We’ve all heard the jokes – six months and an ‘r’, Reykjavik-on-the-Thames etc.
Michael Hudson, a balance of payment economist ex-off Chase Manhattan, Arthur Anderson and the UN, discusses Iceland’s desperate predicament – huge foreign debts their banks can’t repay and creditors determined to leech all they can from the country and it’s people. He regards their situation as nothing short of financial war, it’s the stuff of nightmares, and one wonders, with the banking guarantee and NAMA – are we next?
Hat tip Green Bear @ thepropertypin
Iceland is under attack not militarily¬ but financially. It owes more than it can pay. This threatens debtors with forfeiture of what remains of their homes and other assets. The government is being told to sell off the nations public domain, its natural resources and public enterprises to pay the financial gambling debts run up irresponsibly by a new banking class. This class is seeking to increase its wealth and power despite the fact that its debt-leveraging strategy already has plunged the economy into bankruptcy. On top of this, creditors are seeking to enact permanent taxes and sell off public assets to pay for bailouts to themselves.
Being defeated by debt is as deadly as outright military warfare. Faced with loss of their property and means of self-support, many citizens will get sick, lead lives of increasing desperation and die early if they do not repudiate most of the fraudulently offered loans of the past five years. And defending its civil society will not be as easy as it is in a war where the citizenry stands together in coping with a visible aggressor. Iceland is confronted by more powerful nations, headed by the United States and Britain. They are unleashing their propagandists and mobilizing the IMF and World Bank to demand that Iceland not defend itself by wiping out its bad debts. Yet these creditor nations so far have taken no responsibility for the current credit mess. And indeed, the United States and Britain are net debtors on balance. But when it comes to their stance vis-à-vis Iceland, they are demanding that it impoverish its citizens by paying debts in ways that these nations themselves would never follow. They know that it lacks the money to pay, but they are quite willing to take payment in the form of foreclosure on the nations natural resources, land and housing, and a mortgage on the next few centuries of its future.