This is the price of not understanding that banking is not a free market. It runs on the
fascist business model, worldwide.
Now poor iceland, devestated by international fascist banking, will descend into the
poverty of Socialism. None of this could have happened if there was gold as money and no
central banks or even worse world banks.
Iceland is a perfect harbinger of what will happen to the west if governments continue to
bail out bankers. The problem was that the failed banks in Iceland were very heavily
leveraged. So leveraged that thier losses when admitted, were six times Icelands GDP.
When Icelands government announced that it would stand behind the banks, the currency
lost most of it's value overnight. Seeing this, people ran to the stores to spend as much as
they could before the stores realized that the money was worth less.
Is the US and Europe too big to suffer the same fate as poor iceland.
OTC derivitives are 1300 Trillion dollars. That is more than tihirty times the combined gdp
of europe and the us by my back of the envelope calculations.
This also has a direct effect on the religious and political. When people have no economic
hope, they often drift into fundamentalism, such as the yes on 8 crowd. Intolera
nce is a hallmark of Fascist regimes that prosper politically during economic disasters
This from John Nadler at Kitco...
hile governments are busy shoring up the remnants of capitalism as we knew it, certain
countries' denizens are equally busy making sure they get rid of the system as fast as you
can say " Sjáumst! " It appears that Iceland has had just about enough of whatever it was
that brought it down from fifth-rank in the world's wealthy nations, to its current
situation. Bloomberg sheds light on the issues facing the country - and they are nothing
short of 'revolutionary.' Not the "Reagan Revolution" mind you:
"More than any of its Nordic neighbors, Iceland under Prime Minister Geir Haarde imbibed
the economic policies of Margaret Thatcher and Ronald Reagan -- state-asset sales, light
regulation and corporate growth abroad through debt. Now that the hangover has arrived,
many of Haarde's countrymen want his Independence Party-led coalition to pay the price
for turning one of the world's wealthiest countries per capita into a beggar state staving
"Many find that the government has mishandled the situation," said Thorvaldur Gylfason, a
professor of economics at the University of Iceland and a former International Monetary
Fund economist. "A major political realignment will take place at the next election," which
must be held by May 2011. That's not soon enough for many of Iceland's 320,000
citizens, as may become clear when the first opinion poll since the country's three biggest
banks collapsed into receivership this month is released on Nov. 1.
"We can never ever have a fresh beginning with the same people," said G. Birnir
Asgeirsson, owner of car retailer Bill.is. "This was such a big bust, they can't get around it.
They can't just move on." Ingibjorg Elsa Bjornsdottir, a 42-year-old geologist from Selfoss
near Reykjavik, said she will vote for the Left Greens, the biggest opposition party.
"There's so much anger in the society now because of what has happened," she said.
"We're witnessing the death of Reaganism-Thatcherism. We have to go back to our older
values. The free market is not doing what it's supposed to be doing." That may be an
understatement. Iceland was ranked fifth- wealthiest in the world per capita in the UN
2007/2008 Human Development Index. Now, it's facing shortages of imports including
food and clothing. Controls on foreign currency payments have been enforced to favor
imports of fuel, medicine and food.
The value of Iceland's currency has evaporated and an economy that outgrew the U.S. and
euro region every year since 2004 at the least faces a prolonged recession, if not a
depression. The economy may shrink more than 10 percent with inflation reaching 75
percent in months, says Danske Bank A/S Chief Analyst Lars Christensen.
The country's main stock index has lost 90 percent of its value, most of it in the past week
or so, more than double the decline in neighboring Nordic countries like Norway and
Sweden. In response, Haarde, 57, and central bank Governor David Oddsson, 60, have
held out the begging bowl, seeking to borrow from Russia and the IMF, which hasn't had
an aid request from a Western country since 1976, when the U.K. sought a bailout.
Steingrimur Sigfusson, leader of the Left Greens, says islanders shouldn't have to wait for
an election. The ruling coalition has 43 seats in the 63-seat parliament and Haarde's term
is scheduled to end in 2011.
"First, we have to take the rescue measures," he said in a telephone interview. "Then we
have to stabilize things. And then there definitely should be an election." Sigfusson
predicts a shift back to more government oversight and regulatory control.
"The main enemy here is the neo-liberal privatization policies," he said. "The big mistake
was to make greed a virtue. The most important thing now is that we can shift the basic
politics in more sensible and more socially just directions so that we can build a
prosperous welfare society."
Looks like you can define freedom in many different ways. Imagine a referendum where
the US citizenry gets to vote a leader out or in, based on the direction of the economy and
the current of national affairs. Wait, they already have that. In fourteen days.