The new Scottish pound:
The Scottish Pound would be entirely voluntary i.e. nobody would be forced to buy any so anyone could keep all their money in sterling (or anything else) if they so wished. However, if they wanted it then they would have to buy it with their existing sterling. That means that on Day 1 of its existence the Scottish pound (S£) would have 100% foreign reserves backing in the form of the sterling we used to but it.
OK, fair enough:
Fifth, ScotGov will and should run a deficit of up to 10% p.a. for the first few years of Indy. A state deficit is a good thing – it is the source of our money which is actually just IOUs from the state. It can do that for at least a decade before it reaches the average debt level of an EU member. This is also necessary in order to provide the additional S£ for all those folk that hung onto their sterling. Otherwise there will be shortage of S£ that will push it up in price in the FX market.
Gonna run out of that 100% reserve backing pretty quickly. And the value of a S£ when S is running an annual 10-% deficit is going to be interesting, isn’t it?