I concluded:
1] The BBC is still
struggling to get the Osborne/ currency story neatly summarised & accurately presented;
2] Commenting on complex matters such as international
currency transactions requires no background [ or for that matter foreground ]
knowledge at all, whether in the print or broadcast media , and on Twitter –
although that goes without saying . And
of course, really sophisticated currency
analysis is demonstrated by referring to
the Chancellor of the Exchequer as ‘Gideon’ – e.g. Ian
Macwhirter .
3] And currencies come and go – essentially against each
other or a basket of others .
1] The BBC , and those who take their cue from BBC broadcasts,
still struggle to distinguish between a formal currency union; the
formal following of a larger currency stream by the authorities of another country ,
sometimes referred to as dollarization , and
the informal usage of more than one currency by businesses and citizens .
Really , the BBC in particular
should get a clear line on the difference ‘using the pound ‘ and ‘currency
union’ and stick to it .
2] I don’t claim expertise in currency matters but I do have
some interesting direct experience in several settings where currency
matters are wee bit more complex than exchanging £ > $ or £ > €.
For professional reasons I’ve found myself over the years in
Mozambique ; Romania; Hong Kong ; the PRC ; India and a few other countries
where either exchange rates change in a
quite turbulent manner, or for
other reasons people prefer to use more than one currency.
That’s led me to develop a clear view on what I do when I
travel long distance, and I also give the same advice to anyone who
asks me . These guidelines
illustrate some key currency issues .
-
If you leave the UK as well as Scotland , then always take £ Sterling .
I’ve never had RBoS ; BoS or Clydesdale notes turned down in London but if I am
in Singapore or wherever, I prefer to be cautious. I can even advise you on
Edinburgh city centre ATMs that dispense £ Sterling and usually have short queues.
-
Always take some small $ bills . Funnily enough even
in countries where the US [govt.] is routinely damned , a $ or more will get you a cab ; to the front of the queue ; and discounts unavailable in the local currency .
-
Always keep some multi- currency cash on you . I have
been in cities where cash machines have
shut down in a sudden flurry and it can
be scary; having notes to hand reassures
.
I have my Metical coin – actually several of them – from a
period when I spent time in Mozambique. At that point the currency traded at
approximately 11000 to the dollar and
16000 to the pound . In Southern parts
of the country then – and I gather now – the tradable currencies were the Metical ; the Rand ; the £ and the $.
Imagine a hotel reception screen where your rooms are
denominated in 4 different currencies, and the same in some shops . Of course
the consequence of this is, as with doing unwritten calculations against
regular darts players , or calculating
odds against regular gamblers; all the
locals can out-arbitrage you in a flash. My recollection is that for me as a visitor it was a tedious boring exercise , but with curious amusing
aspects . In Maputo , it was necessary to make quick rough calculations on what
currency to buy in – and what to get
change in . In contrast , in Beira – for
quite incomprehensible reasons – I was escorted to a bank by a hotel guard [
and that’s what they were called, not porters or any such nonsense ] to change
my dollars into Meticais [think spelling is correct ] . I actually did carry
them back in a plastic bag and settled the bill, still puzzled, and also
noticed someone settling a bill in Zimbabwean $ - so that tells you it was a
good while ago.
Even in more settled and stable societies currency games can
come at a cost . Some of the most
damaging aspects of the economy/ currency
turmoil of recent years were from
the amateur ‘carry trade’ that grew up in countries such as Iceland and
Hungary . In the former many mortgages
were Yen related ; in the latter , a substantial proportion of personal
mortgages in Swiss Francs [ the William Tell legacy I guess ] – in both cases
the outcomes were not happy or people or the economy.
3] It seems
indisputable to me that even without agreement on a currency union
between a possibly independent Scotland and the RofUK, people living here in Scotland could use the £ .
That is always a
possibility. However, as well as the
day-to-day hassles that can arise ,
there are big downsides to any such arrangements, whether formal or informal . But you can
read others , better
qualified on those aspects .
And on the downside for me ?
Well my Metical coins were voided at the end of 2012 but they’re a nice
souvenir .
And the possible upside for those who can afford it ?
Although not authorised to give investment advice , I have been saying the same
for 2 or 3 years now: ‘ Buy rental properties in Berwick….. ‘
@Richardkerley
