TN4-HESTER.JPGAt first glance contactless debit cards for retail purchases less than £30 may seem to have little connection to Independence, but replacing the cash in our pockets with plastic cards marks the final demise of official government issued money. With that goes the last vestige of credibility from the role of the State in issuing the National Currency or exerting any influence over Monetary Policy. That is of major economic significance.

Everyone knows the regulation of banking is no more than a fig leaf. The underplayed announcement over the Christmas holiday that  the City Watchdog is to ditch a review of bank behaviour underlines the collusion with Westminster. This despite continuing public concerns  over mis-selling and rate-rigging – financial speak for fraud and conspiracy.

In all but name the private banks now own the money system lock, stock and barrel. The Bank of England has been reduced to little more than a convenience for the commercial banks, its main function being to act as ‘lender of last resort’, the guarantor of our bank accounts up to £85,000 and provider of a bottomless pit called Quantitative Easing – all of course at the expense of the taxpayer.

The banks have been writing their own rule book for many years now and these have been enshrined into legislation by politicians who, like most people,  do not appreciate the social consequences  of privatising the money supply.

The EU is equally complicit and this month is ‘tightening the rules’ on bank rescues – the ECB will now force losses on depositors holding more than €100,000, as well as bank shareholders and bondholders. No sign however of addressing the causes of failure and the treatment of Greece remains testament to the primacy of private finance over human rights and the democratic process..

The TBTF (too big to fail banks) are still stuffed with derivatives (financial speak for bets) which do not appear on their balance sheets. These contracts are secured on the banks’ assets, the largest of which is their customers’ deposits. Too many of us forget  that when we deposit money with a bank the law dictates we are just ordinary creditors sharing what is left after all sorts of secured lenders have been paid out.

There was a time when those not prepared to gamble on the stock market  could save for retirement or that new house by earning interest with a Building Society where your money was as safe as the houses they financed. You could trust a Building Society – at least you could before Lady Thatcher deregulated them…

There was a time when those not prepared to gamble on the stock market could save for retirement or that new house by earning interest with a Building Society where your money was as safe as the houses they financed. You could trust a Building Society – at least you could before Lady Thatcher deregulated them…

But now you earn no interest and your savings could be wiped out before you even realised they were at risk. Worse still, you are virtually obliged to place them with a private corporation you do not trust, and with very good reason.

For a time the astute saver bought gold coin and bullion as a store of value. It earned no interest, but at least the price kept pace with inflation and it was safe in a deep vault somewhere. The banks deemed this a threat to their hegemony and devised “Exchange Traded Derivatives in Gold.

These are ‘contracts’ to buy or sell gold at a fixed price at a future date. These derivatives now total some one hundred times the world’s total supply of real gold, so we now have paper gold priced on the same basis as the genuine article. That price is supressed and decided by the Big Five Banks at their weekly price fixing sessions in London. If ever this particular scandal comes to light it will put all the others into the shade.

Many factors contributed to the loss of the Independence Referendum, but none was more telling than the absence of a fresh financial strategy. The currency issue dominated the closing stages and this was by far the top reason given by No voters for their decision (Ashcroft Poll).

In short most banking institutions have become financial prostitutions and our Westminster MPs appear happy to fall over themselves to accommodate them with their custom and supportive legislation. Indeed 99% of the population believe they can do nothing but wait until the next crash to find out how much the rescue package will cost them this time in terms of yet more National Debt, austerity, lost savings, pensions and heartbreak.

Of course it’s very complicated because it’s meant to be. It’s more complex than nuclear physics because there is no logic, let alone science underpinning the system. It is a triumph of spin and PR which is precisely how the bankers get away with feathering their own nests whilst  destroying the real economy.

In the past the threat of collapsing the payments system has been enough to panic a handful of reforming politicians back into their boltholes. That might have had some substance in the days of cheque clearing, cash and a branch bank on every street corner, but today we are looking at  little more than an alternative way to manage a National computer system. Once that is separated from the fantasy world of financial markets and the supply of endless credit to inflate speculative bubbles then the word economics will take on a new meaning.

So it’s not even worth trying to figure it out. Whether you are struggling on a minimum wage, retired with what you believe to be a safe and comfortable pension or and employer building a worthwhile business, just pause for a moment and ask yourself if this banking system is working in your interests.  If the answer is no then we need to fix this before it reduces us all to financial feudalism.

None of this is news, because it started with deregulation of the banks thirty years ago and came to a head with the financial collapse of 2008. That disaster has continued to suppress the real economy to this day. What is even more remarkable is that the SNP advocated sharing Sterling and saddling an independent Scotland with this same crippling burden.

Many factors contributed to the loss of the Independence Referendum, but none was more telling than the absence of a fresh financial strategy. The currency issue dominated the closing stages and this was by far the top reason given by No voters for their decision (Ashcroft Poll). 

So it is unthinkable to even contemplate a second referendum whilst this remains outstanding and the sooner we realise that financial independence is the primary advantage of independence then the sooner we turn defeat into victory.

Nor is this purely a matter for YES voters, it concerns all of us, young and old alike and getting it right this time would make all the difference to the outcome.

SNP politicians showed themselves as bemused as their Westminster counterparts when confronted with the currency issue. They wilted under the threats of doom peddled by the financial bogeymen from the City and the Bank of England. The battlefield was abandoned to bluster and confusion and what should have formed  the cutting edge of the campaign fizzled out into an embarrassing missed opportunity.

Even so, financial independence was being seriously contemplated outside the political bubble. A blueprint for a new banking system specifically tailored to the needs of an independent Scotland had been prepared and committed to print in the book ‘Moving On’. It was all there, and in great detail.

Unfortunately the politicians chose to listen to the bankers and economists who predictably recommended the existing arrangements. Surely it was the widespread discontent with these very ‘arrangements’ which sparked the demand for independence in the first place?

So the theory and practice of how a new Sovereign Money System would take over from the private banks already exists, framed in the context of a Scotland where the scandals and pain of the RBS debacle caused so much damage to Scotland’s reputation for financial prudence.

Since 2014 we have seen monetary reform being seriously evaluated at government level in smaller countries like Iceland, Finland and Switzerland which, as Sovereign States are free to restructure their monetary affairs in the interests of all their people rather than the one per cent.

The banner of The Campaign for a Scottish Currency is unequivocal,  ‘There can be no Independence without financial independence.’ If you share that sentiment then please visit the website and add your name to the contact list.

We need a truly monstrous petition to the Holyrood  government, one signed by everyone who has a bank account, demanding that banking reform becomes a keystone of the next referendum campaign.