If the US citizens think they are facing a hard time, they should look at Iceland to see how bad things can go and how fast:

Iceland's economic crash hit fast and hard

"No Western country has crashed in peacetime as quickly and as badly," says Jon Danielsson, an associate professor of finance at the London School of Economics. "This shows the degree of problems facing the global financial systems and how governments must do all they can to stabilize them."


Icelanders living here are already hit, a lot of them have had their credit- and debetcards closed, and those who live here on subsidies, students and retired people, from the Icelandic state are facing inflation on 100%.

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"I'm trying to maintain a shred of dignity in this world." - Me

Somebody will have to go in and help the Icelanders. It's not that big of a country and shouldn't be that hard to accomplish, I don't think.

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The country's current annual GDP is $10billion, and their Banks owe $50billion. That is the reason for their 300,000 citizens currency meltdown, and lending to them is likely to be hedged with difficult conditions.

The country's current annual GDP is $10billion, and their Banks owe $50billion. That is the reason for their 300,000 citizens currency meltdown, and lending to them is likely to be hedged with difficult conditions.

That's why we not exactly come running to their rescue, they have lived very well up there the past years, on money they didn't have, now it's time for them to pay. As suggested in the debate here, those who have nicked the money can pay them back now, they can save themselves.

There was the same kind of scandal a few years ago with the Faroe Islands, that they spent far more than they could afford, they really battened on on money they didn't have, and since they are an (autonome) province under Denmark, we had to bail them out. That won't happen to Iceland this time, not from us, they got their independence back in 1944, they must handle their situation themselves without us.

Of course the Icelanders who live here, which is actually a large group, will be taken care of by our social system, just as any other foreigners who suddenly can't take care of themselves here. Usually they get a ticket back to their own country, but I guess the Icelanders who are students here will be allowed to stay. I don't know how the problems with the Icelanders living here, who have had their bank accounts frozen and their subsidies from the Icelandic state inflated to 50% of what they were before, will be solved yet. Something must be done with them, that's for sure. If they will be sent home or they will be allowed to stay here and get social welfare from the Danish system, I don't know.

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"I'm trying to maintain a shred of dignity in this world." - Me

The country's current annual GDP is $10billion, and their Banks owe $50billion. That is the reason for their 300,000 citizens currency meltdown, and lending to them is likely to be hedged with difficult conditions.

That's why we not exactly come running to their rescue, they have lived very well up there the past years, on money they didn't have, now it's time for them to pay. As suggested in the debate here, those who have nicked the money can pay them back now, they can save themselves.

There was the same kind of scandal a few years ago with the Faroe Islands, that they spent far more than they could afford, they really battened on on money they didn't have, and since they are an (autonome) province under Denmark, we had to bail them out. That won't happen to Iceland this time, not from us, they got their independence back in 1944, they must handle their situation themselves without us.

I think you just made me think of something. There is a concept of velocity of money. I think collapse is assured when the velocity of money becomes too large. All it takes is a small hitch in the velocity and suddenly no one can pay off the people they owe the money to because they didn't get paid.

Perhaps that is what Mr. Greenspan should have been looking at instead of inflation.

Somebody will have to go in and help the Icelanders. It's not that big of a country and shouldn't be that hard to accomplish, I don't think.

Small countires are for small countires to save i guess.. The big ones are
probably not that interested.. or..?
I guess you know by now that Norway is going to take some of it.. And who knows
how much that will be in the end.. they are still negotiating of course, since
Iceland dont want to Have to rely on Russia.. mmmhh.. Of course Russia would like
to have a financial control over Iceland.. That could be difficult.. I think i
support all the help we can give them.. ;-))

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The country's current annual GDP is $10billion, and their Banks owe $50billion. That is the reason for their 300,000 citizens currency meltdown, and lending to them is likely to be hedged with difficult conditions.

That's why we not exactly come running to their rescue, they have lived very well up there the past years, on money they didn't have, now it's time for them to pay. As suggested in the debate here, those who have nicked the money can pay them back now, they can save themselves.

Who's "we"? Would it, by any chance, be the Americans who have lived on money they didn't have?

Was this financial turmoil really started, caused and fuelled by Iceland?

S--t. The national economy on U.S. of A. must be really in trouble. A country with a GDP of 10 "billion" can bring USA to its knees.

Ah well, who cares. Here in the E.U. (the largest economy in the world, until China and India surpass us in a few years) this is just a minor hiccup. Soon we'll take Manhattan! (And sell it to an investment consortium to Chinese peasant villages.)

Maybe we should try to sell Denmark to China..and get back some
for all those years they kept Norwegians pay from their small income
to build all those castles.... And so we would have more money to save
Iceland. ;-)))

Well.. How ever we look at this.. Its no use in throwing balls of guilt.
We should all hope for the best outcome for everyone.

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Who's "we"? Would it, by any chance, be the Americans who have lived on money they didn't have?

It would be anyone who doesn't pay 100% cash for everything. Including homes, cars, education, appliances, anything.

Was this financial turmoil really started, caused and fuelled by Iceland?

No.

S--t. The national economy on U.S. of A. must be really in trouble. A country with a GDP of 10 "billion" can bring USA to its knees.

The economy is not. A country like that cannot.

Ah well, who cares. Here in the E.U. (the largest economy in the world, until China and India surpass us in a few years) this is just a minor hiccup. Soon we'll take Manhattan! (And sell it to an investment consortium to Chinese peasant villages.)

Yeah, good luck with that plan.

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Cordially,
Rush

elrushbo2@theobviousgmail.com
Remove the obvious...

I do see this a bit different.
The bank managers are guilty.
They earn a lot of money if the transactions going well.
If not they just leave.
We in germany have a fund wich saves every people €100.000 of savings.
Its up to the goverments to change this.

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With each crime and every kindness we birth our future.

Iceland PM hopes to conclude IMF deal soon

REYKJAVIK, Oct 21 (Reuters) - Iceland's prime minister said on Tuesday he is hopeful a deal can be reached soon with the International Monetary Fund (IMF) while another minister said an agreement could come on Tuesday or Wednesday, Icelandic media reported.

Icelandic television broadcast Prime Minister Geir Haarde speaking with reporters following a cabinet meeting. "Hopefully we'll finalise this within the very near future," Haarde said.

Asked about conditions for a possible loan, the prime minister said terms were still being worked on. "But I don't expect anything that we cannot agree to."

Haarde said he expected that once all the information was available, the IMF would be able to reach a conclusion quickly. But coming up with a set of economic forecasts was proving difficult because of the high degree of uncertainty.

Separately, Commerce Minister Bjorgvin Sigurdsson said after the cabinet meeting that he expected an agreement could be concluded on Tuesday or Wednesday, according to a report on Web site Visir.is.

(Omar Valdimarsson via Stockholm newsroom)

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It would be nice to find a solution for them, that would save all the Icelanders who live here also.

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"I'm trying to maintain a shred of dignity in this world." - Me

Who's "we"? Would it, by any chance, be the Americans who have lived on money they didn't have?

It would be anyone who doesn't pay 100% cash for everything. Including homes, cars, education, appliances, anything.

Dear me! So, the collapse of the global financial system (and nationalizing of banks) had nothing to do with Americans (representing a minuscule and diminshing role in the global economy: the U.S. peso is hardy worth anyhing nowadays!) B-dy Icelandians, the giants of world economy!

Whatever. The EU might just as well buy the U.S. of A. with a Platinum Amex card of a humble commissioner and sell it to Chinese village co-ops. Maybe one village is enough? It seems that you guys have a negative net value. S/H washing machines aren't worth much in the global marketplace nowadays. Nor is S/H America. That once-proud nation of myopic ignoramuses can't even ruin things anymore!

Dear me! So, the collapse of the global financial system (and nationalizing of banks) had nothing to do with Americans (representing a minuscule and diminshing role in the global economy: the U.S. peso is hardy worth anyhing nowadays!) B-dy Icelandians, the giants of world economy!

Whatever. The EU might just as well buy the U.S. of A. with a Platinum Amex card of a humble commissioner and sell it to Chinese village co-ops. Maybe one village is enough? It seems that you guys have a negative net value. S/H washing machines aren't worth much in the global marketplace nowadays. Nor is S/H America. That once-proud nation of myopic ignoramuses can't even ruin things anymore!

Wow.

Do you actually believe this idiocy?

If you do, good luck with it.

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Cordially,
Rush

elrushbo2@theobviousgmail.com
Remove the obvious...

The crisis is good for Iceland's IT industry

Although hangover after years of deceptive consumer fest plagues Icelanders, there is great optimism in the country's IT industry, whose fate has been controlled by the dominant banks.

Reykjavik: "Flying Hi" - High-flying - is read on the license plates on a huge luxury Hummer jeep, which cruises slowly through the rain wet streets. It is far from the only luxury car in the town scenery, and in Iceland's fashionable capital one is tempted to add a "profound decline".

The international financial crisis has hit the Island so badly that the country has been close to going state bankrupt. Many live in uncertainty and fear a future as hopelessly indebted, but still refuses the brave Icelanders to hang with the beak.

"Many here have lived as kings. And when festivities are high, we also expect that there will be a hangover. Right now, there are many who have serious hangover, "said Gunnar Bjarnason, director of the partly Danish-owned database firm Miracle Island.

Icelanders themselves are generally rather cocksure of that they will probably be able to get on their feet again as soon as the worst hangover has died down. In particular, there are bright prospects in the country's IT industry, which hasn't done any fuss of itself after the dot-com bubble burst around 2000.


In the shade

A number of companies such as Merlin, Humac-chain and the now cracked Kerfi is certainly good examples of Icelandic growth ambitions. But the volcano island's own IT people have stood in the shadow of other areas as the housing market and banks, when there were invested.

Indeed, Iceland's IT industry was so much in the shadow of the banks, that now it are the same bank's collapse that gives people new hope. The cause of the situation called "shortage of skilled labor."

"The problem is that banks vacuumed the IT industry for talent in the post dot-com bubble. The banks could pay much higher salaries than normal companies, "says Gunnar Bjarnason.

The same explanation has the director of Microsoft Iceland, Halldor Jürgensson. He describes the lack of people as the biggest obstacle to the Icelandic IT industry. And, like Miracle-director, he blamed the banks for employee shortage:

"The banks have taken the majority of the IT resources, and they have really drained the whole industry for IT people, he said.

The Microsoft Boss explains that one of the Icelandic banks at a time had an internal IT department, which measured the number of employees was higher than the country's largest software company with several hundred employees.

The banks used, among other things, the huge IT departments to develop e-banking solutions. Although the solutions according to the self-conscious Icelanders are so good that they well could be exported to other parts of the world, it was however never software, the banks were to become famous for, but their distinctive and expansive financing circus.

The Icelandic banks are from many sides accused of profligate irresponsibility. They have been unusually aggressive in the financing of the Icelandic consumer fest - and exposed themselves to huge risk by borrowing money, which they had captured in unsafe activities abroad.


What about my Lexus?

Many young Icelanders, such as the sweet girl who sells an Icelandic Sweater for your broadcast, therefore, feels the crisis on their bodies.

"Everybody is on loan to the house and car. We have two cars, but now we are worried about the loan on one car, "she says.

It is not that long ago she eked out a living as au pair girl in Denmark, but now she is married to a dentist in the volcanic island, and the car, giving rise to concerns, is not a small car. The young couple carry themselves around in a Lexus.

According to Gunnar Bjarnason, the banks have been extremely aggressive in the marketing of consumer targeting young inexperienced Icelanders, and especially so-called weak consumers. He is not alone in viewing critically the Icelandic banks - they are now nationalized, and really pacified as a driving force in the economy. The last is funny enough a big advantage on one important point.

"Now that banks are down again, it's possible to get people in the IT industry, and it offers good prospects," said Halldor Jürgensson.

He points out that there is still growth strategies of many Icelandic companies. But now it will not be through acquisitions to grow, but with old-fashioned organic growth.


Inspired by Microsoft

The volcanic island's IT industry is about one seventh the size of the Danish IT industry. The internet industry is small compared to Denmark's, and hasn't really any role models in terms of successful IT millionaires who could inspire new, young people to try their luck on their own.

One of the main features of the Icelandic IT industry is in the undergrowth of smaller development houses, which expands on the systems from the former Danish Navision Damgaard, now Microsoft Business Solutions.

However, it is at stake Front, the Island has its IT regularly most interesting business: CCP.

CCP is behind Eve Online, like World of Warcraft is a game-type MMORPG. Eve stands out by offering a vast universe, which runs on a single server. the Machine Park is sited in London, and is being shifted to an MS HPC platform, which is to cope with the ever increasing amount of data.

The game's gigantic virtual world is science-fiction-inspired rather than fantasy-shaped.

Central to Eve Online is the virtual economy, which players build and operate with.

In Icelandic CCP they are so much up in the game's virtual economy that even economists are employed professionally to manage financial development in the virtual universe.

The real world's financial crisis is not found, however, in the online universe, and neither the firm, which represents the vitualle universe, is affected, explaining Hilmer Pitursson, director and co-owner of the CCP.

"We are virtually immune to the problems in the Icelandic economy, because we do not get our revenues here," reads the brief explanation.

About a quarter of a million people over the world play Eve Online and pays 15 U.S. dollars a month for the pleasure.

By comparison, Blizzard has had 11 million people to pay the same to play World of Warcraft, but one should not sneeze at CCPs success, said the director.

The company is private and does not publish figures in the same way as a quoted on the stock exchange business, but Hilmer Pitursson would like to tell that he traded for 37 million dollars in 2007 and expects to achieve sales of 50 million this year - with a bottom line, which has developed an equally positive.

Prospects, the CCP-director believe, are also positive - and he has the same explanation as his colleagues in Miracle and Microsoft:

"The banks could pay exorbitant salaries for IT people and it made it impossible for everyone else to compete with them on the employees. Therefore, the Icelandic banks starved the Icelandic IT industry for intellectual capacity. But now that banks are in deep crisis, it flows to the rest of the IT industry with all the talent they had hoarded. It can't help but give us a lot of opportunities, "said the upbeat game-director.

This morning it became clear that Iceland has had an agreement with the International Monetary Fund IMF, which could lead the country through the crisis.

Perhaps the sweet girl in Sweater-store can keep her Lexus anyway.

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"I'm trying to maintain a shred of dignity in this world." - Me