NEW YORK (MainStreet) -- Scottish voters earlier Thursday began taking to the polls to vote on secession from the United Kingdom. The world could change by breakfast time Friday.
For those who haven't followed the news, Scotland is holding a referendum to decide whether to become its own nation after formally merging with neighboring England way back in 1707. The consequences are potentially enormous for the British, but for those of us here in America the drama may seem more distant. It's not. Here are just a few reasons why you should care about the outcome of the referendum.
First and foremost, Scottish independence could play hell with financial markets. While we've written at greater length about the secession's stock market implications, the currency issues (and their profound implications for banks, which trade heavily on the currency market) cannot be overstated.
The Scottish National Party has declared that it would continue using the British pound as its local currency. London has emphatically rejected that idea, to which party leader Alex Salmond replied, simply, "No one can stop us from using it." This is not without precedent. For example, several countries such as Ecuador, Palau and Zimbabwe already function entirely on the U.S. dollar; however, one questions the wisdom of positioning your country to become a client state before it has even drawn its first breath.
More importantly, what is without precedent is a country adopting a foreign currency over the owner's explicit objections.