The Scottish Currency Question
If I could have ten pence for every politician, who’s put forward his view on the question of what currency Scotland has if they vote for independence, i wouldn’t be just a rich man, but a very rich man.
Surely, the amount of energy expended by politicians, would power a reasonably-sized city like Glasgow.
All of these politicians are flying in the face of the new reality, which is starting to sweep the world. Just read this article on the web site; SmallBusiness.co.uk about the future of banking. Here’s the first paragraph.
I was recently invited onto Evan Davis’ BBC radio and TV show ‘The Bottom Line’ for a discussion on alternative finance. Alongside me was Zopa founder Giles Andrews, the founder of Zopa – a UK peer-to-peer lending platform, and Michael Joseph, the former CEO of Safaricom, which set up M-Pesa, a mobile payment system, in Kenya.
It is the last bit that is the most significant. It also says this about banking and particularly M-Pesa.
The day-to-day of banking is changing world-wide and banks are not the ones driving the innovation. For instance, by some measures, Starbucks is among the 200 largest banks by deposits in the US, having $3 billion on their in-store card in 2012. Both Google and Amazon are also talking about providing finance to users of their marketplaces. At the other end of the economic spectrum, 31 per cent of Kenyan GDP now flows through M-Pesa, which is so simple it can be operated on a very modest Nokia phone and has no physical bank branch presence.
So does it matter about whether an individual or a company has their bank account in pounds, dollars, euros, thistles or beans? It only matters to the individual concerned. As someone living in and spending most of his money in the UK, I would probably keep my account in pounds! Although switching to euros, should be just a choice on the account.
Unfortunately, this transparent and convenient system would be unacceptable to the banks, as they make so much money on currency conversion.
I do wonder, if my new-found liking for cash, may be a personal reaction to the greed of the banks. If I pay by cash in Carluccio’s, I can leave a tip easily. It also seems to get good service, as the staff in many restaurants know me and have the gluten-free menu ready immediately I walk in. It’s also faster to settle up and there is nothing worse than waiting to get away, whilst a dim waitress struggles with a credit card terminal.
So to me, in a few years time, the Scottish currency question will be irrelevant to most people and companies in Scotland. They will pay their taxes in whatever currency the Scottish government uses or is forced to use and keep their bank account in whatever is convenient for their lifestyle or business.
So let’s get going on research to capture all that hot air being spoken to generate lots of electricity.
Now It’s The Turn Of The Milcs
According to the Times, the next source of trouble for the Eurozone is the Milcs, or the small countries with overblown banking sectors.
So just when you’ve learned what Piigs means, you’ve now got to work out what Milcs does.
It’s actually Malta, Ireland, Luxembourg, Cyprus and Slovenia.
As Ireland and Cyprus have imploded, they reckon Slovenia is next!
David’s Golden Rules And Cyprus
I’ve mentioned my late friend and bank manager, David’s rules before, so how would they apply to the Cyprus bail-out and the problems it has created.
Things have changed since he died six years ago, but the two principles he gave me still apply.
If you a UK citizen or resident, he would never have advised anybody to use a bank that was head-quartered outside of the UK, as you don’t know what external factors will apply in that country.
The second principle, was never to bank with a small bank, that has the possibility of being taken over by a man with a large ego for his own purposes. He said this, when I got an offer from Bank of Scotland, in probably the 1990s. I know that they didn’t have the Fred the Shred problem, but he felt that given the changes that would happen in banking, it might be something I would regret.
Incidentally, he was not against smaller building societies and credit unions, and once told me that he believed the latter would be strong in the future. He was wrong on that, but I think he underestimated the conservatism of the average bank account customer, who are reluctant to change banks.
So if we look at the last few years, his rules would have ruled out banking with the Icelandics, RBS and probably Bank of Scotland too!
I didn’t bank with any of them!
So what would he have thought about Cyprus. He would probably have had a very juicy tale about one of the Cypriot Banks ans of course they do break both golden rules, in that they aren’t in the UK and are two small. They may be OK, if you need a local bank account, but these days, with electronic transfers, you could probably manage it all through the Internet. I don’t know for sure, as I’ve only ever been to Cyprus as a tourist for enjoyment. Nothing in the world, would encourage me to live outside of the UK anyway!
But making account holders in Cyprus take a haircut is something, that will happen elsewhere in the eurozone, as the precedent has now been set.
In fact, if I was George Osborne, I might be having a quiet chuckle, as the Cyprus haircut, might be one of the better things that happen to the UK financially this year. Will those, EU citizens with a dodgy banking system in their country, look even more seriously at the UK as a more benign place to live?
I think too, we’ll see more innovative financial products coming out of the City of London, designed to appeal to those with money in other parts of the European Union. If you’re very rich, these products already exist, but will we see products for say the German engineer or doctor of comfortable means, who wants his money safe, to work for him and give him a comfortable retirement.
Bank Customers To Share Pain Of Cyprus Bail-Out
The Eurozone and the IMF have agreed a deal to bail out Cyprus to the tune of €10 billion, as is reported here on the BBC.
What is different though in this bail-out, is that bank depositors will also have to take some of the pain. The comment from the BBC correspondent; Andrew Walker is as follows.
It has been a long and difficult negotiation, partly because of the reluctance of other Eurozone countries to use taxpayers’ money to help foreign customers of Cypriot banks. Many of them are wealthy Russians.
There are concerns around Europe about whether all that money was legitimately acquired and also about how effective Cyprus is in dealing with money laundering.
The deal involves a levy on bank deposits intended to ensure those investors contribute to the bailout. But it will apply to all deposits – at a higher rate on amounts above 100,000 euros.
I’m personally not that sorry, that laundered money will be effectively taxed, but it does strike me, that this crisis could get a lot bigger, if the Russians get annoyed.
Apparently, It’s Romanian Horsemeat!
According to this report on the BBC, the horsemeat at the heart of your burgers and lasagne is of Romanian origin.
What the article doesn’t say is that the reason why horses are being killed in Romania because they are now no longer allowed on the road. This was said by an expert on the BBC News.
So these horses and our consciences are the victims of a Road Safety campaign in Romania.
At least the horses are dead before they are transported all the way across Europe. This couldn’t always be said for some of the meat we export, as it is exported live, so that the recipients can say it is locally killed.
It just shows how stupid everybody involved is, as to take a given number of animals to somewhere in Europe, takes three animal trucks or one refrigerated one. I’ve also taken a competition horse all the way from Suffolk to Scotland, and this needs stops on the way and a good rest in a field or large stable with lots of straw at the end, to make sure the animal is in the correct state to compete.
A farmer friend, who rears top quality meat for Waitrose and others, told me that, the law should be that all meat should be shown as EU-killed in the shop, so that the French, Greeks and Italians, couldn’t say it was locally-killed.
But then when did the EU do something sensible, where animal welfare is concerned.
Should We Have An In/Out Referendum On Europe?
Years ago in 1975, I voted to stay in Europe, in Harold Wilson’s referendum. It was the first time I’d ever voted in any political election.
I look upon our membership of the European Union, with the mind of a Control Engineer. Two things should be born in mind.
Uncertainty is one of the most difficult things, when it comes to making a system stable. And I think, we’d all like stable lives.
Trying to take a system through a discontinuity is dangerous! I use the example of riding a bicycle up and down a kerb. Or if you don’t ride one, how about driving a car over a sleeping policeman.
For me, the best way to control anything is lots of little actions applied regularly and often.
Look at the serious discontinuities, the world has experienced in the last few years, like the attacks of September 11, 2001 or the bankruptcy of Lehman Brothers. Our reaction was strong and as a control engineer, I think it could have been far too strong. We just panicked and made things worse.
The referendum on Europe would be a major step-change for us all to pass through, with many in favour and many against. Just the holding of the referendum might have either a lot of large positive or negative effects.
Let’s face it Europe has a lot of problems. Some like the budget and the non-sign-off of accounts are large problems in politicians of the out tendency, but they are the sort of problems, that in any large organisation, can generally be solved by hard negotiation.
One thing, that politicians seem to have ignored is the world in 2018, will be a very different place to that today. There is so much uncertainty!
The only good thing, is that a lot of that uncertainty will result in positive results for Britain, Europe and the whole planet.
Think about these issues before deciding on whether we should have a referendum.
1. Suppose Obama is replaced in 2016, by a very unacceptable president, who makes Mormon Mitt look like a liberal.
2. Will Scotland still be in the United Kingdom?
3. Will France be an economic powerhouse?
4. Will the banks still do all their traditional functions?
5. Wind turbines and nuclear power.
6. Airports and trains.
7. Where will the next big war be?
There is a lot of uncertainty, is the only thing you can say. And all David Cameron is doing is increasing it!
Does A Country, Company Or Organisation Need A Woman At The Top?
There has been a lot of news today about the release under the thirty-year-rule of secret documents concerning Margaret Thatcher and various subjects like the Falklands War, Jimmy Savile and her son, Mark.
Nothing is particularly contentious, except perhaps the fact that someone misjudged what was happening in Argentina and gave Mrs. Thatcher bad information. But then the Secret Intelligence Service, didn’t give Tony Blair the best information either.
On the other hand, when dealing with Mark lost in the desert, she seems to have acted to make sure that the state didn’t pay for her son’s folly.
If we go through the history of the United Kingdom, you’ll find that at various dark hours, women have been to the fore. You could start a list with Boudicca, Elizabeth the First, Victoria and Margaret Thatcher. You could argue that our current Queen has been a safe pair of hands for most of her life. She was also part of that vast army of women, who stepped in to fill the gaps in the factories, in transport and as support staff during the Second World War. Hitler didn’t mobilise the German women and he of course lost. Some historians say the mobilisation of women in the UK, was a major factor.
I would argue that you don’t need to have a woman at the top,but once you have, it changes a lot of the culture, even if it’s just other talented women believe they can get there. And competition is always healthy, as it promotes the best!
Look at Margaret Thatcher’s effect on British politics. Before her stint as Prime Minister, there were few women at the top in British politics and there have been a lot more since she resigned.
Look at the basket cases of the Eurozone! How many of them have had a woman Prime Minister or President. Only Ireland and that is the one country in trouble, that is making progress towards sorting its finances.
Scotland And The EU
This article in the Telegraph about the relationship between an independent Scotland and the EU is really worth reading.
Not for the article itself, but for the comments that have been added by readers.
Many would be worthy of a good comedian. And plenty bad ones too!
LloydsTSB Move Customers Without Their Permission
I choose the organisation I bank with, not politicians or bloated bureaucrats from Brussels. So LloydsTSB is totally out of order to move customers to a new bank as reported here.
I suspect a good proportion of those moved will create a stink. UKIP must be rubbing its hands with glee.
You might also argue, that you have few rights when your bank is taken over by another. I used to bank with the Woolwich, which was taken over by Barclays, who I don’t care for. So I moved to Nationwide.
On the subject of Barclays, I used to work with a guy, who had a T-shirt complete with the Basrclay’s eagle, that said “Bank With Warclays”
Greece’s Final Bailout?
I don’t expect so!
But they got one yesterday, as the BBC reports.
Will we ever sort Greece out?
In some ways all we’re doing with Greece, is like giving an alcoholic a bottle of Scotch a day.
Until the Greeks change their habits and accept their lifestyle will have to change, we’ll have to keep bailing them out.
In some ways, the key to a country’s future is its education system. According to this report on the BBC, the UK system ranks sixth in the world. We could obviously do better, but on looking at the full table, Greece is ranked 34.
The Anonymous Widower 