'Wales could be a prosperous country if it had its own currency'

Look up modern monetary theory. Essential idea is that the sovereign banks creates new money every rime it spends. Spending comes first before any tax or borowing. Tax isn't a means of raising revenue but is the main way to control inflation. The current hammer for controlling inflation is bank of England interest rates. This is set by ex bankers and and at higher rates punishes working people, slows spending in the productive economy but rewards banks and those who are asset rich. Money can be created and invested in the productive economy. Tax can be used to control inflation and to redistribute wealth from unproductive parts of the economy to produntive parts of the economy. The assets from those investments are kept by the country. We saw all the money creation play out during Covid. Billions of pound were printed. Unfortunately, after covid, no one thought about how to get any of that money back. The the cash trickled up to the wealthy, and after some spending on a luxury holiday or whatever is probably sitting in an unproductive part of the economy (saving account or shares). This has fulling income inequality and slowed down the productive economy as most people have less money to spend on things we buy to live. The UK and Cymru are in a very different positions to Peru, Venezuela or Zimbabwe. We have been sold a myth (the household finance analogy) about how macro economics works. Following the same economic policies of the last 40 years will only result in further societal decline with no money to spend on things we need pushing further millions into destitution as the money created by the bank of England, every time the government spends, ends up hoarded by the wealthy and sitting idle in the unproductive financial sector.

Couldn't agree more.

Zimbabwe and Venezuela are forcibly exiled and isolated from the global economy. Of course that couldn't have anything to do with hyperinflation...

Maybe they don't discuss those countries because its completely irrelevant? Venezuela and Zimbabwe had their own currencies for decades and were doing just fine right up until they were deliberately and arbitrarily excluded from the global marketplace by the US. Your whole thesis is that its literally impossible for a country to have its own currency.

MMT theorists usually reference Japan, which has seen a large increase in money supply but for decades still struggled against deflation. The Japanese experience has proved difficult for mainstream economics and currency traders to understand. Uncontrolled money creation would undoubtedly be inflationary but no serious MMT theorist advocates this, although some MMT supporters do not always sufficiently acknowledge the constraints and risks in money creation. The contrasting experiences of Japan and Zimbabwe/Venezuela show that the economic circumstances and institutions of a country are the decisive factors in deciding whether or not a country should engage in controlled risk-managed monetary expansion. Japan runs a large trade surplus, has high local savings, is well-integrated into the global economy, and has a stable government. The economic prospects for an independent Wales depend on much more than currency. We should also remember how disastrously current models of economic management has failed. It has given us the bankers crash, austerity, and the ongoing self-imposed constraints of tight fiscal rules and obsession with balancing budgets. As Mosler says, we would not be having this discussion if the dominant model were working. It is right to explore alternatives.

Narnia. Went well apparently.

A good question, Basil, but easily answered. A bit long though, sorry. All governments with a sovereign fiat currency spend by creating currency or usually a credit (as authorised by parliament etc) placed in their departmental account. This has been going on for many years in some countries, but the UK only since 1931 when the gold standard was abandoned. No similar government needs to borrow but there is utility in bonds... We don't therefore have a 'tax and spend' economy. Government revenue pays for nothing, despite much propaganda to the contrary from the media and politicians of too many ignorant stripes. The necessary control (over inflation) is provided by a fair and effective taxation system and a well-funded revenue authority. Unfortunately, we don't have control over imported oil and gas prices, the source of much recent inflation in the UK. And our tax system undertaxes high incomes and high wealth - hence permits another source of inflation in the economy. We have a 'spend and tax' economy, which borrowing (often unnecessarily) and devices like Quantitative Easing (QE) attempt to conceal. Risibly, the Bank of England believes that inflation can be controlled by interest rates. Your new mortgages will show that to be a lie. Countries that have ineffectual tax systems (Peru, Venezuela, Zimbabwe, others?) lack the necessary controls and hyperinflation becomes unavoidable. Therefore, Peter J, poor outcomes in those countries arose primarily by creating more funds than the economy could cope with, net of whatever taxes could be collected and net of the liquidity that our society and economy need to function. It is important to understand how money works. Recent UK governments have had an additional agenda based on so-called free market ideology. They align with the interests of bankers and those with wealth, conveniently believing that wealth trickles down. It doesn't - it gushes up, which is plain to see. Since Thatcher-Reagan and intense lobbying by banks and the City, reliance has been placed on the private sector well beyond its capacity. Hence, deregulation > excess expansion > recession > regulation > deregulation in a cycle that is about to repeat again very soon, spiralling downwards into ever-increasing austerity. No way to run an economy, or manage a society! If we want a flourishing private sector, we need to change this agenda and empower the public sector to start investing... The private sector is too risk-averse to invest. Wealthy individuals likewise - they save instead. Dead money. The next government must skip the dogma, adopt a Keynesian approach and head towards a sustainable steady state. Keynes said we can afford anything we want (subject to real world limits). I'd prefer that he had said need, as that's where our priorities should lie - no one hungry, no one sleeping rough, adequate wages, pensions and benefits, free access to health , care and related services and lifelong education for all. Over-investment in energy production (in Cymru) represents an uneconomic allocation of resources (which would cease on independence). Investment in datacentres and suchlike, albeit highly profitable to shareholders, do not meet needs. If we meet needs, that will build the country we want. If you seek extra reading, look up multipliers, propensities to spend and to save, and Richard Murphy on Modern Monetary Theory and his exemplary Taxing Wealth Report 2024.

This is literally how money has worked since the beginning of civilisation, right up to the advent of neoliberalism. And how well is neoliberalism going?

I agree; but I’m less worried about Plaid currency fantasists. They can’t bring themselves to openly advocate independence any time soon, let alone a new currency. Not happening.

The US economy is literally designed to be dysfunctional in a way that hands the financial sector total power over the economy and grotesque levels of wealth.

Sticking with sterling is also a big risk because it requires the Bank For England to be a good faith partner and not set policies that are slightly inconvenient for a much larger economy but fatal to new small ones.

Sound dodgy. You need to be an 'intellect' or 'thinker' like mr's mosler and hooper or ms wood to get away with such nonsense talk and get published in a news outlet, apparently

Frictional unemployment does not need to be more than around 1% of the total labour force. Anything much above that is wasted resources. I am not an MMT enthusiast but MMT advocates are right to point to the human and economic costs of unutilised resources and to prioritise reducing those, including through judicious use of money creation.

You'd be surprised what raw materials are around for Wales to exploit, even if we're just talking about mining (and I'm not talking about coal). Copper, Silver, Gold and Lead are currently mined in Wales. I'll refer you back to the 25 May 2023 article by Martin Shipton on Nation.cymru detailing results from the British Geological Society, a report co-authored by Kathryn Goodenough (yes I double checked the name and yes she's real).

I am pleasantly surprised, Lyn E, to find that I am almost in total agreement with your contributions to this thread! I course, I could quibble - I was astonished that you could think I treat real world limits as an afterthought. From Wikipedia - Parentheses contain adjunctive material that serves to clarify (in the manner of a gloss) or is aside from the main point To clarify, it was this second application of parentheses I was employing. The main point of course was money creation by government. Keep up the good work!

You can only join the Euro AFTER you have had your own currency.

I would imagine Warren would put conditions on a statement like that. But would be in general agreement with that idea. The main point is that these countries (like the UK) are not using the power of their currency to increase wellbeing. They are all neoliberal and informed by the wrong economic ideas. However, that is not the argument he is making in this article, which focuses on Wales.