Iceland’s President said his country is better off

[midwesterner (banned)]

Iceland’s President said his country is better off
www.bloomberg.com/news/2010-11-26/iceland-faring-much-better-after-permitting-banks-to-fail-grimsson-says.html

Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued.

“The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”

“Iceland is faring much better than anybody expected,” Grimsson said. How far can we ask ordinary people -- farmers and fishermen and teachers and doctors and nurses -- to shoulder the responsibility of failed private banks,” said Grimsson. “That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.”

[midwesterner (banned)]

Icelanders don't need EU membership and they don't want it - Nigel Farage MEP


2010-12-17
Bust Is Better Than a Bailout, Iceland Is Better Off Than Ireland [Updated]
realitylenses.blogspot.com/2010/12/bust-is-better-than-bailout-iceland-is.html

Here are some reports and opinions about why Ireland (and Greece, and all the other countries lining for IMF/EU/etc. bailout) should default instead of mortgage their country and the next generations. Iceland Is No Ireland as State Kept Free of Bank Debt

Nov. 26 (Bloomberg) -- Iceland’s President Olafur R. Grimsson [...] said “The difference is that in Iceland we allowed the banks to fail,” [...] “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”
[...]
As a consequence, “Iceland is faring much better than anybody expected,” Grimsson said. The Icelandic state’s liability on foreign depositor claims stemming from Icesave accounts at failed Landsbanki Islands hf should be put to a national referendum, he said.

“How far can we ask ordinary people -- farmers and fishermen and teachers and doctors and nurses -- to shoulder the responsibility of failed private banks,” said Grimsson. “That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.”

Punish the Bankers! - Iceland 45 seconds in.

Punishing people that have been directly implicit in setting off a global financial crisis has been a trend seen across Europe. Rogue trader Jerome Kerviel, responsible for one of the biggest banking frauds ever, was sentenced to at least three years in prison and ordered to pay back the nearly $7 billion that he lost for his bank. It's intended to be a stern message to French banks and traders that irresponsible and risky trading and financial irregularities won't be tolerated. And back in May, Iceland took similar measures. And yet in America, you don't see bankers arrested, instead you see them getting bailed out.

[midwesterner (banned)]

Nigel Farage: Euro Empire Collapsing 1:50 into video


So point being is if rest of the world follow Icelands example, and refuse bailouts, default without using the debt based currency of the banking cartel, we would all be better off.

[neohguy]

I'm surprised by the number of people that confuse a sovereign bailout with yet another banking bailout. It's kind of like telling an insolvent/jobless consumer to continue making credit card payments on a card that will never be paid off because if he claims bankruptcy then his credit would be ruined.

[poorandugly]

Dec 21, 2010 12:40:19 GMT -5 @poorandugly said:

It's kind of like telling an insolvent/jobless consumer to continue making credit card payments on a card that will never be paid off because if he claims bankruptcy then his credit would be ruined.

That line of thinking is very popular and real still today in much of America. What the hell does a credit score matter when the last thing you can afford to do is take on more debt at this point. I understand the exceptions of finding a place for rent etc.. But does that even matter now when you have no money to pay for anything now because you are destitute or impoverished??

[Virgil Showlion]

abcd

[traelin0]

Yay, Virgil is here!

[Virgil Showlion]

...and using a "backwater" thread to test his thread-porting bot.

[The Virginian]

Yeah Iceland!

I'm all for the Underdogs!

[comokate]

I've been to Iceland on several occasions and it is a land not only of "Fire and Ice" but of resourceful people as well.
Resourcefulness is always a key component to survival.

[midwesterner (banned)]

Portugal bailout talk hits stocks, euro

finance.yahoo.com/news/Portugal-bailout-talk-hits-apf-72376828.html?x=0

LONDON (AP) -- Europe's debt crisis returned to the fore of investor concerns on Monday amid reports Portugal is facing mounting pressure to accept an aid package to prevent contagion to other countries.

Stocks in Europe have fallen sharply as Portugal's market borrowing rates have jumped higher in the wake of the renewed bailout talk.

Analysts said there are distinct echoes of what went on with Ireland just a couple of months ago. Before Ireland was forced to accept a rescue from its partners in the European Union and the International Monetary Fund, there were numerous reports suggesting that Germany, in particular, was pressuring Dublin to take the funds to stop the crisis spreading. The Irish government also insisted it didn't need any help before eventually accepting a euro67.5 billion bailout.

"It therefore seems reasonable to suppose that events will move rapidly this week as the authorities work to put together a credible support mechanism," said Simon Derrick, a senior analyst at Bank of New York Mellon. "A failure to do so would, of course, send an extremely negative message to the markets."

Finance ministers of the 17 countries that use the euro are set to meet next Monday in Brussels. Before then, however, is Wednesday's Portuguese bond auction, which will be a key test of investor sentiment.

Pressure on Portugal heightens amid bailout fears

news.yahoo.com/s/ap/20110110/ap_on_bi_ge/eu_europe_financial_crisis

LISBON, Portugal – Europe's debt crisis looked increasingly likely to claim another victim on Monday, as Portugal's borrowing rates spiked to euro-era highs amid reports Germany and France are pushing it to accept outside help and prevent contagion to other countries.

"Germany is not pressuring anyone, and has not pressured anyone in the past," German government spokesman Christoph Steegmans said. The French government declined to comment.

Even though Portugal denies it needs a rescue, analysts said there are distinct echoes of what went on with Ireland just a couple of months back.

Before Ireland was forced to accept a rescue from its partners in the European Union and the International Monetary Fund, there were numerous reports suggesting that Germany, in particular, was pressuring Dublin to take the funds to stop the crisis spreading. The Irish government also insisted it didn't need any help before eventually accepting a euro67.5 billion ($87.5 billion) bailout.

The prevailing view in the markets is that Europe may be able to support Portugal but that a bailout of Spain would test the limits of the existing bailout fund, potentially putting the euro project itself in jeopardy if governments don't put up more cash.

Spain accounts for around 10 percent of the eurozone economy, compared with Greece, Ireland and Portugal, which account for only around 2 percent each.

So the Euro Crisis is again on the front page. We are seeing the Euro die a slow death. When other nations like Spain and Italy ask for bailouts and none is to be left, I would guess the IMF, World bank, or funneled money from the USA federal reserve may be used.

I post this under Iceland because it is a lesson show from past articles I've posted that this crisis could not be any worse if these nations default and return to their native currencies. It would wipe out debt, give them a fresh start, and though hard transition would help them get back on their feet instead of piling on more and more debt to countries that have shown they can't pay them back.

My hope is that people in Europe take a good look at Iceland, and learn from what they are doing. They may not be back on their feet completely, but are doing better without the debt ridden bailouts they have choosen not to take from the international banking cartel.

[midwesterner (banned)]

Iceland's Economic Recovery A Lesson For Ireland

www.grapevine.is/News/ReadArticle/Icelands-Economic-Recovery-A-Lesson-For-Ireland

A new article in The Economist argues that Ireland could learn something from Iceland on how to handle financial difficulties.

The Economist points out, for one, that on the Misery Index (unemployment plus inflation), Iceland's level of "misery" has been steadily declining, and this year went below Ireland's, which is on its way up.

"Evidence of economic recovery in Iceland means the Irish can no longer persuade themselves that things are worse elsewhere," the article says in part. "Figures released on December 7th showed that Iceland’s GDP rose by 1.2% in the third quarter (Ireland’s third-quarter GDP rose by 0.5%, according to figures published on December 16th). The Icelandic central bank’s benchmark interest rate has fallen to 4.5%, from a peak of 18%. The halving of the dollar value of the Icelandic krona at the height of the crisis pushed inflation as high as 18.6%. It has since fallen close to the central bank’s 2.5% target. The 'misery index', a crude grading that sums unemployment and inflation rates, suggests Iceland is now doing better than Ireland (see chart)."

The reason for this, the Economist argues: letting the banks fail, and not being a part of a larger currency.

On the first point, the article says that by not pouring public money into trying to rescue its banks, Iceland saved itself revenue that would have been tied up in them. Ireland has attempted to save its banks, but has yet to see any benefit from doing so.

At the same time, the euro is no longer seen as the magic solution to economic troubles, the articles states. "When panicky investors were rushing out of small currencies in the autumn of 2008, the euro seemed a haven. There was much talk in Iceland of fast-tracked membership of the European Union and, ultimately, the euro. Two years on, the euro looks more like a trap for countries struggling to regain export competitiveness. Greece and Ireland have lost the confidence of markets, even though both issue bonds in euros. Iceland’s voters are cooler about joining the EU and the euro."

Not that either strategy is without its faults, of course. Iceland did not attempt to save its banks because it could not: the banks were several times greater than the GDP at the time of the crash. Furthermore, the article speculates that Icelanders might be more open to the euro if the economy of the EU were in better shape."Even so, that Iceland’s economy has done little worse than Ireland’s is still a triumph," the article concludes. "It has been tough with its creditors and disregarded some international norms—and recovered. Ireland has stood by its banks to the benefit of the wider European banking system. Its reward has been 'rescue' loans at an interest rate that makes it hard to fix its finances. The next Irish government may look at Iceland and decide to play hardball with Europe."

[neohguy]

We had a thread on the old MT board about Iceland awhile ago. Some posters said that Iceland should refuse to pay the debt to bond speculators. Other posters said that not paying would ruin Iceland. Turns out the former was correct.
I have a friend that is a personal bankruptcy attorney. She said that when a person finds themselves in debt and unable to repay then they should claim bankruptcy, the faster the better, and avoid getting into that pickle again. I guess the same would apply to sovereign debt that can't be repaid:
dailyreckoning.com/a-word-of-advice-to-financial-authorities/
A Word of Advice to Financial Authorities

By Bill Bonner

....We’re not in the habit of giving advice here in The Daily Reckoning...Still, in the spirit of civic betterment, today exceptionally, we offer a bit of advice to financial authorities all over the world. In a word:
Default!

When you have more debt than you can pay, it is always best to own up…default…hang your head…say you’re sorry…promise not to do it again…

…and go about your business. And do it as soon as possible....
Again, governments in the Old World have borrowed and promised too much. But rather than default honestly and openly, (forcing the people who lent imprudently to take the losses) they try to put the burden of the losses onto the innocent citizen…and the unenlightened investor.

He will pay higher taxes. He will get less in services. His money…his savings…his pension – all will be devalued by inflation. If he has stocks…they too will likely be sold off in the financial crises to come.

But let’s look at another, more recent example. Iceland
You may remember, two years ago Iceland was a mess. Its banks had borrowed, lent, and speculated recklessly. Iceland’s feds squirmed and winced. At first, the government decided it would do what Ireland was doing. It would rescue the banks…that is, it would bail out the banks’ lenders with public funds.

But when the public caught on to what was going on, a referendum was held. Voters rejected the bailout as if they were voting against sin itself. More than 90% of voters cast ballots against a taxpayer bailout. We were impressed. We wrote about it. The “Patsy Revolt of 2009” we called it.

Unable to stick the voters with the losses, the government left the banks to default.

Was this the end of the world? Did Iceland slip below the North Atlantic waves…joining the Titanic on the chilly, dark bottom of the sea? Did commerce break down? Did the Icelandic money become worthless? Was this the “end of time”…the apocalypse forecast in the Bible?

Nope.

“Iceland is doing better than anyone could have hoped,” reports Bloomberg.

Inflation fell from 18% down to 5% last year. The cost of insuring Icelandic debt fell to less than a third of the price in early 2009. Unemployment is barely 6%.

“Thanks to its rescue plan,” says the IMF, “the recession in Iceland has been less deep than expected and not worse than in the other countries deeply affected.”

How did they achieve this? Are the Icelanders smarter than the Europeans?

Not exactly. They tried the typical dead-end solution. The trouble was, no one would lend Iceland more money. And once the public revolted, after realizing that it would be left holding the bag, the Icelandic feds had no choice. They had exhausted all the bad ideas. They were forced to go with a good one.

The foreign debt was consolidated into a few banks…which then went broke. The remaining banks were left intact, ready to keep the country’s financial machinery in business.

Lesson learned: got too much debt? Default quickly. Make it clean. Make it fast. Make it work.

There. That’s all the advice we’re going to give today. Any European or American government that would like more details could contact us on our mobile phone…if we had one.

[neohguy]

www.lyricsfreak.com/b/bob+seger/beautiful+loser_20021911.html

"....Beautiful loser
Never take it all
'Cause it's easier
And faster when you fall

You just don't need it all
You just don't need it all
You just don't need it all
Just don't need it all"

[midwesterner (banned)]

Great find Neo!! Iceland is a gem of hope for the rest of us. I think watching how they get through this and handle the situation is something for all nations to learn from.

[midwesterner (banned)]

In Reguards to Iceland Watch 15 minutes into this video. Iceland has proven it's doing better now.

[kman]

Interesting success story of recovery. Curious to know if gold is a hot item there. My guess would be no.