Interesting Links for 29-02-2012

[andrewducker]

• India is having a bumpy journey towards legalising homosexual relationships
  (tags: lgbt india )
• Cineworld installing vibrating seats. Would go well with porn, methinks.
  (tags: movies technology )
• Is this the most biased opinion poll question ever asked?
  (tags: lgbt polls opinion bias )
• The Great Ticket Scandal - many concert tickets go directly to resellers for a huge markup bypassing fans entirely
  (tags: music concerts fraud business )
• On Scotland being forced to join the Euro (it can't be)
  (tags: europe euro money scotland independence )
• EU law will not allow Scotland to be excluded just because it's not part of the UK any more.
  (tags: europe eu scotland independence )
• Who owns The Bank Of England?
  (tags: uk scotland banking indepdence )
• A chance in a generation to modernise the Lords
  (tags: uk politics democracy )
• Key SOPA/PIPA Post Censored By Bogus DMCA Takedown Notice
  (tags: censorship copyright law usa )
• Can Scotland be independent and keep sterling?
  Personally, I'm actually leaning towards having our unique currency. I suspect we'd drop by a bit, making us more competitive.
  (tags: currency money uk scotland independence )
• Men and women respond differently to stress
  (tags: stress gender psychology )
• KLM links Facebook to seat booking, making it even easier to sit next to tall blondes. Hurrah for in-air stalking!
  (tags: airplanes facebook socialnetworking )
• Against Big Bird, The Gods Themselves Contend In Vain
  (tags: religion egypt muppets )
• Labour set to back Lords Reform
  (tags: lords politics democracy uk )

Comments

[philmophlegm.livejournal.com]

I absolutely think that an independent Scotland should have its own freely-floating currency.

Shared currencies and fixed currencies work when economic conditions are pretty much the same in the two economies, or when one economy is so small and so dependent upon the larger economy that lots of transactions would be carried out in the larger country's currency anyway.*

So would Scotland and England/Wales/Ulster be closely related economies with very similar conditions? Maybe at first, but after a few years of different tax policies and perhaps more importantly, oil price changes, they really wouldn't.


* Which is why some tiny Pacific Islands use the US dollar.

[andrewducker]

Yup. The main disadvantages would be conversion costs for trade between England and Scotland, and whether the financial companies currently based in Scotland would relocate to England (as most of their business is done in pounds and their business is largely uk-wide).

If we want to be export-led and manufacturing heavy then I think the gains of our own currency would outweigh that. If we want to be finance heavy then I just don't know.

[iainjcoleman.livejournal.com]

Another problem (if I understand correctly) would be for the many people in Scotland who have a mortgage in Sterling with an England-based bank. If they all start getting their salaries in Scots Pounds, and the Scots Pound falls against sterling, they could be in trouble

[philmophlegm.livejournal.com]

That doesn't strike me as insurmountable. Surely the English/Welsh/Ulster banks could simply set up Scottish subsidiaries and transfer the mortgage books of Scottish borrowers to those subsidiaries. Then MacBarclays (or whatever) would operate in much the same way that Abbey National operates now that it's part of Santander.

[andrewducker]

Or just do mortgages in Groats. It's not that hard* to have different accounts do different currencies.


*Ok, yes, probably a few million in setup costs if you're not already doing them in pounds, euros, dollars, etc.

[danieldwilliam.livejournal.com]

Except that the lending banks have probably borrowed in Sterling.

Somewhere in here somebody has a currency exposure.

[a-pawson.livejournal.com]

True but very few mortgages run the full term nowadays. It is very easy to change mortgage providers, and many people do every few years.

And we're not talking about setting up a currency overnight. It will take at least 5 years from any referendum to actual independence, and probably a good few more years to setup a new currency so there will be plenty of time for banks and individuals to sort themselves out.

[danieldwilliam.livejournal.com]

This is true - plenty of time for everyone to adjust and I think you're right, most will.

I wonder aloud tho - if I were selling a house, with a mortgage in sterling if I'd want to be paid in sterling and not take a currency risk on the transaction. Maybe.

[a-pawson.livejournal.com]

Absolutely, there will be some currency risk which someone will have to bear. It will almost certainly fall onto the borrower - the banks are not daft enough to let it fall the other way around.

[octopoid-horror.livejournal.com]

If there were specifically English and Scottish banks who treated the other country as being as foreign as mainly Europe, this would be very bad. It can be very expensive/difficult for customers in the UK to have foreign currency bank accounts. And if you don't have a foreign currency bank accounts, making/getting payments in currency can involve unpleasant charges.

I was going to have to pay a charge of approximately four times the amount that I actually wanted to pay in order to pay a small cancellation charge for a German hotel booking until I managed to get my Dad (who lives in France) to pay it for me from his Euro-denominated account there.

[danieldwilliam.livejournal.com]

I think the time taken for the two economies to disentangle might be quite long.

Some 60% of Scotland’s exports are to the rest of the Sterling zone. There is a lot of cross ownership of businesses.

There are inter-family transfers. Labour mobility between the the Sterling zone is likely to remain high with no language barriers, a similar culture and just general familiarity.

I’d like to see an independent Scotland hold on to Sterling for a few years and then set up the Groat, pegged to Sterling for a few years then free floating – then we can make a decision about the Euro (if it still exists as a single currency.