Scotland just Isn't That Important.

On September the 18th (18/9/14) Scotland will vote on whether to become independent from the United Kingdom (UK). I don't get to vote in this referendum and quite frankly I quite simply don't have an opinion. However with all of the UK clearly under orders to hype this up as if it were the most important event in all of human history it has become rather hard to avoid. As such I should just take a moment to mention one aspect of the campaign that has really started to annoy me; The question of what currency and independent Scotland will use.

The UK has made it quite clear that an independent Scotland will not be allowed to join a currency union allowing it to use the British pound (Sterling) backed by the Bank on England. Rather childishly the Scottish nationalists have responded by saying that they intend to continuing using Sterling only with out permission. There is absolutely nothing to stop them doing this because Sterling is an internationally traded currency.

However without the ability to print their own bank notes an independent Scotland would be entirely reliant on exports for its supply of hard currency. The overwhelming majority of those exports will be paid for in either US dollars or Euros. Scotland will then have to convert those dollars and Euros into Sterling by buying it on the open market. This massive increase in demand for Sterling will push up its price meaning that Scotland will constantly be getting poorer as its dollars and Euros can only buy fewer and fewer Sterling. As a result if an independent Scotland were to go down this route of an unbacked currency they'd be much better off simply using the Euro or the US dollar.

So it must be said that the Scottish nationalists simply haven't thought any of this through.

(Originally Posted) 11:55 on 7/9/14 (UK date).