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A Bad Sequel

09/10/2014

It is a bad sequel to a great movie.  One can argue that the only good thing Mel Gibson ever did was the 1995 movie Braveheart, which won several Oscars, including Best Picture.  It shows the subjugation of Scotland by the English beginning in 1280.  That was a long time ago, but tribal memories are even longer.  The Scots still want to be independent, unfortunately.

With the markets focused on the Ukraine, Syria, ISIS, ebola, and so forth, nobody noticed that the Scots are finally getting to vote next week on whether they want to be part of Great Britain, ending 307 years of economic and political integration.  Nobody thought Scotland would really vote to succeed, but the first poll indicating the Scots would vote Yes to succeed was Saturday.  The second poll was Monday.  Suddenly, Great Britain is terrified, and the English Pound has started falling.

There are so many imponderables about this.  Will it be good or bad for the pound in the long run?  Will there be a fight over the oil revenue from the North Sea off Scotland?  Since Scotland is normally Labor (think Democrats) in the English Parliament, does this hand permanent control to the Tories (think Republicans)?  Will Scotland join the European Union?  Will it even be accepted into the EU?  Will it join NATO?  Will this election encourage other tribes to succeed, like Catalonia from Spain?

And, what does increased uncertainty do to stock markets?  It’s not good, especially for the English stock market!!

It is an unfortunate coincidence that the current Scottish independence movement was born before England’s austerity measures started to pay off.    Sometimes, economics drives politics.

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