The Financial War Against Iceland

If you read no other article this Sunday, read this entire article, we’re on the same course.

why oh why did iceland ‘nationalise’ their banks. If they had just allowed them to collapse, the ‘creditors’ (most of whom have hands just as dirty as the banks themselves) would have been wiped out and the state would not be in the intergeneration quagmire they find themselves in now.

I don’t understand it.

We are constantly told ‘if we don’t nationalise our banks our economy will collapse’

Well, our economy already is collapsing, and if we do nationalise the banks, we’re just nationalising their debts which will cripple our ability to recover in the future.

Its a bit like the navy towing a striken nuclear submarine back into their naval headquarters, because its important and if they don’t repair it, it will sink, only to have it explode in a massive nuclear blast, destroying half the country.

That’s why NAMA is a stupid idea. The government is siding with the bankers and piling on public debt while not sharing capital with the taxpayers, this can only lead to a collapse in sustainable economic growth.

That’s why the guarantee is a stupid idea. Our banks have already collapsed. They are already nationalised. The guarantee has seen to that.

Good article , here is a key part of it . Iceland binged on carry trades …meaning that much of its debt is foreign and only keeps growing as its own currency becomes progresssively more worthless. The banking sectro ( I don’t have external debt stats) was 5x the size of the economy when the currency was worth something . The external debt was at least half teh value of the banking sector I should think.

Except that we Irish cannot do this. Any attempt to ‘inflate’ our way out of these matters is punished by queue of cars outside Newry and skangers on every street corner monopolising the cigarette trade…remember the way talbot street was for all of the 1990s .

That should read , governments with sovereign currencies can inflate their way out of domestic debt and then only at the risk of punishing their more prudent and less profligate citizens

Because elites everywhere conspire to impoverish their citizenry and identify far more with their international counterparts than with their own citizenry. What looks like a stupid decision is in fact a well-thought out scheme to “socialise” the losses, i.e., transfer the losses which the elites are suffering onto the backs of the citizenry.

Ireland, UK and the US are doing precisely the same thing. The people basically know they are being screwed yet feel helpless to act.

The only defence - and it’s not much of a defence - the people have is to constantly change the governments they elect, irrespective of how incompetent an opposition may seem. Strictly enforced regulations and transparency are also good defences against the emergence of parasitic elites.

Elites are the real enemy of the people.

…and the only defense ever is revolution.

Nappies and governments - both need to be changed regularly and for the same reasons. :smiley:

great article

Interesting that he acknowledges printing money as an acceptable means of eroding debt (thus offending against a PIN sacred cow)

A sacred cow of many pinsters but not a pin sacred cow.

sounds like the lesser of two evils at the moment but the krauts will never buy it

Inflating your currency only repudiates your debts to your own citizens, it increases the difficulty of repaying foreign debt. Unless your debts to foreigners are denominated in your own currency, as is the case with the USA.

The Dollar became the world’s reserve currency in 1944 because it was 100% exchangable for gold at the rate of $35 per troy oz. The reserve currency was in effect still gold. The world was trusting that it was in the USA’s interest not to print more dollars than they could redeem.

When you give politicians and their central bank the power to effectively print gold then you are putting a lot of trust in human beings. If you were Richard Nixon with an unpopular war to pay for and demonstrations on the streets would you a) increase taxes so that the US pays for its foreign policy, or b) print the money you need at the expense of foreigners who can’t vote in your elections?

The French called their bluff and asked for the gold. Nixon understood that the gold was not a “barbaric relic” but the only real money on the planet. Otherwise he would have let them have the silly yellow metal. He closed the international gold window. That should have been the end of that but America has been so sucessful in persuading the world that “we’re good for it” that each successive administration has come to believe that it dosn’t matter how much you print because the waiter is never going to present the bill. Well the bill has arrived and there’re trying to hide in the jax.

Inflating your currency when a high proportion of government and personal debt is denominated in foreign currency is not a solution it is a disaster.

However, if you can issue debt in your own currency then you can live on easy street and then screw you creditors using inflation. When they finally realise they’re being screwed they will have to eat their losses. Then they stop lending to you. What do you do then?

Build a bigger jax? Get some portaloos? :smiley:

Good stuff, but man that’s a long read. Found it a bit repetitive at times, or maybe I just kept reading the same paragraph.

Hope our creditors dont follow U K and use Anti Terrorist laws as against Iceland…

Such law abiding gentlemen.

yeah I thought the same thing, kept thinking I was after paging up and not paging down.
ahh the beauty of history ecapsulated in a single read, fair play alot of research but sure words dont mean much unless your an academic and its your job and you paid by the word count.
is it a road to damascus aticle, the author seems to have had a long and distinguished career working the other side of the street for investment banks and now comes to say how predatory they were, i wonder did he return the money left lodging in his bank account after his time working on Wall St squeezing the balance of payments on South American states…

At some point I hope they realise that money is 99% bullshit and is no good reason why people can’t get along and cooperate.

Is that the way it’s going to be? Western Europe had a fine future of cooperation with Iceland ahead of it. We were going to build up infrastructure to harness Iceland’s immense geothermal power to help us build a three-pronged all-renewable energy future (along with wind and solar power) for the whole of Europe.

Now, because some w4nkers all over Europe went mad with greed, we’re going to dump that future and go back to buying poison gas from Putin.

The future is not lost. It resides within all of us.

And the past resides within us all too, and look what the majority of people did with their recent past. Mortgage, second car, Santa ponza for the xmas hols, flat screen HD and :open_mouth: nobody saw this coming.

lots of reference to feudal times in the article and how structures were put in place to create this debt penory society.
He makes no reference to the uprisings that have occurred throughout history where ordinary workers have fought, usually unsuccessful, but fought none the less and given blood and lives against oppressive industrial, economic entities.
It would have rounded the whole article off nicely if he had addreesed this angle, the lack of mass population protests when the gravy train (to good to be true) was coming thru town and everyone wanted on it.

I dont recall any events in the last 20 years worthy of such claims. (bar Anti-globalisation protests)
They people got what the people deserved, twas all gladiators on a Saturday keep the roman citizens happy, football and reality TV and basically the general populace took it up the kyber pass.

now that i’ve broken my long lurking silence on this board, i might as well say what a great article i thought that was.

i posted it on another board and someone remarked that a lot of countries have recovered quickly after default, but they tend to be the countries with large manufacturing / extractive industries. russia falls into that category, as does iceland with its fishing and geothermal energy.

what would we do?