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Current Affairs. Affairs of Currency.

pistoleThis is a Pistole bearing the head of William III of England or William II (and other things) as he was known in Scotland. The Pistole was one of the last coins struck in Scotland. It was a gold coin worth twelve Pounds (Scots) or One Pound Sterling. It was minted for the purposes of the disastrous Darien Scheme.

King William III/II was the guy directly responsible for the Massacre of Glencoe. He may be familiar to Scottish football fans and those who witness Orange walks as depicted on his white steed.

King Billy indeed.

Despite the massacre and its circumstances William is still regarded in high praise, indeed eulogised by sections of society here.

Scotland can be like that.

Anyway, I digress.

This is a bawbee: from the reign of Charles II at a time when Scotland shared a monarchy but not a parliament with England.COPPER-BAWBEE-CHARLES-II
This is a groat from the time of David II of Scotland (1329-1371)

David_II_of_Scotland_groat_1367_612676

The pound Scots (Scots: Pund Scots) was the unit of currency in the Kingdom of Scotland before the kingdom unified with the Kingdom of England in 1707. It was introduced by David I, in the 12th century, on the model of English and French money, divided into 20 shillings each of 12 pence. The Scottish currency was later debased relative to sterling and, by the time of James III, the pound sterling was valued at four pounds Scots.

In addition to the pound Scots, silver coins were issued denominated in merk, worth 13 shillings 4 pence (two thirds of a pound Scots). When James VI became King James I of England in 1603, the coinage was reformed to closely match that of England, with 12 pounds Scots equal to the pound sterling. In 1707, the pound Scots was replaced by the pound sterling at a rate of 12 to 1, although the pound Scots continued to be used in Scotland as a unit of account for most of the 18th century.

I’m a wee bit concerned that the pound Scots lost eleven twelfths of its value over time.

All this is just a look at history, but there is now a serious body of opinion recommending that Scotland have its own currency in the event of a yes vote in next year’s referendum. Whilst the return of bawbees, groats and pistoles seems rather unlikely, I’m reminded of a former Scottish Parliament initiative which offered translation into some quaint ersatz language, which I doubt anyone ever spoke. Certainly in my more than 50 years in the country I never witnessed anything like this outwith the pages of the Sunday Post cartoon section:

Gib-1-Scottish parliament Gaelic.tif

Scottish Parliament literature on how it can help the Scots Simon Walters copy

The ‘Pairlament’ seems to have quietly dropped the Scots translations presumably because no one used them and they held the whole country up to ridicule they were so popular there were frequent server errors.

Anyhoo I digress again. People have pointed to Iceland where their own small circulation currency has been cited as the reason that their economy has been able to recover so quickly from the catastrophe of a few years ago. Whist this is true it is worth pointing out that it was also a large part of the reason they got into trouble in the first place.
The risk of a repeat of there woes is so great there that they want to join the Euro……

A few weeks ago I made the point that I didn’t know how I would vote in the referendum because I wasn’t clear on what I was being asked to decide upon on many issues. It’s good that the debate has developed but there hasn’t been any increase in clarity on those issues. Indeed the waters have been muddied.

The SNP want to remain in Sterling and the EU post independence. Neither the EU nor the remaining UK it would appear want Scottish independence. The EU have made clear that Scotland would have to apply for membership and new applicants must commit to the Euro.

The SNP want independence. But do they? They want the monarch of the UK to remain as head of state, they want the Bank of England to remain the central bank with all its power over money supply, interest rates and the like. And by default on that they want to keep Sterling. I heard John Swinney yesterday say that the UK would not want to lose an independent Scotland from the ‘Sterling zone’ because it would affect the remaining UK’s balance of payments!

Clearly the SNP envisage continuing monetary union but with the freedom to decide on fiscal policy unilaterally.

That’s not independence.

That’s picking and choosing.

Michty Me!

Twitts

This is a graph of yesterday’s financial market trading in the USA as monitored by the Dow Jones Industrial Average Index.

djind

You’ll notice that just after 1:00 pm there was an almighty drop which lasted a few minutes. By about quarter to four things had recovered pretty much on to an even keel.

The reason for the drop was, quite incredibly, the hacking of Associated Press’s Twitter account, which announced that President Obama had been hurt in a series of explosions in the White House.

The Twits at Sadler's Wells

Roald Dhal’s ‘The Twits’ – Not the New York Stock Exchange.

The following is from the Washington Post:

The swift reaction demonstrates once more how vulnerable the markets have become to technological glitches. The bombing in Boston last week and the harrowing manhunt that ensued probably hastened the response from an already jittery investing public.

The tweet popped up on traders’ screens shortly after 1 p.m. The AP used social media, its Web site and its corporate blog to announce that its Twitter account had been hacked. The company said it was investigating the matter with Twitter, and the White House weighed in to calm nerves.

“The president is fine,” White House spokesman Jay Carney said. “I was just with him.”

But in the investing world, where super-high-speed computer trades dominate the market, the reassurances did not come quickly enough to prevent momentary chaos. The Dow Jones industrial average fell more than 100 points between 1:08 p.m. and 1:10 pm.

“And it wasn’t just the stock market. It was the bond market and commodity market and everything,” said Joseph Saluzzi, co-head of the equity-trading firm Themis Trading. “The event was done before humans could even process it.”

Saluzzi said he saw the post immediately, because he keeps an eye on Twitter for the entire trading day to learn about any potentially market-moving events. Market experts say such close tracking of social media has become the norm in trading.

“Firms are looking for information wherever they can find it,” said Larry Tabb, chief executive of Tabb Group, a financial research and consulting firm. ”They’re analyzing real time news feeds, scanning the Web and mining Twitter feeds. . . . They price news.”

But increasingly, the method has backfired. During a one-week stretch in February, hackers infiltrated the Twitter accounts of Burger King and Jeep, spreading false posts that each company had been sold to a rival.

A string of such corporate Twitter hacks in recent months prompted traders at Jones Trading Institutional Services to sit tight when they spotted the AP tweet on Tuesday, said Tom Carter, a managing director in the firm’s Los Angeles office.

The traders in Carter’s office, who stay connected with the firm’s other offices via a loudspeaker they call “the hoot,” were immediately suspicious.

“Someone said over the hoot that there’s a Twitter report about explosions at the White House,” Carter said. “We had a desk analyst and he told us to just wait. We watched the stock drop, then it stopped, and then it started bouncing around and it popped straight back up again.”

The FBI is investigating the matter, said FBI spokeswoman Jenny Shearer.

The financial markets. Just like a big bookies’ shop with the same excitable, fearful, superstitious reaction to events that punters tend to indulge in, in such environments. And it would seem with computers in control of that excitement, fear and superstition so that it can be executed with precision.

The financial well-being and decisions of the planet -its nations and their institutions, companies and citizens is predicated on such nonsense.

There surely has to be a better way.

What’s the fastest growing currency in the world?

It’s the Bitcoin:

bitcoin_goldv2

“Bitcoin uses peer to peer technology to operate with no central authority; managing transactions and issuing Bitcoins are carried out collectively by the network. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment systems.”

Apparently one of those uses is the sale and supply of drugs so its success is just about guaranteed one would think.

An interesting article here about it.

Tales of Two Stars

Regular correspondent Claret and Amber sends links to two newspaper clips:

lampard

Just to confirm that Mr Lampard has, according to the Daily Star, offered to take a £100,000 per week pay cut to carry on kicking a ball for Chelsea.

foodbank

If Mr Steward has been quoted correctly by the Morning Star, then he is obviously one of the ‘Bar Stewards’ referred to by Totonto Tam in his last comment!

Quote of the day

Treasury Secretary Danny Alexander on the threat to the UK’s triple A credit rating (from The Herald):

However, Danny Alexander, Chief Secretary to the Treasury, brushed aside the warning, saying he did not regard credit rating agencies “as the be-all and end-all of this”.

He explained: “What matters is the judgment the markets and the people who buy our debt to support our deficit make about the credibility of this country. The test I apply is not what some external organisation is going to say about the UK, but whether we have got the right measures to ensure we continue to have that credibility.”

The people who buy our debt to support our deficit?

Credibility?

We’re doomed.

alexpee

Another day older and deeper in debt.

The UK debt now stands at over £1 trillion. That’s £17,297 for every man, woman and child in the country.

That’s £38,024 for every person in employment.

The interest on this debt is more than £40 billion per year.

This year every household will pay £1,924 in taxes just to pay that interest.

Debt is nudging 80% of GDP, around 25% higher than it was five years ago.

This isn’t a new thing as the debt at the end of the Napoleonic wars at the beginning of the 19th century was 200% of GDP. It was similarly high after the First World War.

Some of the money borrowed from the USA at the time of WW1 has never been repaid or officially written off.

The final installment of debt payable to the USA for money borrowed during WW2 was paid in 2006.

When the UK was forced to go cap in hand for a bail out to the IMF in 1976, the proportion of debt to GDP was around 65%

Here is a rough sketch of where your money as a UK taxpayer (and if you live here, that’s everyone who buys anything) goes.  Interesting that ‘England’ doesn’t get a cost mind you!

uk debt

You know, I think there might just be another financial crisis looming. One which will make 2008 look like a Sunday School picnic.

Get tae buck!

I see that despite having rung up sales in the UK of more than £3billion since opening their first store here in 1998, Starbucks have paid just £8.2 million in tax during that time.

They are now a target of UK Uncut, the pressure group protesting and challenging companies who they see as dodging their tax responsibilities.

Good.