From the U.K. Telegraph, this wonderful example of how to solve a debt crisis: let the banks fail.
As you read this, please understand the “recovery” model that is being put forward, and supported by politicians of all stripes, for the U.S. That model is this: endless free money and bonuses for the banks, and austerity for everyone else. It is not enough that the banks succeed, everyone else must fail. Only in this manner, by putting the middle class deeper in debt to bail out the banks, while those very same banks seize homes, businesses, and lives, can the banks wind up owning everything in sight. This includes your children.
Bold Iceland decided to tell the banksters to pack sand and has let their overextended, overleveraged, poorly managed, probably fraud-ridden but certainly dead banks…die. I cannot find anywhere it is written that a nation’s people must come to the aid of stupid private banks, no matter how large. Too big to fail means too big to exist. Period. Iceland resisted ferocious pressure from the international banking community to make Icelanders pay for Iceland’s failed banks. Iceland rightly refused. That was a scant two years ago.
Now to the article, which compares Iceland to Ireland. As I have reported, the hated IMF is trying to sink its fangs into the Celtic Tiger, demanding that Ireland put up national assets like its national pension fund (Cash! Woo Hooo!) as collateral for loans to bailout the Irish banksters, and raise taxes to pay for the loans.
- Iceland has finally emerged from deep recession after allowing its currency to plunge and washing its hands of private bank debt, prompting an intense the debate over whether Ireland might suffer less damage if adopted the same strategy.
- The Nordic economy grew at 1.2pc in the third quarter and looks poised to rebound next year. It ends a gruelling slump caused largely by the “New Viking” antics of Landsbanki, Glitnir and Kaupthing, the trio of lenders that brought down Iceland’s financial system in September 2008.
Please follow the link above and read the whole thing. Your children do not have to be put into everlasting debt to bail out stupid criminal banks.
- “In the event, the recession has proved shallower than expected, and Iceland’s growth decline of about minus 7pc in 2009 compares favorably against other countries hard hit by the crisis,” said Mark Flanigan, the IMF’s mission chief for the country.
Isn’t that interesting? “Shallower than expected.” The world didn’t come to an end. Martial law wasn’t declared. No CONgressmen were threatened with tanks in the streets. Iceland took a serious hit and is now actually recovering. The banks were closed by the government, investors who had stupidly trusted them took massive losses as bad assets were written down, and then, as if by some miracle, the economy began functioning again. This is the way it works: the economy cannot recover until it has real information to use. Real information is being hidden by the private bank known as the “Federal Reserve,” which is not federal and has no reserves. Wise investors will not invest as long as the true condition of financial assets is hidden / unknown. Capital goes into hiding and stays there. So the economy stagnates, unemployment lingers at intolerable levels, and bank-owned politicians rescue us with another year of unemployment benefits and the debt that goes along with it.
- Iceland’s president, Olafur Grimsson: “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 should not shoulder the responsibility,” he said.
One final thought: here are Icelanders outside their national parliament, the Althing, insisting that their government not bail out the banks:
