If the Euro, once again teetering on the brink, and the US stock market go belly up, Germany will remove itself from the EU, and gold will skyrocket because US owes Germany billions in gold bars they have squandered. The bond markets would collapse, and Switzerland would peg her Franc to the German Mark. Britain would need to follow Germany (but if she wants to be in a position to call the shots, in my view she should recognise the writing on the wall and precede Germany - so all power to UKIP I say!) and remove herself from a defunct EU as a result of the currency failure, and all talk of splitting up would cease for the sake of the survival of the City of London as the ONLY world commercial hub to replace Wall Street, provided she was able to reestablish her credentials as the only safe place to do business. Such would only be just feasible provided Britain retrenched and buried all notions of partition. Otherwise, we would face the very bleak alternative of a flag of convenience (like the notorious Liberian flag!) for world trade, and our identity as a British nation would be lost for ever. If only people could realise this and do something about preserving our very rich cultural heritage together and for Auld Lang Syne!
My comments were directed to David and were in praise of his wisdom, If I wanted to insult an individual you may be sure I would direct the insult directly at the target, a Scottish trait I have inherited from my forebears.
I appreciate your replies - as you say, John it should really just be a question of common sense which appears, sadly, to be lacking in all our leaders, and Cameron, in particular, seems not to have a clue, and he and his cronies are behaving childishly and unrealistically as would a red rag to a bull. Cameron, this is not about superiority and whipping the troublesome Scots into line. It is about Unity! Call yourself a Cameron? I suggest you read, mark, and inwardly digest our sage's immortal words talking about the lack of Union in the Act of so-called Union! as true today as they were some 250 odd years ago!
... and roused the freeborn Briton's soul of fire
No more thy England own!
remember this, England and Westminster, please! You are doing your fellow Scots a huge disservice by spitting in our face, and you could be instrumental in creating a schism none who call themselves Britons will ever recover from!
Cameron has withdrawn from the real world, his world is now the artificial reality of pseudo politics, in that respect he has joined the same shameful club as Ramsey McDonald and Neville Chamberlain where members of this "elite" actually believe the total b*llocks they speak.
The Scottish Government insists that Scots have paid more tax than UK tax payers if a geographic share of oil revenues is allocated to Scotland.
Hence, according to the Scottish Government "Scotland more than pays her way in the UK."
My opinion on SNP conclusions about Scotland paying her way is that they have omitted to bring spending into account when making their pronouncements .
By using Scottish Government data, that spending per person in Scotland has also been higher in each of the last 30 years than it has been across the UK as a whole. I have concluded, that the data suggest that "the greater tax receipts were invested for the people of Scotland, creating jobs and investing in public services. the Scottish people have received a significant dividend from North Sea oil revenues" I have recently revisited these data and can conclude not only has Scotland received a significant dividend from North Sea oil revenues, it has been almost fully compensated for these higher revenues by higher public spending.
When you analyse the numbers, over the 32 year period the total value of tax receipts is £1,425 billion while the total value of public spending in and for Scotland was £1,440 billion.
Spending was nearly £15 billion higher in Scotland than the tax receipts including a geographic share of oil revenues.
That amounts to additional spending over and above Scottish tax receipts of £89 per person per year.
So, it could be argued that the large oil revenues in the 1980s generated a surplus.
This was banked with the UK Treasury building up an oil fund that was then drawn on subsequently to meet Scotland's needs.
It might be argued that the gap between public spending and tax receipts was much greater in the UK than Scotland. This is correct.
In fact the amount of spending over tax receipts amounted to £644 per person per year. So, net English borrowing was implicitly greater than Scottish borrowing and some of that borrowing was in effect from Scotland. But it has been paid back.
However, a significant, argument against the present analysis is that the estimation of Scottish spending includes a population share of UK public borrowing costs, about 8.3%.
With a geographic share of oil revenues assigned to Scotland borrowing costs, at UK borrowing rates of interest, would have been much lower, or even zero, over the period.
For most of the period, the Scottish account would on this basis have been in surplus, as it built up an oil fund in the 1980's (banked with the UK Treasury) and drew it down to meet Scotland's needs.
It is possible to estimate using 19 years of Government Expenditure and Revenues Scotland (GERS) that Scotland's share of UK debt interest amounted to £83 billion at 2001-12 prices. Subtracting this from total estimated Scottish spend of £1,440 billion we get a debt interest adjusted estimate of spend of £1,357 billion. Total estimated tax revenues are £1,425 billion.
This means that Scotland was in overall surplus by about £68 billion.
To put this another way Scotland had returned to it from the UK treasury in spending for the Scottish people 95% of the tax revenues it generated.
I suppose I will hear some supporters of Scottish independence say "well that proves, Scotland can pay its way better than the rest of UK and would do better if independent."
But this would be a false analysis of this data.
Firstly, that was the past and actually Scotland did all right from its membership the Union over a period of 30 years.
Secondly, the future looks different as oil will not ever be at those levels again and production is expected to be negligible by the 2040s according to Kemp and Stephen'sestimates.
Thirdly, an independent Scotland would have to borrow to manage cash flow and keep spending at present levels.
There are two distinct problems with that assumption:
It might well be forced to pay higher interest rates. (the UK Government was easily able to borrow the money to fund the gap between spending and tax receipts), an independent Scotland would find borrowing more costly and far less easy on the money markets.
So long as the interest rate paid on Scottish borrowing is not penal it will not be critical. But Scottish government outlays would rise, by about £1 billion if a premium of only 1% above UK borrowing costs has to be paid by Scottish Government issued bonds.
That would mean a need for additional borrowing, or a diversion of spending from investment in the people of Scotland to pay Scottish Government Bond creditors.
Scotland couldn't keep borrowing to pay for spending in excess of its tax take – the money markets just wouldn't allow it, especially for a new state with no financial track record, and if dependent on the £ Sterling and with no central bank and dependent on the Bank of England as a funder of last resort.
Scotland has had the benefit of its oil fund without all the uncertainty that would have been caused in an independent Scotland due to the volatility of oil prices and production.
So, this analysis suggests that Scotland has already spent most, if not all, of its oil fund, while the possibility of creating such an oil fund in a future independent Scotland will be significantly less, unless there are major cutbacks in spending.
These calculations do not take account of the effects on Scotland in the UK, or as an independent Scotland, of a loss of funding of the Barnett formula.
An astute analysis, John, but Problem no 3 in my book outweighs the other two.
Truthfully, it matters not a jot if Scotland's books are clean, if she does not carry with her the confidence of America. Right now the latter is facing a debt crisis of monumental proportions, (not helped, I may add, by the violent winter storms afflicting their country and Europe and bringing many to a standstill!) which is why they are trying to bully Carney, thankfully so far without success, to tow the European line, because they are acutely aware of the present precariousness of fiscal stability there, and are fearful of the domino effect which could also send their precious dollar into a spin sending the Canadian dollar flying too! and all this while the Aussie, NZ dollar, and SA Rand have been hammered thanks to the fall in the gold price! The oil price too has dropped thanks to cheap oil from Mexico and Iran, making Scotland's oil reserves less profitable!
Forgive my cynicism, but Salmond's ruse to coincide Independence for Scotland with the 700th anniversary of Bannockburn could not have been more ill-timed if he'd tried!
For what it's worth I'll predict wild market swings in February. I have misgivings about April too! Later on, I'm not so sure... It is my belief that 2014 will be the year of the big crunch!