NOW the dust has settled, what are we to make of Chancellor Kwasi Kwarteng’s mini-Budget and its implications for British politics?

First up, it is a tremendous gamble. The very fact that the cost of government borrowing rose by fully one-third in the time it took Kwarteng to make his speech on Friday shows the financial markets are spooked. The bankers and investors don’t like politicians taking bets with their money.

They would have preferred conservative Rishi Sunak as PM.

So who is going to benefit from Kwarteng’s fiscal largesse? Let’s take the likes of arch- Brexiteer Crispin Odey, the UK’s premier hedge fund guru. Once upon a time a certain Kwasi Kwarteng worked for Odey as an investment analyst.

Later, after Kwarteng was elected to Parliament, his register of interests showed our then future chancellor was still pocketing a cool £20,000 a year from Odey Asset Management – for political advice – on top of his MP’s salary. Hedge funds are machines for taking huge financial bets.

Odey and his hedge funds make their cash through “short selling” UK currency and government bonds. This means Odey sells pounds and bonds he has borrowed but does not own. He is betting that later the price of these things will fall. Actually, the very act of selling usually forces down the price.

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Odey can then buy back the said pounds and bonds at prices more cheaply than he sold them for. He then returns the pounds or bonds to the people he borrowed them from – and pockets the difference.

It is exactly like betting on a horse to lose except you are betting on the UK economy to go down the plug hole.

Odey is a major supporter of Brexit. He donated nearly £1 million to pro-Leave campaign groups in 2016. But that did not stop him shorting sterling after the Brexit vote. Originally, in the run-up to the EU referendum, he thought the Remain camp would win and that the pound would rise in value afterwards – presumably because the markets felt staying in the single market was good for the economy.

But after the Leave victory, Odey proceeded to short the pound, ie bet on sterling dropping like a stone (which it did). As a result, Odey made a reported profit of £300m.

How could Odey back Brexit yet still bet on the Leave vote hurting the UK economy? Odey explained this bizarre contradiction by blaming the then governor of the Bank of England, Mark Carney.

After the Brexit vote, Carney moved to support the UK economy by printing billions of pounds in so-called quantitative easing and pumping the cash into circulation. According to Odey, this move by the Bank was bound to be inflationary and hurt – rather than cure – the economy. Ergo, Odey shorted the pound. That’s getting things back to front, of course, but Odey wasn’t bothered. According to the Sunday Times Rich List, he’s worth close to £1 billion.

So where do the Chancellor’s mini-Budget proposals come in? In the last few years, quantitative easing in both the US and Britain helped to push stock markets to record heights. This was bad news for the hedge fund industry as a whole and for Crispin Odey in particular.

A booming stock market makes asset values rise rather than fall.

This is bad news for short sellers like Odey. As a result, his hedge funds plummeted in value.

What the ailing hedge fund industry needed was a bit of economic chaos. Hedge funds just love economic uncertainty so they can make more bets. Odey helped chaos along by chipping in for Boris’s leadership campaign in 2019. It worked.

Now, with the Russian invasion of Ukraine, skyrocketing energy prices, the manifest weakness of the UK economy in the wake of Brexit, and the insane summer policy hiatus as the government went into hibernation for the Tory leadership contest, chaos is back big time.

No surprise then that Odey has spent this year shorting UK Government bonds. Governments borrow by selling bonds (which pay interest). In other words, Odey bet that any future Tory chancellor would borrow big time.

To raise the dosh, this chancellor would be forced to pay higher and higher rates of interest. But with so many government bonds up for sale, their market value would drop at the same time the interest paid on them was rising. So Odey shorted UK Government bonds, keeping his fingers crossed hoping the price of bonds would fall.

On Friday, Kwarteng got up in Parliament and delivered a mini-Budget that promised billions in new borrowing. Result: a sharp fall in bond prices. You could hear the hedge funds cheering. Last week the value of Odey’s main hedge fund was up 145%.

What did Crispin Odey think of Kwarteng’s budget? For once the Delphic hedge fund guru was prepared to be quoted. Odey advised: “They are trying the right things but there has to be a risk we are going into a Barber Boom, by pushing the button on inflation”.

Anthony Barber was a Tory chancellor in the 1970s who – like Kwarteng – borrowed to grow the economy during a period of high inflation. His gamble failed as prices and interest rates rocketed and the economy collapsed into recession.

This is a fascinating insight into the mind of a hedge fund manager. Odey is virtually saying that Kwarteng’s mini-Budget is going to fail – that it will lead to economic chaos. He’s hard-headed enough to see reality staring him in the face.

But, of course, hedge funds will make even more money by betting on the Kwarteng Boom collapsing and share values and bond prices hitting the floor. Recession is bread and butter to the hedge fund industry. Such is the insane economic system we live under.

What does all this mean for Scotland? I’m sorry to be a party pooper, but the collapse in the value of the pound following Friday’s statement tells me it will be absolute folly for an independent Scotland to keep sterling, even in the short term.

The pound is headed to parity with the US dollar. This is partly because the hedge funds are busy shorting sterling – betting it will sink further so deliberately selling sterling cheaper. And partly because the outlook for the UK economy after now is so rocky that investors prefer moving their cash to Wall Street rather than see its value eaten by inflation. A falling pound boosts inflation even more as imports are more expensive.

An independent Scotland keeping the British pound means we will have our economy run by billionaire speculators such as Crispin Odey. And a weak pound will simply import inflation into Scotland, forcing the Scottish government to pay more for its borrowing – and pushing Scotland into recession through higher interest rates.

The whole point of independence is to be able to run our own affairs, not continue to be subservient to spivs and speculators in the City of London. When will we learn?