Fiscal Ignorance should not be allowed to cloud the argument Further to Kate Devlin's article on the Scottish budget veto, the amount of ignorance on the subject of national fiscal and monetary matters - extending right up to the top level of the UK Government - is quite staggering ("Scots budget veto threat to Bank of England plan", The Herald, January 28). On the subject of currency and central banks firstly, Hong Kong has never had a central bank and their private banks - which are well capitalised because there is no HK lender of last resort - clear bank credit "real time", and issue bank notes. The Hong Kong Monetary Authority maintains monetary stability with a peg to the US dollar and a currency board backed by substantial assets, including significant capture of land rental value. The fact HK people do not have both landlord and government monkeys on their shoulders to the same extent as we do is undoubtedly a competitive advantage for that entrepreneurial territory. Another approach is that of Ecuador, which is one of several countries which choose to use the US dollar as their currency but without intrusion from the US. While this does cause problems, they have been working on a very interesting idea whereby Ecuadorean businesses may access credit for working capital simply by discounting VAT invoices directly with the central bank. With such a credit clearing system, goods and services will change hands not in exchange for US dollars sourced from the US, but by reference to the US dollar purely as a standard unit of account or benchmark. Those are a couple of examples of more or less conventional possibilities. I advocate a simple but radical 21st-century version of the sovereign credit model which pre-dated modern central banking. Scotland could turn back the clock to 1693 when the then privately owned Bank of England first privatised public credit. Sovereigns had for some 500 years funded public expenditure through issuing stock, which was simply undated credits or IOUs given to creditors in exchange for value received, and returnable in payment of taxes. The origins of the phrases "stock" and "rate of return" - which referred to the rate at which stock could be returned to the exchequer for cancellation against tax obligations - have long since been airbrushed from economic history as an inconvenient truth. I advocate a new approach to stock creation and issuance, perhaps through basing professionally managed public credit issuance on taxation; or on Scottish land rental values, as proposed by John Law in 1705; or on the value of Scottish energy production; or even all of these. I am sure Messrs Salmond and Swinney and their team could easily achieve monetary independence in this way. etc etc
Further to Kate Devlin's article on the Scottish budget veto, the amount of ignorance on the subject of national fiscal and monetary matters - extending right up to the top level of the UK Government - is quite staggering ("Scots budget veto threat to Bank of England plan", The Herald, January 28).
On the subject of currency and central banks firstly, Hong Kong has never had a central bank and their private banks - which are well capitalised because there is no HK lender of last resort - clear bank credit "real time", and issue bank notes. The Hong Kong Monetary Authority maintains monetary stability with a peg to the US dollar and a currency board backed by substantial assets, including significant capture of land rental value. The fact HK people do not have both landlord and government monkeys on their shoulders to the same extent as we do is undoubtedly a competitive advantage for that entrepreneurial territory.
Another approach is that of Ecuador, which is one of several countries which choose to use the US dollar as their currency but without intrusion from the US. While this does cause problems, they have been working on a very interesting idea whereby Ecuadorean businesses may access credit for working capital simply by discounting VAT invoices directly with the central bank. With such a credit clearing system, goods and services will change hands not in exchange for US dollars sourced from the US, but by reference to the US dollar purely as a standard unit of account or benchmark.
Those are a couple of examples of more or less conventional possibilities.
I advocate a simple but radical 21st-century version of the sovereign credit model which pre-dated modern central banking. Scotland could turn back the clock to 1693 when the then privately owned Bank of England first privatised public credit.
Sovereigns had for some 500 years funded public expenditure through issuing stock, which was simply undated credits or IOUs given to creditors in exchange for value received, and returnable in payment of taxes. The origins of the phrases "stock" and "rate of return" - which referred to the rate at which stock could be returned to the exchequer for cancellation against tax obligations - have long since been airbrushed from economic history as an inconvenient truth.
I advocate a new approach to stock creation and issuance, perhaps through basing professionally managed public credit issuance on taxation; or on Scottish land rental values, as proposed by John Law in 1705; or on the value of Scottish energy production; or even all of these.
I am sure Messrs Salmond and Swinney and their team could easily achieve monetary independence in this way.
etc etc
The polling runes seem unclear on the desire of Scots for full independence - but it's so important that they make the decision knowing that they can make it work if they want to - despite the blasts of propaganda from various quarters suggesting the contrary.
