An article on Iceland's financial meltdown and the implications for its creditors

**SpurNation** · 10-09-2009

That's where we stand. Government and finance, like vampires, have combined against the people. Twitting us for having fallen short of pure capitalistic ideals is nothing more than mockery and scorn and evinces, IMHO, a perverse blindness to the ascendancy of real oligarchy, and the ultimate demise of the American republic.

All the while causing people to bicker and complain amongst themselves keeping them at bay so as to continue the mockery that exists today.

Tell me...if it should all fall apart here in this country as we know it today regarding lifestyles and freedoms...where would the people causing the effects have safe haven from those who would surely revolt?

Or would they just systematically eliminate the masses prior to such time?

Because as I see it...it's not going to change...if not continue to get worse.

**mogrovejo** · 10-09-2009

Originally Posted by Winehole23

Bottom line, defaulting financial ins utions and central banks are reducing entire nations to debt peonage. In your cloud-cuckoo land version of "real" capitalism, mogro, government would simply get out of the way. This is unrealistic. The two have already interpenetrated. Our government has colluded with our financial masters to drain off our future productivity, after having destroyed the wealth of the nation in a series of credit bubbles.

Destroyed the wealth of the nation? How so? Do you care to explain what exactly cons utes "the wealth of the nation"? Do you mean airports, highways and that kind of stuff that is held by the state?

What's exactly unrealistic? Yeah, the two have already interpenetrated - and that's obviously a problem. However, I fail to see how the best medicine to such a disease is... increasing the level of interpenetration. Shouldn't it be the exact opposite?

This has been the modus operandis of statism since the late middle-ages: solve the problems created by statism with more statism. Oh damn, we've alllowed the government to become a tool to rent-seekers. Ah, the solution must be to make the government an even bigger tool to rent-seekers!

What's wildly unrealistic is to believe that the ills of the world can be cured. Humans are flawed beings, hence human societies are inherently flawed. There's no perfect uthopian world, only more or less intolerable very concrete worlds. There will always be dishonest, greedy and intelligent people. And some people who have all those 3 traits. No level of government empowerment will change that - not even the totalitarian communist or nazi regimes, with their faith in a "new man", were able to do it. The better (and only) way of discouraging rent-seekers is obviously to make the political power less powerful, not more powerful. Nobody will be interested in colluding with the government if the politicians aren't able to deliver the bacon. Giving the pig to them with the hope that this will prevent them from delivering the bacon to the bad guys is not only immoral, it's a bizarre logic.

Originally Posted by Winehole23

That's where we stand. Government and finance, like vampires, have combined against the people. Twitting us for having fallen short of pure capitalistic ideals is nothing more than mockery and scorn and evinces, IMHO, a perverse blindness to the ascendancy of real oligarchy, and the ultimate demise of the American republic.

Rent-seeking has been going on for ages. Now it's the finance, in the past it was the land oligarchy. There was this exact problem in the Roman Empire, for example. I don't know what are pure capitalistic ideals. I'm generaly su ious of ideals, let alone pure ones.

Originally Posted by DarkReign

More later, busy at work, but this explains my stance on banks, financial ins utions, those who work for them, the IMF, Federal Reserve, et all.

People forget the money and wealth of the nation is the nation's, not a bank, corporation or other en y.

I'm at loss with this "wealth of the nation" stuff. Do you mean in the Adam Smith sense? I can't really understand what do you mean. If you're saying that public goods should be strictly separated from individual property, I completely agree - what belongs to the community as a whole shouldn't be confused to what belongs to a person and vice-versa.

To me, the money belongs to its owner. Do you kn ow who's going to pay Iceland's debt? It's not going to be an abstract concept like the Icelandic nation; it's going to be very concrecete Icelandic individuals (and with very concrete money).

**Winehole23** · 10-13-2009

Originally Posted by mogrovejo

Destroyed the wealth of the nation? How so? Do you care to explain what exactly cons utes "the wealth of the nation"? Do you mean airports, highways and that kind of stuff that is held by the state?

It destroyed the wealth of families. Massive malinvestment and overleveraging (enabled by cheap money policies and assymmetries of information) in one sector led to a bust which dragged all other asset categories down, ruined the financial security of baby boomers approaching retirement, put millions of Americans out of work and caused us to put our future public prosperity in hock to keep private wealth from defaulting now.

What's exactly unrealistic? Yeah, the two have already interpenetrated - and that's obviously a problem. However, I fail to see how the best medicine to such a disease is... increasing the level of interpenetration.

I don't think I suggested any such thing. What I did suggest is that disentangling the two isn't easy at all, and that the doctrinal insistence that the two should ideally be separate in essence mocks the citizen standing before an actually existing oligarchy.

This has been the modus operandis of statism since the late middle-ages: solve the problems created by statism with more statism. Oh damn, we've alllowed the government to become a tool to rent-seekers. Ah, the solution must be to make the government an even bigger tool to rent-seekers!

That's right. That's exactly what I meant by emphasizing the predatory combination of government and financial elites against taxpayers.

What's wildly unrealistic is to believe that the ills of the world can be cured. Humans are flawed beings, hence human societies are inherently flawed. There's no perfect uthopian world, only more or less intolerable very concrete worlds.

Yet, you seem to believe in a status naturalis for capitalism. Get government out of the way and -- voila' -- TBTFs, the banking sector and everything else "will take care of themselves."

The better (and only) way of discouraging rent-seekers is obviously to make the political power less powerful, not more powerful. Nobody will be interested in colluding with the government if the politicians aren't able to deliver the bacon. Giving the pig to them with the hope that this will prevent them from delivering the bacon to the bad guys is not only immoral, it's a bizarre logic.

I agree completely. Well, almost completely.

If central banks and key players in key industries have been allowed to socialize their losses (and thereby lay claim to the nation's future prosperity) after they their own bed, to whom does it fall to protect the interest of the citizen, the taxpayer?

Rent-seeking has been going on for ages. Now it's the finance, in the past it was the land oligarchy. There was this exact problem in the Roman Empire, for example.

Except the roles are reversed. The rent seeker is a creature dependent on the government; in this case, our government appears to be subservient to the rent-seekers.

To me, the money belongs to its owner. Do you kn ow who's going to pay Iceland's debt? It's not going to be an abstract concept like the Icelandic nation; it's going to be very concrecete Icelandic individuals (and with very concrete money).

Private debts were socialized at the behest of the EU. Surely you're not for that?

**Winehole23** · 12-02-2013

update:

Iceland’s government has announced that it will be writing off up to 24,000 euros ($32,600) of every household’s mortgage, fulfilling its election promise, despite overwhelming criticism from international financial ins utions.
The measure was introduced by the country’s prime minister, Sigmundur David Gunnlaugsson, the leader of the Progressive Party which won the late-April elections on a promise of household debt relief.
According to the government’s website the household debt will be reduced by 13 percent on average.

Citizens of Iceland have been suffering from debt since the 2008 financial crisis, which led to high borrowing costs after the collapse of the krona against other currencies.

“Currently, household debt is equivalent to 108 percent of GDP, which is high by international comparison,” highlighted a government statement, according to AFP. "The action will boost household disposable income and encourage savings.”
The government said that the debt relief will begin by mid-2014 and according to estimates the measure is set to cost $1.2 billion in total. It will be spread out over four years.

The financing plan for the program has not yet been laid out. However, Gunnlaugsson has promised that public finances will not be put at risk. It was initially proposed that the foreign creditors of Icelandic banks would pay for the measure.
International organizations have confronted the idea with criticism. The International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) have advised against it, citing economic concerns.
Iceland has “little fiscal space for additional household debt relief” according to the IMF, while the OECD stated that Iceland should limit its mortgage relief to low-income households.

In the meantime, ratings service, Standard & Poor's, cut back on its outlook for Iceland's long-term credit rating to negative from stable, stating that the economic measure could affect the confidence of foreign investors if it ends up being paid for by the existing creditors of Icelandic banks.

http://rt.com/news/iceland-debt-relief-measure-535/

**Winehole23** · 12-02-2013

related threads:

http://www.spurstalk.com/forums/showthread.php?t=191754
http://www.spurstalk.com/forums/showthread.php?t=202629

**mouse** · 12-03-2013

Is there any truth to this mans video?

**Winehole23** · 12-03-2013

you tell me, Mouse, is there?

**ElNono** · 12-03-2013

If the IMF is against it, you're probably on the right track, tbh...

**boutons_deux** · 12-03-2013

Originally Posted by mouse

Is there any truth to this mans video?

Nothing in those points clashes with what I read at the time.

Iceland bailed out the country and people, its economy, and prosecuted the corrupt, fraudulent bankers/financial sector. Exactly the opposite of what the US govt and Fed did, and the US people are still suffering. Iceland's population is about 1/6 the size of metro San Antonio.

iow, democracy in Iceland works, where democracy in USA is just another American myth to feed to the fat-assed, TV-watching sheeple.