The implosion of Iceland

BenjAii

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/10/creditors_call_time_on_iceland.html

This had kind of been on my radar for a while, but when you just look at the facts it seems so shocking. Makes our own foray into property over excitement seem tame in comparison.

Hard to see where they can go from here, makes me glad were are in the Euro, it is some level of protection.

Tabnabs

http://www.timesonline.co.uk/tol/news/world/europe/article4889832.ece

It's a bumpy ride, Iceland will come out of this battered and bruised but still fighting. Interestingly it may hasten their entry into the EU by a decade or two?

mike65

I thought Kerry Katona had swapped to Aldi when I heard this.

Here are the lethal statistics about Iceland: the value of its economic output, its GDP, is about $20bn; but its big banks have borrowed some $120bn in foreign currencies.

When things were at thier worst here in 86/87 the total state borrowing was x1.3 of GDP and one third of that was Irish money.

Mike

Tabnabs

Banks have borrowed $120billion. Banks, not state.

"For the past three years the state treasury has delivered profits of ISK 283 billion (USD 2.67 billion, EUR 1.89 billion)"

"The government’s new budget bill, presented today, is expected to report on a deficit of almost ISK 60 billion (USD 565 million, EUR 400 million)."

http://icelandreview.com/icelandreview/daily_news/?cat_id=16539&ew_0_a_id=312965

mike65

I know, I was making the point about as bad as things were here, this is soooooooo much worse. The only good news for them is that they are very small, so a bail out of the entire system and state by the EU (for a return of some sort) is at least possible. Whether thier nation pride would stop them is another matter.

Mike

silverharp

As an aside I was in email contact with an investor in Iceland , he moved all his liquid funds into gold a couple of months ago, he is relieved to say the least

10000maniacs

Iceland have no manufacturing economy to speak about, and this is the problem here, they have no way of recouping the massive debts. They have no agricultural sector either, so when their banks reach meltdown, they cannot even be individually self sufficient.

mike65

More on this as "virtual bank" Icesave is about to go bang.

http://news.bbc.co.uk/1/hi/business/7656387.stm

Customers of the Icesave internet bank have been warned they will probably have to claim compensation for money held in their savings accounts.

The authorities in the UK are preparing for the bank's parent in Iceland, Landsbanki, to be declared insolvent.

The Icelandic government took control of the country's second biggest bank on Tuesday to stop it collapsing.

Claims from Icesave's UK customers will be handled by the Financial Services Compensation Scheme (FSCS).

Restructuring work

Under the depositor protection arrangements in Iceland and the UK, the Icelandic authorities will be liable for the first 20,887 euros (£16,300) of compensation.

The UK's FCSC will pay out the rest of the claims, up to the newly introduced ceiling of £50,000 per person.

Never even heard of this crowd, any Irish savers with them I wonder?

Mike

Run_to_da_hills

10000maniacs wrote: »

Iceland have no manufacturing economy to speak about, and this is the problem here, they have no way of recouping the massive debts. They have no agricultural sector either, so when their banks reach meltdown, they cannot even be individually self sufficient.

Iceland Meltdown

quad_red

Run_to_da_hills wrote: »

Iceland Meltdown

I'm glad someone can see the brighter side of things!

Tabnabs

10000maniacs wrote: »

Iceland have no manufacturing economy to speak about, and this is the problem here, they have no way of recouping the massive debts. They have no agricultural sector either, so when their banks reach meltdown, they cannot even be individually self sufficient.

What a wonderful sweeping statement! Iceland is certainly not short of raw materials and exports large amounts of marine and industrial products. If you knew anything of Iceland's long history, you'd know that they are one of the most self sufficient countries on the planet!

eamonnm79

10000maniacs wrote: »

Iceland have no manufacturing economy to speak about, and this is the problem here, they have no way of recouping the massive debts. They have no agricultural sector either, so when their banks reach meltdown, they cannot even be individually self sufficient.

Bizarrely they have just harvested their first small wheat crop. One of the off shoots to global warming.
Its going to be an even longer darker winter for them with all the financial instability.

mike65

Russia has spotted a long term opportunity? Iceland is looking to agree a 4 billion euro bailout, I would have thought a chat with the ECB would have been the first port of call as they are members of the European Free Trade Association (EFTA) and the EEA.

Mike

BenjAii

I think the ECBs only jurisdiction is the eurozone. A place Iceland may decide it wants to be when all this has died down, though I believe a major stumbling block to EU entry for them is fishing quotas as it is still (even more so now probably) a major industry for them.

Media reports say that Russia may be helping them, its not definite. Hard to know what Russia might think is in it for them, given Icelands membership of NATO its hard to see how they could get any military benefit.

Heisenberg.

This post has been deleted.

Run_to_da_hills

The Scientist wrote: »

Iceland don't have a standing army so i doubt its for Military gain.

Incredible example of shit hitting the fan though.

I was reading here in the Guardian about a Car Dealer just outside Reykeyvik selling 120 - 140 Range Rovers a Month last year. Now he's selling none.
http://www.guardian.co.uk/world/2008/oct/05/iceland.creditcrunch


Now might be the time to make them withdraw their claim on Rockall.

Errrr, I think Landrover Ireland only sold one Range Rover last month, about time

Heisenberg.

This post has been deleted.

Brendan552004

The Icelandic Finance Minister was on the radio last night. They asked the US for help and they refused. The Russians have agreed to help them. I understand that one of Iceland's natural resources is uranium, they also hold a lot of oil/gas rights. I visited Iceland a few years ago, it was 13 euro a pint.

mumhaabu

Brendan552004 wrote: »

I visited Iceland a few years ago, it was 13 euro a pint.

A friend of mine was there in 2007 and remarked that it was incredibly expensive and said he was glad when the moved on to Greenland as part of his northern tour. Britain will not be happy about the £4billion pounds effectively robbed from UK savers! Iceland will take decades to recover IMO.

Run_to_da_hills

Brendan552004 wrote: »

The Icelandic Finance Minister was on the radio last night. They asked the US for help and they refused. The Russians have agreed to help them. I understand that one of Iceland's natural resources is uranium, they also hold a lot of oil/gas rights. .

The US probably had no choice, they are already up to their neck debt. I am very surprised that the EU didn't mane a move on the loan and use their uranium deposits as colateral.

Brendan552004 wrote: »

I visited Iceland a few years ago, it was 13 euro a pint.

I believe it is less than e8 a pint for anyone going out there now and is getting cheaper since the arse is falling out of the croner.

10000maniacs

Dyflin wrote: »

What a wonderful sweeping statement! Iceland is certainly not short of raw materials and exports large amounts of marine and industrial products. If you knew anything of Iceland's long history, you'd know that they are one of the most self sufficient countries on the planet!

You are so wrong.
Agriculture and fishing have dropped by 90% in the last 50 years.
Manufacturing has dropped by 20% in the last 20 years.
Commerce, Services and communications have increased by 300% in the last 50 years.
An accident waiting to happen.

lostexpectation

arn't then planing to put an huge industrial plant processing alunium or something at the end of every river in iceland(with hydro plant).

Pgibson

The Scientist wrote: »

Now might be the time to make them withdraw their claim on Rockall.

Iceland is an efficient country which runs like clockwork.

(Reykjavik is the world's cleanest city..Show me a cleaner place!)

If American money pulls out of Ireland it is the Icelandics who will have the last laugh.

Iceland was voted the best country in the world to live in just last year.

See:
http://www.visitreykjavik.is/desktopdefault.aspx/tabid-13/28_read-743/12_view-89/

BenjAii

Pgibson wrote: »

Iceland is an efficient country which runs like clockwork.

What, apart from the national bankruptcy and currency collapse ?

LOL, yes, they're an example to the rest of us.

Run_to_da_hills

Worst scenario, what if Iceland defaulted on this bail out loan and required another one in time to come? Do they effectively become a "servant" to Russia?

Pgibson

BenjAii wrote: »

What, apart from the national bankruptcy and currency collapse ? LOL, yes, they're an example to the rest of us.

The single greatest asset a country can have is the educational level of its people.

Wait another 5 years!

Mark my words... Iceland will ski back.



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eamonnm79

Pgibson wrote: »

The single greatest asset a country can have is the educational level of its people.

Wait another 5 years!

Mark my words... Iceland will ski back.

You gotta speculate to accumulate, but if you do it like a looney just before a world wide recession you are going to feel a large amount of pain.

No one doubts that they are a very capable race but the numbers they are facing are just collosal.

Pgibson

They will have to go back to the old tried and trusted Viking ways.

Their favourite recipe: You first find a half rotten shark on the foreshore.

Then you let it rot even more:

http://video.nationalgeographic.com/video/player/places/culture-places/food/iceland_rottensharkmeat.html

asdasd

Agriculture and fishing have dropped by 90% in the last 50 years.
Manufacturing has dropped by 20% in the last 20 years.

Is that actual production, or the number of people working in the industries. If the latter it is normal.

Tony Broke

eamonnm79 wrote: »

You gotta speculate to accumulate, but if you do it like a looney just before a world wide recession you are going to feel a large amount of pain.

No one doubts that they are a very capable race but the numbers they are facing are just collosal.

Iceland have one huge advantage over most of the rest of the world - a seemingly limitless supply of cheap clean energy (geothermal). While the rest of the world economies may not be in as dire a situation as they are facing right this moment - given time they'll clean up their financial mess and we'll still be going broke trying to buy oil.

What I cant believe is on bbc news they where interviewing someone who blamed the whole thing on 20 - 30 people.That I thought was very strange.

Anyway their isn't any good news for Iceland at the moment.Their currency has effectively collapsed, their largest three banks have failed, and the government doesn't have the money to cover the lost deposits.The Icelandic krona is history and I am very dissapointed with the EU for not helping and the UK are a joke, terror laws wtf.

mumhaabu

Mums gone to Iceland...... to get her life savings back!

phantom_lord

https://www.kitcomm.com/showthread.php?t=24585

sitstill

Would now be a good time to invest in some Icelandic currency then, or will the currency never regain its value?

mumhaabu

sitstill wrote: »

Would now be a good time to invest in some Icelandic currency then, or will the currency never regain its value?

I wouldn't Iceland's currency is doomed and it is only a matter of time before they either join or adopt the Euro as their currency.

Pgibson

Tony Broke wrote: »

Iceland have one huge advantage over most of the rest of the world - a seemingly limitless supply of cheap clean energy (geothermal).

They also have complete control over their very large coastal fisheries area.(The reason they stayed out of the EU.)


.

asdasd

The reason they stayed out of the EU.

You're saying that Iceland's reason for staying outside the EU was fishy?


tell your friends. I am here all week.

Pgibson

asdasd wrote: »

You're saying that Iceland's reason for staying outside the EU was fishy?.

A large factor.

They have fought Cod Wars with Britain in over their fisheries:

http://en.wikipedia.org/wiki/Cod_Wars

They now have a NEW Cod War with Britain:
Cash On Delivery.
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Run_to_da_hills

If people in Ireland thought their budget was bad I can imagine what the upcoming budget would be like for Iceland. :eek:

redroar1942

Just back from a weekend in Iceland and I found the similarities between it and Irealnd frightening.

If it was'nt for our EU membership there would be a green canary in the coalmine.

On the plus side its suddenly become very cheap there, about 33% less then here. A fantastic holiday location that I'd highly recommend, before rampant inflation kicks in that is.

leninbenjamin

redroar1942 wrote: »

Just back from a weekend in Iceland and I found the similarities between it and Irealnd frightening.

why? from an economic perspective our economics are nothing alike...

Pgibson

leninbenjamin wrote: »

why? from an economic perspective our economics are nothing alike...

It's the women who frightened him.

Recent analysis of their Mitocondrial DNA proves that Icelandic women are of Irish descent whereas Icelandic men are Norwegians.

Them-thar Vikings really did steal our women!

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todolist

I believe the EU dictators(the guys who'll make you vote again on Lisbon and give them the result they requested first time) are behind the collapse in Iceland.They seen their chance to force Iceland into the EU and the euro.Norway is next on the hit list.

BenjAii

todolist wrote: »

I believe the EU dictators(the guys who'll make you vote again on Lisbon and give them the result they requested first time) are behind the collapse in Iceland.They seen their chance to force Iceland into the EU and the euro.Norway is next on the hit list.

They went to a lot of trouble didn't they ? Secretly forcing all those Icelandic banks to overextend themselves borrowing money to buy all that stuff and then engineering a global financial crisis to catch them out.

leninbenjamin

todolist wrote: »

I believe the EU dictators(the guys who'll make you vote again on Lisbon and give them the result they requested first time) are behind the collapse in Iceland.They seen their chance to force Iceland into the EU and the euro.Norway is next on the hit list.

why the hell would the EU 'dictators' (by this i presume you mean the democratically elected heads of state?) want another f*cked up economy to join their ranks and add further pressure to the already overstretched EU budget?

quad_red

todolist wrote: »

I believe the EU dictators(the guys who'll make you vote again on Lisbon and give them the result they requested first time) are behind the collapse in Iceland.They seen their chance to force Iceland into the EU and the euro.Norway is next on the hit list.

Yeah...

Pgibson

todolist wrote: »

Norway is next on the hit list.

God help anybody who tries to put oil-rich Norway on any "Hit List".

Norwegians have a reputation for going "berserk".

After all,they gave us the word !

From Icelander Snorri Sturlson's "Ynglinga Saga" :


"Odin's men went to battle without armor and acted like mad dogs or wolves. They bit into their shields and were as strong as bears or bulls. They killed men, but neither fire nor iron harmed them. This madness is called berserker-fury."

Beware!

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