The Economic outlook for Scotland

setmefree2

The British pound has fallen to a 10-month low against the dollar following revelations that a pro-independence vote has taken the lead for the first time since the campaign began.
The GBP/USD has dropped below the 38.2% Fibonacci retracement of the one-year rally from last year July that came at 1.6280.
With the Moving Average Convergence Divergence (MACD) sharply below the zero line, the pair looks set for steeper falls. The immediate support line is the 50% level at 1.6000.
A break below the 1.6 mark will open doors to the 61.8% level at 1.5720 but 1.5965 may offer some support on the way. Further south, the levels to watch are 1.5400, 1.5100 and 1.5000 ahead of a retest of the July 2013 low of 1.4813.
On the higher side, the 1.6280 mark has turned a resistance and the next level is 1.6475 ahead of the 23.6% retracement of 1.6645. A break of that will weaken the downtrend and make further upsides easier.
The pair will then aim 1.6820 and 1.7000 ahead of a retest of this year's peak of 1.7192 touched in July.

setmefree2

On the Plus side

The oil price has fallen below $100 a barrel for the first time in 16 months, raising the prospect of cheaper prices at the pump.

Brent crude, the most closely-watched benchmark, hit $99.95 in trading on Monday morning, following disappointing Chinese economic data.

in_my_bumble_opinion

Why don't we just have one thread?

Mods?

setmefree2

Pound could drop 10% in value



http://www.theguardian.com/politics/2014/sep/07/scottish-independence-pound-drop-value

setmefree2

A win for Scottish nationalists may have “severe” consequences in the short term and spark a pound selloff, Goldman Sachs Group Inc. economist Kevin Daly said in a Bloomberg Television interview last week. BNP Paribas SA said a “Yes” vote would hurt U.K. government bonds and precipitate a credit-rating downgrade, while Standard Bank Plc’s head of Group-of-10 strategy Steve Barrow said it could push the pound down toward the mid-$1.50s.

http://www.bloomberg.com/news/2014-09-07/pound-in-peril-as-opinion-poll-puts-scottish-separatists-ahead.html

IveSeenTheLight

HAMISH_MCTAVISH wrote: »

http://www.economicsuk.com/blog/002045.html#more

Oil & Gas can only be seen as an asset, not a liability.

Why are we better together if we are so poor without this asset that other countries throughout the world would love?

It's time to grow up and be independent as "mummy" is not giving us the opportunity to become successfully independent. She'd rather we continue to rely on her.

setmefree2

IveSeenTheLight wrote: »

Oil & Gas can only be seen as an asset, not a liability.

Why are we better together if we are so poor without this asset that other countries throughout the world would love?

It's time to grow up and be independent as "mummy" is not giving us the opportunity to become successfully independent. She'd rather we continue to rely on her.

Why do you assume Scotland will get all the oil?

There is a school of thought that Scotland won't.

Scotland And Oil: Avoiding A Disastrous Precedent

In September the Scots will vote on secession. For decades, the key slogan of the Scottish Nationalist Party has been ‘Its Scotland’s oil’. Yet this claim has never been subject to serious scrutiny. I will argue that it is spurious: ethically, legally, and practically.

The philosopher of justice, John Rawls, grounded justice in those social rules agreed behind a ‘veil of ignorance’. Citizens should agree the rules prior to knowing where they would find themselves in society. Valuable natural resources such as oil and gas lend themselves perfectly to such an approach. Prior to discovery, a geological veil of ignorance enables societies to agree on just rules. Overwhelmingly, democratic societies agree that wherever oil is found it should belong equally to all citizens. There are strong reasons for doing so: it avoids a post-code lottery for ownership which would be unfair and risky.

This has certainly been the practice in Europe. Dutch gas belongs to all citizens, not to the region most proximate to the gas. Norwegian oil belongs to all Norwegians, not just to those closest to the oil. The United Kingdom followed the same practice of assigning ownership to the national government. As in the Netherlands and Norway, the process by which ownership rights were assigned was democratic and preceded the discovery. In 1964 Parliament passed the UK Continental Shelf Act which licensed prospecting, as part of which the royalties were assigned to the Treasury.

While the Scottish National Party may not have agreed to this assignment, at the time it lacked support from the Scots. In the 1964 and 1966 general elections prior to the oil discovery the SNP did not win a single seat in parliament. The Scottish people participated and accepted this structure of ownership as fully as did other citizens. By the 1974 election the oil had been discovered and become much more valuable due to hike in world prices. At this point many Scots changed their mind: the SNP made its political breakthrough from obscurity.

However, once people have agreed to common ownership behind the veil of geological ignorance, any retrospective claim of special entitlement is evidently invalid. The SNP’s posturing as a party of the left is contradicted by the greedy opportunism of its core policy. Yet to date, this ugly behaviour has been allowed to masquerade as ethically reasonable. By default, ordinary Scottish people have come to believe that an independent Scotland would own the oil off its coast.

Does the North Sea oil really belong to Scotland?

Why Scotland’s Oil Policy Could Set A Dangerous Precedent

Existing international law appertaining to the ownership of sub-soil natural resources is concerned only with the assignment of newly discovered resources between states which are already internationally recognized. Had Scotland been independent at the time when oil was discovered, the oil would indeed have belonged to it. However, this has no legal bearing on the assignment of ownership rights to oil within the territory of recognized state. Secession does not override and reassign the established rights to known natural assets.

Scotland is of fundamental importance as an international precedent because it will be the first democratic secession in a resource-rich polity. To date, the only such political separations have arisen through belated decolonization, namely Timor Leste, South Sudan and the breakup of the USSR. In each case the seceding populations had been imprisoned in autocratic polities. International law recognizes that decolonization provides no precedent for other contexts.

The consequences of such a precedent would be disastrous. Many poor countries are discovering valuable natural assets. If the regions that turn out to be well-endowed are allowed to appropriate these resources by seceding, many will try to do so. Even in Scotland, which has been a part of Britain for three centuries, the discovery of oil has stressed the existing polity. The same pressures are apparent in the more recent and fragile polities of poor countries. Most poor countries are relatively recent amalgams of sub-national identities. Resource opportunism could tear them apart.

Indeed, it already has: Biafra in Nigeria and Katanga in the Congo both attempted to secede with their resource wealth: both led to war. In 2012 Tanzania discovered gas off the coast of the Mtwara region. Despite the sustained efforts of President Nyerere to build a sense of national unity, riots in the region claiming ‘its Mtwara’s gas’ have already left four people dead. Not only would a Scottish precedent risk conflict, it would lead to inequality. Fearing secession, polities would concede resource ownership to their regions. A minority of fortunately endowed regions would become islands of affluence in oceans of poverty.

The implications are so serious that the European Union should not leave the issue to negotiation between Britain and Scotland.

http://www.social-europe.eu/2014/05/scotland-oil-avoiding-disastrous-precedent/

ruggedtoast

Shakethedisease wrote: »

I'm not pleased. But feel a bit vindicated that despite having no economics knowledge I pointed out this would happen when the polls headed towards 50% for Yes. All the economic's guru's here told me I was talking *********s.

You are talking *******s.

You've been gibbering incontinently about the polls for the last year. The polls aren't right, you don't believe the polls, the polls are swinging but its not reflected in the polls. This poll is right but you dont believe that one because it doesnt say what you want it to.

Your predictions are based on breathless flag waving, ignorance, and a desire to try and see see England humiliated. Well a lot of people have tried that in the past and it hasn't worked out very well for them.

By the way, good luck with the pound 'tanking' - if you cant work out why that should be of more concern to you than me right now then I'm sure you will have fun finding out. You people's predictions for a sustainable country are completely absurd. Either enough of you will see sense before the 18th and vote No or you are going to have some very painful, and completely self inflicted, lessons in economics yourselves.

IveSeenTheLight

setmefree2 wrote: »

Why do you assume Scotland will get all the oil?

There is a school of thought that Scotland won't.

I'm not assuming anything.
I was responding to the OP who had cited declining production levels and the impact it would have no our economy.

I don't disregard that Oil & Gas is a finite resource, but we should best utilise that resource while we can.

Incidentally, there are many thoughts on how this should be distributed and how these production levels are reported should help give you an indicator of who should receive the taxable revenues, similarly, I would not expect revenues from any Fracking you did in the ROUK.

in_my_bumble_opinion

setmefree2 wrote: »

Why do you assume Scotland will get all the oil?

There is a school of thought that Scotland won't.

The UK is signed up to UNCLOS:

http://www.un.org/depts/los/convention_agreements/texts/unclos/closindx.htm


Over 90% of the oil will be Scottish in the result of a Yes vote and there will be no legal challenge.