benefit the troughers in the adminstrations.

Sure, but Scotland will hardly be able to refund to "the club" all the infrastructure and social spending they have received through debt spending will they. 

9_9

So, instead, they can take their 8% of the debt.

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2 minutes ago, deathfunk said:

Sure, but Scotland will hardly be able to refund to "the club" all the infrastructure and social spending they have received through debt spending will they. 

9_9

So, instead, they can take their 8% of the debt.

Nope.  In my view it's a fair tax on London and the SE being a cunt for 100 years.  And I was a Londoner.

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1 hour ago, wherebee said:

Nope.  Same as the EU - I think those that want to stay in the club shoulder the burden, as in many cases those debts are just to keep paying the huge interest and debt costs run up to benefit the troughers in the adminstrations.

This isn’t remotely comparable to the UK leaving the EU, it’s immeasurably more complicated. Even if it was comparable, there are plenty of Scots troughers too.

The Scots have already had all the vengeance anyone should need by inflicting the curse of Brown, the ruiner of nations - the pity being for them that the consequences of his existence were also visited on them, but to a far lesser degree than England. 

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1 hour ago, wherebee said:

Nope.  Same as the EU - I think those that want to stay in the club shoulder the burden,

Not quite sure what point you’re making there..  we are paying our share of the EU debt,  what do you think the withdrawal agreement was all about? And that’s despite the fact that we’ve been a net contributor to the EU,  unlike Scotland to the UK.

Why wouldn’t the Scots pay their share? They’ve certainly received more than their fair share of it per head of capita.

Edited by Libspero
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11 hours ago, Lightly Toasted said:

Only to the extent that German interest rates were forced up when UK interest rates increased to 15% ;)

On the face of it the UK might well be more credit-worthy after Scexit.

It would definitely be more creditworthy; ditto if NI or Wales left.

They all have higher public spending and lower tax return per capita than the UK so without them the budget deficit would fall and might even reverse.

That's factual.

I don't however wish to see the break up of the union so for me it is a moot point.

Your average worker in Scotland, NI and Wales isn't benefitting from this largesse though; it's all going on public sector salaries and the bennies mob. 

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2 minutes ago, Dave Bloke said:

Maybe England should leave the union leaving the remaining countries with the two trillion debt

I almost posted this but didn't because I figured I would end up in a dumb ass semantic argument. I think the argument is the money system and centralisation is all London's fault therefore the debt is all theirs. There is truth in this, but it spectacularly fails to recognise the very real infrastructure and social spending that occurred concurrently with the debt fuckery.

So, tough luck, you still need to pay for that.

Of course when Scotland are independent they will be free to issue a positive sovereign currency which does not rely on perpetual growth. The 8% will hardly be a problem then. A few million bitcoin or DeFI tokens would wipe that out in short order once they reset.

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10 hours ago, deathfunk said:

I'm fine with Scotland declaring independence if that's what the majority there want to do. But they must take on their proportion of the UK debt when they leave - maybe 8% of £2 trillion. Then they can raise as much debt as they want on top of that. Good luck to them.

And accept a hard border with England if they later join the EU.

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1 minute ago, deathfunk said:

I almost posted this but didn't because I figured I would end up in a dumb ass semantic argument. I think the argument is the money system and centralisation is all London's fault therefore the debt is all theirs. There is truth in this, but it spectacularly fails to recognise the very real infrastructure and social spending that occurred concurrently with the debt fuckery.

So, tough luck, you still need to pay for that.

Of course when Scotland are independent they will be free to issue a positive sovereign currency which does not rely on perpetual growth. The 8% will hardly be a problem then. A few million bitcoin or DeFI tokens would wipe that out in short order once they reset.

Yes, they could establish a rock-solid and as-fair-as-possible political constitution Swiss-style, and issue a hard-currency rival to the CHF, let's say the Scottish Franc, with it written into the constitution that political actions that will debase the currency are illegal. Within 20 years they could pay off any debts in the shitty Northern Lira sorry the GBP, as investments would rush into Scotland if they were wise enough.

But of course they wouldn't - with Sturgeon and co in charge it would be the opposite, the Scottish peso, more Argentine-style than Swiss-style.

 

 

 

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1 minute ago, swiss_democracy_for_all said:

Yes, they could establish a rock-solid and as-fair-as-possible political constitution Swiss-style, and issue a hard-currency rival to the CHF, let's say the Scottish Franc, with it written into the constitution that political actions that will debase the currency are illegal. Within 20 years they could pay off any debts in the shitty Northern Lira sorry the GBP, as investments would rush into Scotland if they were wise enough.

But of course they wouldn't - with Sturgeon and co in charge it would be the opposite, the Scottish peso, more Argentine-style than Swiss-style.

It could be done as long as the general population were willing to give up their debt-welfare freebies and work/train/invest instead.

So that's a non-starter, then :D

You can't change a UK-style welfare economy into a productive Swiss-type economy without breaking a hell of a lot of eggs. You're right to suggest that Sturgeon & Co wouldn't even try, but my belief is that any government that did try, would not survive the ensuing riots.

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10 hours ago, Democorruptcy said:

Like last time, the Scottish public sector wouldn't vote for independence. It would be like a turkey voting for Christmas.

I don't recall the Unionists making a big deal about that last time. The question "in what currency will independent Scotland pay its public sector salaries and pensions?" (as opposed to simply what currency would be used for transactions) would have concentrated minds. Of course the Nats will answer "it's our pound too!" and say they'll continue to make sterling payments, the question will be whether people believe them.

Edited by Lightly Toasted
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On 03/12/2020 at 01:59, deathfunk said:

I'm fine with Scotland declaring independence if that's what the majority there want to do. But they must take on their proportion of the UK debt when they leave - maybe 8% of £2 trillion. Then they can raise as much debt as they want on top of that. Good luck to them.

Taking a share of the debt will be conditional on an agreement being reached between Scotland and remainder UK.
Taking the same size share of the assets in the Bank of England would seem an obvious precondition for this.
Scotland would start off on a fairly equal footing with regard to its ability to raise debt then.

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7 hours ago, Lightly Toasted said:

I don't recall the Unionists making a big deal about that last time. The question "in what currency will independent Scotland pay its public sector salaries and pensions?" (as opposed to simply what currency would be used for transactions) would have concentrated minds. Of course the Nats will answer "it's our pound too!" and say they'll continue to make sterling payments, the question will be whether people believe them.

As someone pointed out over on the lumpy mattress thread, anyone can use any currency that they like. They just have to earn it first.

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19 hours ago, Lightly Toasted said:

It could be done as long as the general population were willing to give up their debt-welfare freebies and work/train/invest instead.

So that's a non-starter, then :D

You can't change a UK-style welfare economy into a productive Swiss-type economy without breaking a hell of a lot of eggs. You're right to suggest that Sturgeon & Co wouldn't even try, but my belief is that any government that did try, would not survive the ensuing riots.

I would have thought that if there was enough will with some new Scottish political leaders (obviously not wee Krankie and her idiots), they could cut deals with a Labour administration in England and export all the freebie-hunters to England, have them all housed in swing constituencies where a few extra Labour votes would mean victory. Organise the local Labour admins to round up their votes by post at every election, US and Peterborough-style, job done.

 

There are a lot of inventive and motivated people in Scotland, if they got rid of their neds and stupid chips on shoulders it could be a tremendous place (albeit still a vile climate) and would thrive IMO outside of the union. But under Krankie or similar it'd be a freezing shithole in no time.

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