Iceland
-
jessejames
- mnml mmbr
- Posts: 414
- Joined: Sun Dec 10, 2006 1:38 am
- Location: windblown
- Contact:
I read this story from Craigslist
very sobering indeed
[url]ttp://losangeles.craigslist.org/sfv/pol/869150472.html[/url]
Currency of Iceland Crash and Burn worth nothing now
Reply to: see below
Date: 2008-10-06, 4:49PM PDT
This is a diary of messages spanning one week from a friend of mine in Iceland. This illustrates how fast a currency crash can occur. And Iceland had one of the lowest national debts in the entire world.
Something to think about
Sep 30
Our countries currency is just dying right now, 20% inflation looming.
It crashed 4% yesterday, and over 5% today
From the upper 50 levels to now the 110 levels TODAY.
Which means we need 110 ISK to buy 1 dollar, instead of just 1 year ago we needed 58 ISK to buy 1 dollar
Gold has saved me a little, but still, I get paid in ISK
The crash of my nations currency continues, 4.
26% today, 5% tuesday, and over 4% monday 1 USD gone from 60 ISK to over 110 ISK today
People are scared shitless.
A lot of people took out loans in foreign currency, which is extremely stupid to do when your income is in ISK
For some people who did this, their monthly payment has doubled!
Our mortgages are also inflation-bound, and when our currency crashes like this it shows up in inflation numbers because we import almost everything we need.
Inflation will be hitting 20% soon, and that means 20% increase in monthly payment of mortgages
We're going to see massive number of bankruptcies, layoffs etc
The Icelandic bubble has burst with horrendous consequences
This reminds me of the quote:
"Everyone loves an early inflation. The effects at the beginning of inflation are all good. There is steepened money expansion, rising government spending, increased government budget deficits, booming stock markets, and spectacular prosperity, all in the midst of temporary stable prices. Everyone benefits, and no one pays. That is the early part of the cycle. In the later inflation, on the other hand, the effects are all bad. The government may steadily increase the money inflation in order to stave off the later effects, but the latter effects patiently wait. In the terminal inflation, there is faltering prosperity, tightness of money, falling stock prices, rising taxes, still larger government deficits, and still soaring money expansion, now accompanied by soaring prices and the ineffectiveness of all traditional remedies. Everyone pays and no longer benefits.
That is the full cycle of every inflation
Oct 01
The reserves of the central bank are drying up
We cannot take new loans to increase the reserves, the interest rates are too high and all loan markets are frozen
There are also many big payment days due in the next 2-4 months, which means foreigners have a demand on us to deliver foreign currency.
These are loans we're paying back
I'm in contact with a person that worked at the IMF for decades, and he has told me personally that the situation is hopeless for us. We're going to see over 100% inflation annually, at least.
Real risk we need to default, Argentine style
At least America can simply print dollars to pay off their loans, we cannot
>The $700 billion bailout bill was 5% of GDP of USA, but the takeover of one of our bank that failed required 6% of our GDP... and it didn't even go through the parliament
Oct 02
Reserves of the Icelandic central bank are drying up quicker then before
CEO of one of the largest gasoline seller says that Iceland will not be able to buy oil within a month, no more dollars
Government is in a crisis mode.
With meetings during night with the banks and the central bank
People are starting to stock up on food. (I have partially)All the economists and experts are saying that there is no hope for us.
They all condemn the central bank for not increasing the reserves during the boom years
I saw a report that the Icelandic krona was #3 on the list over currencies that have dropped the most in this year.
Zimbabwean dollar was #1, and the Turkmenistan manana was
#2 Personally I see only two solutions to save our asses
1. Seek emergency entry into the E.U.
, and start using the euro
2.
Seek emergency help from central banks of the Scandinavian countries, or any willing central bank
Fiat money really destroys nations. I condemn it. Too bad nobody understands why these things are happening. They blame free markets and capitalism.
Best regards from Iceland
News from Iceland
We had run on the banks today.
Foreign currencies are rationed, one of the big banks has almost run out of dollars and euros Representatives from the IMF are here
Expect a Argentine-style takeover by IMF over Iceland's finances
I've already sold all my ISK that I had left over and bought euros. Too bad they are still in the bank. I acted too late.
Hopefully it will open on monday
(I don't think it will!)
Oct 05
I'm getting scared
No news from the government.
Only few comments have leaked out, and they seem to indicate the government is in disarray, and no solution will be ready by tomorrow, when markets open
If that is the case, we're in effect bankrupt
People are dumping their money, and I heard news from a person that went to the largest supermarket here in Iceland that shelves looked empty, and almost all the meat is sold out
Oct 05
The prime minister spoke 2 hours ago.
He said this was the most serious depression since 1914, more serious than the Great Depression
When he was done speaking, I drove to the supermarket (which was closing in 30 min) at illegal speeds, and filled a big shopping cart as much as I could of those goodies TV posted... it was STUFFED... I had to hold the goods so they wouldn't fall out of the cart! Cost me a lot.
But it's going to cost a lot more very soon
Needless to say, the PM was very gloomy, and offered no solutions
Scandinavian central banks are said to have refused our request for help
Oct 05
Already we're seeing companies that sell and transport food being denied loans and credit.
This means that big importers and sellers of food will run out cash to operate
The supply chain of food is breaking down all over the world because of the credit crisis!
I'm going to be stocking up as long as I can on durable goods
Ok, time for the positive post
We have:
- Energy... so I'm not worried about electricity
Water... we have clean water in our sinks
Heating... hot water flows through the buildings keeping them warm
Thankfully we put in place restrictions on import of foreign meat, and subsidized our farmers, so we have:
- Cows... meat, and a lot of milk!
- Lambs, sheep... a lot of meat!
- Horses... for transportation... and meat!
- Pigs... mmm... bacon!
- Chickens... yea, we got those also! That means eggs and meat
Lots of fish, I mean lots!
We do grow vegetables and fruits also, in greenhouses.
Maybe there will be shortages, and it will rationed, but I think it will be enough for everybody
In a way, we do have enough to live.
But the transition from being able to eat anything all over the world (4,000 miles Caesar salads is history) is going to be tough
Oct 06
Icelandic crown hits record low, down 7pct on the day
We're not even told about this. We need to read this in foreign news media.
The Icelandic Central Bank has "frozen" the currency exchange rate (even though it hasn't been announced), so we still see the Euro priced at 154 ISK, even though it's at 174 ISK
My currency has dropped 25% today
Run on the Icelandic banks in the UK.
The website of Landsbankinn crashed today, but once it was up again people were unable to withdraw their money
Glitnir and Landsbankinn has put a stop to selling of their funds and pools
Oct 06
60% drop in my currency today...
I feel very shaken up
Oct 06
Game over for Iceland
The prime minister addressed the nation just now:
- All the banks are bankrupt
New draconian laws are being approved to give the government absolute authority over the financial system
What this means is basically, we will let the banks fail and will not bail them out.
And the government will pick up the remains and put together a working banking system
END TRANSMISSION
very sobering indeed
[url]ttp://losangeles.craigslist.org/sfv/pol/869150472.html[/url]
Currency of Iceland Crash and Burn worth nothing now
Reply to: see below
Date: 2008-10-06, 4:49PM PDT
This is a diary of messages spanning one week from a friend of mine in Iceland. This illustrates how fast a currency crash can occur. And Iceland had one of the lowest national debts in the entire world.
Something to think about
Sep 30
Our countries currency is just dying right now, 20% inflation looming.
It crashed 4% yesterday, and over 5% today
From the upper 50 levels to now the 110 levels TODAY.
Which means we need 110 ISK to buy 1 dollar, instead of just 1 year ago we needed 58 ISK to buy 1 dollar
Gold has saved me a little, but still, I get paid in ISK
The crash of my nations currency continues, 4.
26% today, 5% tuesday, and over 4% monday 1 USD gone from 60 ISK to over 110 ISK today
People are scared shitless.
A lot of people took out loans in foreign currency, which is extremely stupid to do when your income is in ISK
For some people who did this, their monthly payment has doubled!
Our mortgages are also inflation-bound, and when our currency crashes like this it shows up in inflation numbers because we import almost everything we need.
Inflation will be hitting 20% soon, and that means 20% increase in monthly payment of mortgages
We're going to see massive number of bankruptcies, layoffs etc
The Icelandic bubble has burst with horrendous consequences
This reminds me of the quote:
"Everyone loves an early inflation. The effects at the beginning of inflation are all good. There is steepened money expansion, rising government spending, increased government budget deficits, booming stock markets, and spectacular prosperity, all in the midst of temporary stable prices. Everyone benefits, and no one pays. That is the early part of the cycle. In the later inflation, on the other hand, the effects are all bad. The government may steadily increase the money inflation in order to stave off the later effects, but the latter effects patiently wait. In the terminal inflation, there is faltering prosperity, tightness of money, falling stock prices, rising taxes, still larger government deficits, and still soaring money expansion, now accompanied by soaring prices and the ineffectiveness of all traditional remedies. Everyone pays and no longer benefits.
That is the full cycle of every inflation
Oct 01
The reserves of the central bank are drying up
We cannot take new loans to increase the reserves, the interest rates are too high and all loan markets are frozen
There are also many big payment days due in the next 2-4 months, which means foreigners have a demand on us to deliver foreign currency.
These are loans we're paying back
I'm in contact with a person that worked at the IMF for decades, and he has told me personally that the situation is hopeless for us. We're going to see over 100% inflation annually, at least.
Real risk we need to default, Argentine style
At least America can simply print dollars to pay off their loans, we cannot
>The $700 billion bailout bill was 5% of GDP of USA, but the takeover of one of our bank that failed required 6% of our GDP... and it didn't even go through the parliament
Oct 02
Reserves of the Icelandic central bank are drying up quicker then before
CEO of one of the largest gasoline seller says that Iceland will not be able to buy oil within a month, no more dollars
Government is in a crisis mode.
With meetings during night with the banks and the central bank
People are starting to stock up on food. (I have partially)All the economists and experts are saying that there is no hope for us.
They all condemn the central bank for not increasing the reserves during the boom years
I saw a report that the Icelandic krona was #3 on the list over currencies that have dropped the most in this year.
Zimbabwean dollar was #1, and the Turkmenistan manana was
#2 Personally I see only two solutions to save our asses
1. Seek emergency entry into the E.U.
, and start using the euro
2.
Seek emergency help from central banks of the Scandinavian countries, or any willing central bank
Fiat money really destroys nations. I condemn it. Too bad nobody understands why these things are happening. They blame free markets and capitalism.
Best regards from Iceland
News from Iceland
We had run on the banks today.
Foreign currencies are rationed, one of the big banks has almost run out of dollars and euros Representatives from the IMF are here
Expect a Argentine-style takeover by IMF over Iceland's finances
I've already sold all my ISK that I had left over and bought euros. Too bad they are still in the bank. I acted too late.
Hopefully it will open on monday
(I don't think it will!)
Oct 05
I'm getting scared
No news from the government.
Only few comments have leaked out, and they seem to indicate the government is in disarray, and no solution will be ready by tomorrow, when markets open
If that is the case, we're in effect bankrupt
People are dumping their money, and I heard news from a person that went to the largest supermarket here in Iceland that shelves looked empty, and almost all the meat is sold out
Oct 05
The prime minister spoke 2 hours ago.
He said this was the most serious depression since 1914, more serious than the Great Depression
When he was done speaking, I drove to the supermarket (which was closing in 30 min) at illegal speeds, and filled a big shopping cart as much as I could of those goodies TV posted... it was STUFFED... I had to hold the goods so they wouldn't fall out of the cart! Cost me a lot.
But it's going to cost a lot more very soon
Needless to say, the PM was very gloomy, and offered no solutions
Scandinavian central banks are said to have refused our request for help
Oct 05
Already we're seeing companies that sell and transport food being denied loans and credit.
This means that big importers and sellers of food will run out cash to operate
The supply chain of food is breaking down all over the world because of the credit crisis!
I'm going to be stocking up as long as I can on durable goods
Ok, time for the positive post
We have:
- Energy... so I'm not worried about electricity
Water... we have clean water in our sinks
Heating... hot water flows through the buildings keeping them warm
Thankfully we put in place restrictions on import of foreign meat, and subsidized our farmers, so we have:
- Cows... meat, and a lot of milk!
- Lambs, sheep... a lot of meat!
- Horses... for transportation... and meat!
- Pigs... mmm... bacon!
- Chickens... yea, we got those also! That means eggs and meat
Lots of fish, I mean lots!
We do grow vegetables and fruits also, in greenhouses.
Maybe there will be shortages, and it will rationed, but I think it will be enough for everybody
In a way, we do have enough to live.
But the transition from being able to eat anything all over the world (4,000 miles Caesar salads is history) is going to be tough
Oct 06
Icelandic crown hits record low, down 7pct on the day
We're not even told about this. We need to read this in foreign news media.
The Icelandic Central Bank has "frozen" the currency exchange rate (even though it hasn't been announced), so we still see the Euro priced at 154 ISK, even though it's at 174 ISK
My currency has dropped 25% today
Run on the Icelandic banks in the UK.
The website of Landsbankinn crashed today, but once it was up again people were unable to withdraw their money
Glitnir and Landsbankinn has put a stop to selling of their funds and pools
Oct 06
60% drop in my currency today...
I feel very shaken up
Oct 06
Game over for Iceland
The prime minister addressed the nation just now:
- All the banks are bankrupt
New draconian laws are being approved to give the government absolute authority over the financial system
What this means is basically, we will let the banks fail and will not bail them out.
And the government will pick up the remains and put together a working banking system
END TRANSMISSION
things are bad there, but the country isn't going to fall apart completely.
they are most likely going to get bailed out by a russian loan come monday, which may are may not involve the loaning of a miliatary air base that the us occupied there since 2004 or 2006 or something.
the thing from craig list is kind of misleading when it said it had one of the lowest national debts. its a country of about 300,000 people, it had a huge national debt compared to it GNP. It had over extended itself by taking outside investments from other countries and became over reliant of borrowing money to people outside iceland during housing boom of this century. so when that slowed down, along with a few other factors, the whole thing unravelled.
hopefully the lesson will be learned by other countries. it might take a couple of years for iceland to get back on its feet, and with all recessions theres gonna be a loss of jobs, industry, lack of spending on social products etc, but to compare it to the zimbabwe situation would be kinda innaccurate.
celltek, have a look at the exchange rates before you decide to travel, iceland is a very expensive country in the first place, but if inflation has gone up ridiculously it might not be worth it. the euro's not exactly performing well either. but maybe it would be the best time to visit financially. i havent a clue really.
they are most likely going to get bailed out by a russian loan come monday, which may are may not involve the loaning of a miliatary air base that the us occupied there since 2004 or 2006 or something.
the thing from craig list is kind of misleading when it said it had one of the lowest national debts. its a country of about 300,000 people, it had a huge national debt compared to it GNP. It had over extended itself by taking outside investments from other countries and became over reliant of borrowing money to people outside iceland during housing boom of this century. so when that slowed down, along with a few other factors, the whole thing unravelled.
hopefully the lesson will be learned by other countries. it might take a couple of years for iceland to get back on its feet, and with all recessions theres gonna be a loss of jobs, industry, lack of spending on social products etc, but to compare it to the zimbabwe situation would be kinda innaccurate.
celltek, have a look at the exchange rates before you decide to travel, iceland is a very expensive country in the first place, but if inflation has gone up ridiculously it might not be worth it. the euro's not exactly performing well either. but maybe it would be the best time to visit financially. i havent a clue really.
