Ghillies on the Tweed

Is Scotland headed towards independence?

That’s the question Scottish voters will decide next week. If they vote to secede from the United Kingdom, Queen Elizabeth will remain Scotland’s nominal head-of-state, but pretty much everything else is unclear. Like Quebec’s vote on independence 20 years ago, Scottish independence is an emotional question, as well as an economic and political one. Then as now, a long-standing separatist movement appeared to gain significant momentum shortly before the referendum.

Yes/no opinion on whether Scotland should be an independent country:

Source: whatscotlandthings.org

The UK economy is deeply integrated. Sorting out which country would benefit from North Sea oil—and who would be responsible for the £1.4 trillion in UK debt—is complicated. Oil and gas account for 1.8% of the UK economy, but they would comprise 13% of Scotland’s. An economy that depends on natural resources is more volatile, and subject to the resource curse and the Dutch disease.

But intricate economic and financial arguments won’t rule the day next Thursday. Many Scots are still smarting from Margaret Thatcher’s economic reforms in the ‘80s. For them independence is a left-right issue. It’s somehow fitting that the independence of Adam Smith’s homeland is turning on issues of national wealth and state capitalism.

Bookmakers currently make odds of a “yes” vote on the referendum at less than 50/50. Despite recent polls, there’s a natural conservatism many people have when they consider changing the status quo. Like salmon swimming the River Tweed from England into Scotland, political independence is an upstream swim.


Douglas R. Tengdin, CFA
Chief Investment Officer
Phone: 603-224-1350
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By | 2017-07-17T12:34:15+00:00 September 12th, 2014|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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