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Gives an analysis of possible consequences of Scots independence..
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This would be set against an Independent Scotland that had just defaulted on its debts and so would only be allowed to borrow against the mortgaging of its assets that the SNP crows so loudly about such as Scotland's £1.5 trillion of North Sea oil reserves whilst conveniently forgetting that it would probably cost near £1 trillion to extract it! So Scotland would forward sell decades of future oil revenues to foreigners in exchange for the financing of current deficits (voter bribes).
Rather than admit to reality, Alex Salmond and the SNP inhabit a fantasy land where post debt default they expect Scottish interest rates to be lower than the UK whilst the example of Ireland which DID take on its fair share of UK debt and which was GUARANTEED by the UK government, nevertheless saw far higher interest rates than the UK right upto the point a decade after Independence Ireland defaulted on its debts owed to to the UK which saw interest rates soar. To which Britain responded by imposing trade tariffs to recoup the monies defaulted upon just as the UK would do today should Scotland default on its debts that resulted in an Irish economic depression, something that Ireland would not fully recover from for over half a century and which contributed towards half its population fleeing the Island. And soon as there was a glimmer of hope for Ireland along came the Euro-zone debt crisis and PIIGS bankruptcy resulting in Ireland effectively being managed from Germany that included a partial bailed from the UK. So Ireland effectively gave up being a significant partner in the UK to become a pin prick in the Euro-zone, all for the sake of religion.
And what of Scottish banks? A financial sector that would be twice the size relative to the Scottish economy than were that of Iceland, Cyprus or Greece! Would anyone keep a single penny in a Scottish bank if they knew that it was impossible for Scotland to ever make good on bank deposit guarantees? That during a financial crisis their bank deposits would be stolen Cyprus style.
Whilst England (UK) economy would be boosted by Britains deficit effectively being cut by at least £8 billion per year (14 Feb 2014 - SNP Independent Scotland Sterling Sharing Trojan Horse to Plunder British Pound ) as a consequence of England no longer having to bribe Scotland to stay in the Union with a net subsidy of £8 billion per year which therefore in terms of the deficit forecast would result in an additional reduction of the deficit by £40 billion over the next 5 years.
This translates into the impact of Scotland's £120billion debt default effectively being cleared within 15 years, so there would be no lasting damage to the UK in terms of taking on the extra debt burden. Not only that but the markets would discount the future, they would be discounting the continuing positive impact if a reduced budget deficit and thus better fiscal outlook for the UK for many decades to come which would translate into lower long-term UK interest rates.
UK ECONOMY
As mentioned earlier the loss of Scotland's 8% of GDP annual economic output would result in the national debt burden rising to 85%. However, as also mentioned that savings of £8 billion of year in subsidy would clear the extra debt within 15 years.
However, actual GDP loss could be recouped far sooner as my forecast is for the UK to grow by over 3% per annum over the coming years., therefore the loss of 8% of GDP could be recouped within 3 years. In economic terms it would be as though Scotland had never been part of the UK.
30 Dec 2013 - UK House Prices Forecast 2014 to 2018, The Debt Fuelled Election Boom
Therefore in terms of my economic growth conclusion, I expect the UK economy to at least attain a growth rate of 3.6% for 2014 and target 3.8% for Q1 2015 with a strong possibility of achieving the holy grail for election victories of announcing during the election campaign of 2015 that the UK economy at that time was growing at 4% per annum. Furthermore post election I expect that an over heating UK economy to slow as it dips back towards 3% over subsequent quarters of 2015.
Therefore in terms of economy and financial stability the UK would actually be far BETTER off without Scotland.
UK POPULATION
The SNP tend to be quick to state that many Scots have achieved great things, without mentioning the fact that the great achievements tended to have been made OUTSIDE of Scotland. Many commentators suggest that the loss of population of 5 million would greatly diminish the UK in international terms, with suggestions for instance that the UK could lose its seat on the UN Security Council.
09 Jan 2014 - U.K. House Prices vs Supply, Immigration, Population Growth and Demographics Crisis
However, again as my earlier in depth analysis illustrates that the population growth rate for England is such that the loss of population could be recovered within 10 years, so that the total UK population would at least be where it was before Scottish Independence, and likely much earlier as several hundreds of thousands of British citizens (both Scots and English) north of the border would choose to migrate to a far more economically stable UK. Of course most of the people in England do not want further high immigration so the loss of population is less of a domestic issue than it would be North of the border that would experience an accelerated brain drain as its brightest and best migrate to the South of England that would be following the migration of Scotland's financial services industry, as financial sectors are built on only one thing - confidence, something a newly Independent debt defaulting Scotland would be greatly lacking.
Therefore Scottish independence would have very limited negative effect on the UK's economy and global standing, which is suggestive of it being an overall economic non event for the UK.
UKRAINE 2014, BRITAIN 2016?
The real problem of Scottish Independence is as I have highlighted several times in recent articles is that it would open up a pandora's box that would encourage other parts of the UK to start their own separatist movements which would disrupt economic activity right across the UK, and that is the real danger of Scotland leaving the UK, and not its net economic impact on the UK.
Ukraine illustrates what tends to happen when countries start to tear themselves apart as peaceful demonstrations in Ukraine's capital city Kiev of barely a few weeks ago have fast descended into chaos towards outright civil war as several regions in the north-west such as Lviv declare independence, whilst the south-east stands behind its democratically elected President who fled the capital with loyal security forces barely 24 hours ago.
What was unimaginable a few weeks ago has now become a crisis situation of mounting deaths, where with each death Ukraine takes a further step towards leaping over the edge of and into the abyss of where the likes of Syria stands today, as the consequence of what happens when nations rip themselves apart.
Ukraine tearing itself apart has huge implications for european stability as the conflict risks sparking unrest in bordering states most of which have their own separatist movements, especially Russia which therefore looks set to intervene militarily.
Independant Scotland Debt Flash Point
Alex Salmond's debt default threat statements are akin to someone borrowing money from the bank to build a house and then declaring that they did not owe the bank anything, by rights the bank could repossess the property, and similarly the UK could impose tariffs (just as took place following Irish Independence) or seize Scottish assets on paper to the tune of £120 billion, effectively freezing the assets and thus restricting their use and resale.
Of course such an action would be seen as outrageous by the Scottish people and flame the fires of conflict as it would sow much discontent between Scots and the 1/2 million settled English in Scotland, just as does the SNP's statements of not taking on the £120 billion of debt to people south of the border.
This is just one example of how the SNP and Independant Scotland would sow the seeds of conflict between North and South Britain.
The Balkanisation of Britain
Alex Salmond and his merry band of scottish nationalists quest for dominance over a small part of the Island of Britain have failed to calculate that they will no longer have Westminister to blame for this, that, or other latest socialist deficit spending induced crisis. Which implies that the first port of call for disintegration will likely be in Scotland itself, as a vote for Independence at best would only marginally carry more than 50% of the votes. Therefore the Scottish nationalist government would within a couple of years start to hear highly vocal demands from parts of Scotland to rejoin the United Kingdom, the refusal of which could trigger the start of civil conflict, which as we have seen in Ukraine and elsewhere that it does not take much for crisis to spiral out of control.
As for the rest of the UK, unfortunately Scotland attempting to tear itself away from the United Kingdom would set in motion a chain of events that would destabilise the whole Island of Britain as many separatist movements would be emboldened to exaggerate their own sense of injustice mostly based on semi-mythical histories and as remedy seek their own autonomous or even independent states, such as Wales, Cornwall, Mercia and off course heavily subsidised Northern Ireland.
Scottish independence would result in increasingly chaos across the Island, as growing civil unrest would spread as a contagion infecting many other regions of Britain.
The first consequences of the start of UK fragmentation would be in the economic arena as regions would seek to exert greater autonomy and thus increasingly implement differing rules and regulations that would disrupt economic activity that would further accelerate the breakup of the Union as regions would continuously become poorer thus blame others for their circumstances and see further separation as the solution.
The European Union fears this which is why senior EU politicians have been lining up one after another to state that contrary to SNP propaganda, an Independant Scotland would not be fast tracked into the EU, for they understand that just as a disintegrating Ukraine would destabilise the whole eastern european region so would a disintegrating UK destabilise many western EU nations such as Spain, France, Belgium and Italy all of whom have their own separatists movements.
It would be difficult, if not impossible, for Scotland to join the European Union - European commission president José Manuel Barroso
The bottom line is that Scottish Independence would open a Pandora's box that would result in a state of Britain that is far removed from the rose tinted glasses picture that the likes of the SNP are painting today, because the UK has always been MORE than the SUM of its parts. Therefore a fragmented UK will be far LESS in EVERY respects than that which the UK is today.
Last edited by: madf on Fri 23 May 14 at 21:42
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