IT is extremely encouraging to read the views from Dr Tim Rideout, Convener of the Scottish Currency Group, as he states in his letter (April 20) that policies of the state, not the banks, should be the target in Scotland’s future fiscal and monetary policies of an independent nation, and also then followed by the letter from Alex Thomson of Coldstream.
Independence for Scotland will mean a wonderful opportunity to update its currency obligations without being stifled by those of the UK, which has not the means or courage to deviate from its outdated currency policies that suit the conservative general attitude on running a country. Let’s not waste the opportunity.
The contents of these two writers’ opinions provide useful ammunition in dealing with the fear factor espoused by Westminster that currency will be a problem when Scotland becomes independent.
READ MORE: Banks have simply been responding to badly flawed policies of the state
The use of modern terms that are now becoming more frequent regarding fiscal management discussions mean that emerging and established countries are spreading the message to indicate that with the right knowledge and a break away from traditional fiscal policies will ensure that the mysteries of embedded traditional fiscal policies are blown apart.
On the same page of the National Conversation Alex Thomson writes about MMT, which stands for Modern Monetary Theory – and additionally the term “fiat money” – that is now becoming the vogue, all new to me.
Never heard of them? Neither had I. In my mind fiat was a motor car. A book I am currently reading has opened my eyes even though this aged brain is on its way out! A few pages read at night sends me off into a deep sleep as it is for me a heavy read. The Deficit Myth by Stephanie Kelton. Well worth a read.
I now realise that the fear factor espoused by the Westminster elite and media is a mistaken reality that they play on regarding opposition to an independent Scotland, hoping that we lack the knowledge to stand up for ourselves. Yes. We can start with a clean slate and hopefully the election on May 6 will be the start of a well overdue change in Scotland’s history, making a proper use of a competent, enthusiastic, skilful population that are eager to put their skills, knowledge and enthusiasm to use in a successful independent country.
My worry is that The National is the only independence-leaning medium out there and traditionally a lot of the population only read the likes of the Record, The Daily Mail, The Sun, et cetera who will not devote pages to this information to compete with the sensationalism that they like to feed many of their readers.
W D Mill Irving
Kilbirnie
IN his letter to on Tuesday, responding to the Scottish Banking & Finance Group article on April 19 (“Here’s a monopoly we don’t want in our new Scotland”), Tim Rideout asserts that the SBFG is attacking the wrong target. He concludes at the end of his letter that “reforming banks will achieve little on its own”.
It seems that Tim has completely misread the SBFG argument. We are saying that it is the banking and financial SYSTEM that needs to be reformed. This is what we said: “A monetary and currency system functions within a framework of institutions and law which governs how they interconnect and how they are managed. A ‘bankers’ currency’ is one in which the creation of money is delegated by the state to private commercial banks who create money in the form of credit. Decisions about the purposes that credit is provided for are left to these banks, although the degree of autonomy they may exercise can be constrained to some degree by rules and regulations.”
READ MORE: Here’s why an independent Scotland must take away the monopoly from private banks
This framework is shaped by the state – which is the same point Tim is making. The SBFG article is not advocating the reform of banks but of the banking and financial system, which is the environment in which banks operate. Banks will have to adapt to a new system or they will perish – that does not mean the inevitable extinction of privately owned commercial banks but it must mean their subservience to the needs of the economy and of the public.
The fact is that the banking and financial oligarchy has captured the institutions of the state and subverted our democracy and the terms of our discourse about economics and finance.
This is why a democratic written constitution is an essential part of what needs to be done to give Scottish independence a chance of success. Currency, constitution, and banking and financial reform are the three inter-linked and essential elements that must be dealt with.
Tim correctly identifies the mismatch between long-term bank assets and short-term liabilities. This is why banks go to the wholesale money markets to address the liquidity problem this creates. A redesign of the financial system needs to address this problem – the state has to step in to deal with this liquidity trap, whether it be caused by business lending or mortgage lending. If it is not dealt with then our banking system cannot be disentangled from global financial markets. One of the important lessons of the 2008 global financial crash is that the extent of integration between a domestic economy and global financial markets is THE critical factor in financial crisis contagion, regardless of whether the country has a balance of trade surplus.
Jim Osborne
Convenor, Scottish Banking & Finance Group
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel