Zak Mir on The Pound and a New Scottish Passport

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My British passport runs out in March next year. I have been thinking of buying the new biometric one, so that I do not have to spend up to an hour at border “control” when coming back from a real EU country like Spain.

One of the broken promises associated with joining the then European Community was that we would not need a passport for travel between this county and the Continent. But of course as it turns out we need to show our passports to control terrorism and illegal immigration, something which is clearly a work in progress.

As I was born in Glasgow,  it occurred to me that the alternative to buying a biometric passport was waiting to see if I could buy (most likely) a cheaper Scottish passport after the referendum next month. Initially, this possibility seemed remote. But now it could actually happen.

On the economic front, the best thing this country did in the 1980s was to be too weak economically to shadow the Deutsche Mark under Chancellor Lawson and then get kicked out of the ERM by our hedge fund saviour George Soros, so we kept the Pound. If anyone deserves an Honorary Peerage, George is the man.

Stepping forward another decade and while there was pressure on Prime Minster Blair to join the Euro, it was fortunate that his grumpy Chancellor Gordon Brown saved the country by making up so many conditions for dumping the Pound it would have been easier for a camel to pass through the eye of a needle, than for the UK to adopt the Euro.

This decade to date has underlined the benefits of keeping the Pound, with the near collapse of the Eurozone and geopolitical tensions meaning that a motley crew of Russians, Chinese, Italians, Greeks, Spaniards, the usual Third World money launderers and former heads of State have siphoned billions both into our High Street banks (yes, it still gets through the net) as well as Zone 1 London real estate. Throw in a sprinkling of Non-Dom Billionaires and the cast is complete in terms of explaining the summer peak for Sterling at $1.70 plus, a six year high.

This strength has hurt leading UK companies, with the likes of WPP (WPP) and Bunzl (BNZL) amongst the main moaning at the soaring currency value. However, it may be that they will not be moaning for long. I have taken some delight in teasing my Eurosceptic friends with the following of late: the same argument that takes the UK out of the EU takes Scotland out of the UK.

For some strange reason, no one has disagreed with me on this. Even more interestingly it is an observation which I have not heard in the media at all. But the idea is that if you hate the Brussels gravy train, you cannot exactly love the Westminster expenses fiddling, paid for honours, and career politicians with no interest in those they are supposed to represent. Therefore my conclusion is that even if the Better Together campaign wins – despite the intervention of assorted luvvies, liberals, faded celebrities, champagne socialists and fat cat corporates – 18th September will be a terminal blow for the Union.

It is perhaps unfortunate that the only mainstream politician that I could find in the history books who warned of the dangers of the EU and the move to devolution risking a break of the UK was Enoch Powell, whose views on immigration are still controversial / taboo nearly 50 years after he made them. It is ironic that enemies of the EU in England could find not only that they have not only ceded a large chunk of their sovereignty, but also a large chunk of national soil.

That said, it may be worth it for some north of the border to see the expression on David Cameron’s face on the morning of 19th September with an “oh dear, I have just lost part of the country expression on his face.” The indirect consequence of EU membership could be the first domestic territorial loss since William The Conqueror.

Moving onto the economic ramifications of a fine Scottish mess starting next month we already have a sharp slump for Sterling, below the $1.65 level and well below the 200 day moving average at $1.6690. The fall below the 200 day line is a negative trend changer with the risk on a charting basis being that there could be decline toward the floor of a broadening 2014 triangle at $1.58. This would be due over the next 1-2 months. But of course given the date of the vote next month, this timeframe could be accelerated if uncertainty gives way to panic.


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