My (English-born) DH and I (Scottish-born) both heavily identify with being British as well as our more local identities and we live in Scotland. Neither of us thinks independence is a great idea. I'm ambivilant about the monarchy (in principal, I think that the head of state should be elected, but in practice, I'm not sure that a presidential system would improve the UK, imagine London-Mayor-style elections). DH who is fairly pro-monarchy, wouldn't mind something commemorative if it was decent quality and not so damn expensive. And even we have had a good laugh about the sheer quanities of union flag coated goods on the shelves.
We reckoned it would be possible to go on a jubilympics diet (only eating products with a prominent union flag), with everything from bread to cereal rebranded for the jubilee/olympic season.
For us, abstaining from buying Jubilee tat is more about avoiding the crass commercialism of the retailers rather than any political statement about the union or the monarchy.
I am a big fan of the Olympics though, so may end up buying some 2012 union flag branded tat. Its a home Olympics (whatever the nationalists think)! I watched most of the Bejing and Vancover Olympic coverage, and I'm looking forward to more of the same, especially as I'll either be impatiently waiting my overdue baby, or spending large amounts of time establishing breastfeeding - either way, tons of Olympics will be watched and I'm not big into sports
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We didn't get tickets for the football because we were short of money when tickets first went on sale, and now baby is due, and I'm not really a fan of football anyway. I like the mixture of athletics, cycling etc. So, the number of tickets sold for Hamden might not mean that people in Scotland don't like the Olympics. We'll certainly try and see the torch relay.
Only read the first few pages, apologies if things have moved on.