Currency: Asset or assethole? You decide!

FIRSTMINSTER Salmond and, by definition, the Nationalists, consistently refer to currency as an “asset”. They argue that the sterling currency is as much an asset of Scotland’s as it is of England’s and rUK. It’s why their argument of ‘deny us our assets and we’ll ignore our liabilities’ (debts) holds such resonance for the indy committed. Unionists, as would be expected, say that currency isn’t an asset. So what is it? AhDinnaeKen disnae ken:

"The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy." - Sun Tzu.  Looks like Salmond will be waiting for a while.

“The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy.” – Sun Tzu.  Looks like Salmond failed at the first.

By Izzit Tangible

ON YESTERDAY’S BBC Marr show, Firstminster Salmond said “if you claim ownership of all of the United Kingdom assets like the Bank of England and the currency then you end up with all the liabilities!”

A clear threat that an indy Scotland under the Firstminster’s rule would default on its debt should it be denied a currency union with rUK.

His statement also begged the question, just who is the bully, bluffer and blusterer and is currency an asset?

Here’s what AhDinnaeKen’s extensive investigations found ie we* trawled the internet.

In 2001, Kathy Mann, Director of the Office of the Fiduciary Advisor at State Street Global Advisors concluded:

“However for all intents and purposes, active currency has zero correlation to the major equity and fixed income asset classes.”

That’s a naw. It isnae an asset.

The website ETF.com (Electronically Traded Funds) opens an article entitled ‘Currency: The Overlooked Asset Class’ like this:

“International currency is the largest and most liquid asset class in the world.”

That’s an uncontestable aye. It is an asset.

The implication by ‘The Bankwatch’ is clear here:

“I think there is a lot of confused thinking about Bitcoin.  I believe today it is an asset and not a currency.  That view is supported by first Germany, and now Norway.”

It strongly implies currency is not an asset.

And then there’s an overall balanced argument as put forward here by Advisor.ca:

“On the one hand, there are those who argue that currency is either its own asset class or a subset of alternative asset class, giving it a place in modern portfolio theory.

“In the other camp are the traditionalists who say currency has no inherent value, and as a result is not an asset class in the same way stocks and bonds are.”

The conclusion is clear. Nobody, not even the experts in the field, knows for sure.

In Firstminster Salmond’s case, it comes down to that old faithful of committed indy supporters – trust.

If you trust Salmond, currency is an asset.

If you don’t trust him, it’s not.

If you neither trust him nor distrust him, then it’s mebbe’s it is, mebbe’s it isnae.

The whole argument is moot though.

And it’s ever so slightly offset by the fact that the Tories, the Lib-Dems and the Labouring party aren’t prepared to have a currency union whether it’s an asset or an intangible or a barrel of Brent sweet.

As if it needs repeated, the currency union rejection by the indy opposition has effectively sunk the Yes campaign.

The Nationalists present campaign strategy is of manning the lifeboats and seeing how many survivors they can muster before the whole ship ignobly sinks.

Yesterday’s attack on Andrew Marr by the Firstminster is symptomatic of that contingency strategy.

He knows he’s lost, it’s just a matter of regrouping and re-enthusing the faithful for yet aother push later on – no doubt with a different leader.

And, of course, culprits such as the BBC will always be there to take the blame due to their intangible bias and bullying.

Because that’s the only way right minded people would consider any other alternative than voting Yes. Right kids?

Gie’s a len o’ a poun mister!

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5 Comments

Filed under Economy, Referendum

5 responses to “Currency: Asset or assethole? You decide!

  1. Alec

    His statement also begged the question, just who is the bully, bluffer and blusterer?

    Aaaargh! That’s not question begging!

    But, yes, if Westminster/Whitehall claim ownership of Ster£ing then they also accept liabilities for the national debt as they already have done.

    It doesn’t look good for a wannabe leader of an independent Scotland casually to threaten to renege on debt. The warm glow of satisfaction at giving the nasty English the two-fingered Viking salute would last one calendar month before the international creditors pulled the rug from under him.

    And this man is an economist???

    ~alec

    • Aaaargh! That’s not question begging!

      Yeah. Never got the chance to proof read before I had to leave. Have slightly amended.

      Salmond’s premise about the alleged inevitability of Currency Union in the event of a Yes vote is predicated on currency being an asset. If it is an asset, his logic, for the Nationalists at least, is sound.

      It’s why the Nationalists constantly repeat the mantra that currency is an asset. If it isn’t, then what reason other than bluff bluster etc does he have to threaten to renege on debt.

      Like everything else Salmond does these days, it’s disingenuous and stretches his credibility far too thinly.

      Regards

  2. Stuart

    In reply to Alec, I’m simply astonished that the SNP keep running around shouting ‘default’, as you say he is an economist who worked for a bank so he is not unaware of the import of repeating that word.

    However I’m baffled as to why the SNP did not get the currency issue nailed down right at the start, and why they persist in flogging the dead horse of a currency union.

    The only answer I can think of is that the SNP are not a normal political party, they are more akin to a religious cult.

    Wee Eck has promised them that the spaceships will turn up on September the 19th, and take them off to their new utopia.

    Now like all true believers, they have no choice, but to silence dissent, and believe fervently that it WILL happen.

    Hence their refulsal to acknowledge reality, or that that are consequences to their actions…

  3. Will

    It is worth linking to this article as well: http://notesfromnorthbritain.wordpress.com/2014/01/28/the-hidden-costs-of-independence/

    The argument being that the pound is neither an asset or liability – it is an institution (as part of the Bank of England) which is controlled by the UK state. Scotland would be voting to leave the UK, and thus leaves the institutions.

    I would expect there would be some debate and negotiation over what is an institution and what is asset/liability, but I sure wouldn’t want to be on the negotiation team if the opening moves are “No currency union” – “We’ll take no share of the national debt”.

    I also wouldn’t want to be in a country that is massively in deficit with no lender of last resort.

  4. The SNP say “if you claim ownership of all of the United Kingdom assets like the Bank of England and the currency then you end up with all the liabilities!”

    All assets?

    Does that include oil?

    Are the SNP really contemplating giving up Scotland’s share of oil?

    I think we should be told…

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