Our coverage of the Iceland meltdown continues.
As you’ll recall, the three major banks in tiny Iceland (Glitnir, Kaupthing, Landsbanki) went on a borrowing and derivative-fueled lending spree. Icelandic banks opened bank branches in the EU and took deposits from mostly Britain and Netherlands. The deposits were used to fuel a real estate lending boom. A few insiders got rich, and then the real estate prices stopped climbing and the whole Ponzi scheme blew up. Sound familiar? Europe demanded Iceland taxpayers pay back UK and Netherlands depositors, which of course is impossible for Iceland, a nation of 300,000 people, but also completely unjust and baseless. Why do citizens have to pay for the stupidity and greed of the bankers? Where is that rule written? I don’t remember it.
The false economic bubble in Iceland had encouraged Icelanders to buy homes, start businesses, and generally malinvest. Now, their economy is dead, they are losing their homes to the banks, and their currency is nearly worthless internationally, having fallen 60% or more in purchasing power. They are forced to borrow from the hated International Monetary Fund, whose lending practices I would compare to organized crime loan sharks, but that would be insulting to the loan sharks.
This is your future unless you do something about it. The script goes like this. The U.S. is already well on its way down this road:
– the bankers blow financial bubbles and get rich
– the bankers blow up the economy
– the bankers get bailed out with taxpayer money and get to keep their wealth
– the unwashed masses suffer unemployment, falling lifestyles, loss of homes, and loss of savings through currency destruction
– other bankers come in with government loans to pay for the bailouts, to be paid by the now-unemployed, broke and homeless unwashed masses
– bankers laugh all the way to the bank
– lather, rinse, repeat
Icelanders, a national community small enough to share information with each other and not have to rely on big media conglomerates, aren’t standing for it.
- Protesters took to the streets of Reykjavik today, forcing MPs to run away from the people they represent as renewed anger about the impact of the financial crisis erupted in Iceland.
- The violent protest came amid growing fury at austerity measures being imposed across Europe. Disruption in more than a dozen countries this week included a national strike in Spain and a cement truck driven into the Irish parliament’s gates.
- Witnesses said up to 2,000 people caused chaos at the state opening of the Icelandic parliament, with politicians forced to race to the back door of the building because of the large number of protesters at the front. Eggs were said to have hit the prime minister, Jóhanna Sigurðardóttir, other MPs and the wife of the Icelandic president, Ólafur Ragnar Grímsson.
- Birgitta Jónsdóttir, one of three MPs to join the protesters, said: “There is a realisation that the IMF is going to wipe out our middle classes.”