FedUpUSA

Archive for the ‘Iceland’ Category

Iceland is free.  And it will remain so, so long as her people wish to  remain autonomous of the foreign domination of her would-be masters — in this  case, international bankers.

On April 9, the fiercely independent people of island-nation defeated a  referendum that would have bailed out the UK and the Netherlands who had covered  the deposits of British and Dutch investors who had lost funds in Icesave bank  in 2008.

At the time of the bank’s failure, Iceland refused to cover the losses.   But the UK and Netherlands nonetheless have demanded that Iceland repay them for  the “loan” as a condition for admission into the European Union.

In response, the Icelandic people have told Europe to go pound sand. The  final vote was 103,207 to 69,462, or 58.9 percent to 39.7 percent.    “Taxpayers should not be responsible for paying the debts of a private  institution,” said Sigriur Andersen, a spokeswoman for the Advice group that  opposed the bailout.

A similar referendum in 2009 on the issue, although with harsher terms, found  93.2 percent of the Icelandic electorate rejecting a proposal to guarantee the  deposits of foreign investors who had funds in the Icelandic bank. The  referendum was invoked when President Olafur Ragnur Grimmson vetoed legislation  the Althingi, Iceland’s parliament, had passed to pay back the British and  Dutch.

Under the terms of the agreement, Iceland  would have had to pay £2.35 billion to the UK, and €1.32 billion to the  Netherlands by 2046 at a 3 percent interest rate.  Its rejection for  the second time by Iceland is a testament to its people, who feel they should  bear no responsibility for the losses of foreigners endured in the financial  crisis.

That opposition to bailouts led to Iceland’s decision to allow the bank to  fail in 2008.  Not that the taxpayers there could have afforded to.   As  noted by Bloomberg News, at the time the crisis hit in 2008, “the banks had  debts equal to 10 times Iceland’s $12 billion GDP.”

“These were private banks and we didn’t pump money into them in order to keep  them going; the state did not shoulder the responsibility of the failed private  banks,” Iceland President Olafur Grimsson told Bloomberg Television.

The voters’ rejection came despite threats to isolate Iceland from funding in  international financial institutions.  Iceland’s national debt has already  been downgraded by credit rating agencies, and now those same agencies have  promised to do so once again as punishment for defying the will of international  bankers.

This is just the latest in the long drama since 2008 of global institutions  refusing to take losses in the financial crisis.  Threats of a global  economic depression and claims of being “too big to fail” have equated to a  loaded gun to the heads of representative governments in the U.S. and  Europe.  Iceland is of particular interest because it did not bail out its  banks like Ireland did, or foreign ones like the U.S. did.

If that fervor catches on amongst taxpayers worldwide, as it has in Iceland  and with the tea party movement in America, the banks would have something to  fear; that is, the inability to draw from limitless amounts of funding from  gullible government officials and central banks.  It appears that the root  cause is government guarantees, whether explicit or implicit, on risk-taking by  the banks.

Ultimately, such guarantees are not necessary to maintain full employment or  even prop up an economy with growth, they are simply designed to allow these  international institutions to overleverage and increase their profit margins in  good times — and to avoid catastrophic losses in bad times.

The lesson here is instructive across the pond, but it is a chilling  one.  If the U.S. — or any sovereign for that matter — attempts to  restructure their debts, or to force private investors to take a haircut on  their own foolish gambles, these international institutions have promised the  equivalent of economic war in response.  However, the alternative is for  representative governments to sacrifice their independence to a cadre of  faceless bankers who share no allegiance to any nation.

It is the conflict that has already defined the beginning of the  21^st Century.  The question is whether free peoples will choose  to remain free, as Iceland has, or to submit.

Bill Wilson is the President of Americans for Limited Government. You can  follow Bill on Twitter at @BillWilsonALG.
Bill Wilson for NetRightDaily

A protest movement that started in Spain has now spread to Italy. The Spanish government has banned protests, but that has only encouraged more protests.

I picked the story up two days ago in Protests Mount in Spain; Sovereign Debt Crisis to Follow

Acting on a tip, the New York Times picked up the story a day later in Protesters Rally in Madrid Despite Ban.

Protest Images

Here are a few protest images by Juan Luis Sanchez on Yfrog.

Spain’s Icelandic revolt

Protests in Iceland helped bring down the Icelandic government and stopped the bailouts of banks at the expense of Icelandic taxpayers. Can the same thing happen in Spain?

Please consider Spain’s Icelandic revolt

After passively submitting to the crisis, young Spaniards have finally taken to the street. Breaking out on the eve of municipal elections, the protests of recent days have been inspired by those in Iceland that led to the fall of the government in Reykjavik.

One morning in October 2008, Torfason Hördur turned up at what Icelanders call the “Althing”, the Icelandic parliament in the capital city, Reykjavik. By then, the country’s biggest bank, the Kaupthing, had already gone into receivership and the Icelandic financial system itself was in danger of going under. Torfason, with his guitar, grabbed a microphone and invited people to talk about their dissatisfaction with the freefall of their country and to speak their minds.

A movement spawned by the internet

But those voices calling for real democracy are not just being raised in Iceland, a country of about 320,000 inhabitants. Here in Spain, the umbrella organisation for various Spanish movements – Democracia Real Ya (Real Democracy Now) – already lists among its proposals some 40 points ranging from controlling parliamentary absenteeism to reducing military spending through to abolishing the so-called Sinde law (a law restricting on-line infringements of copyright).

The demonstrations have broadened spontaneously, as was the case for those who rallied under the umbrellas of the “alternative globalisation” movements, and have evolved, one decade after the World Social Forum in Porto Alegre, Brazil, on a more modest stage than the one demonstrators faced in the past at the World Economic Forum of the global elite in Davos, Switzerland.

All this is happening at astonishing speed via the Internet, which has amplified the echo of discontent and opened the lanes of cyberactivism to groups such as Anonymous, notable for intervening against companies like PayPal and Visa during the advocacy campaign for Wikileaks chief Julian Assange. Yet it was also there at the beginning of the revolts in the Arab world, to help people get round the censorship of the Tunisian and Egyptian dictatorships.

“When we grow up, we want to be Icelanders!” cried one of the leaders of the organisation during the march on Sunday May 15 before a column of young – and not so young – parents and children, students and workers, the jobless and pensioners. Many Saturdays in Iceland were needed before citizens won the changes they had demanded. Spain’s first Sunday has taken place, and was followed by a Tuesday [May 17]- but there’s still a long way to go.

Protests have now spread to Italy and beyond.

Protest Camps

Green tents are current protest camps. Purple tents are planned protest camps.

My friend Bran who lives in Spain writes …

A Spanish revolution is slowly gaining coverage, both internationally and locally. http://www.ikimap.com/map/2CYF is a map of existing, planned and evicted camps. Politicians and administrations are trying to claim sympathy and similarity to the protests expression, yet no one has good faith in the political class.

‘Revolution’ jumps from Spain to Italy

Courtesy of Google Translate (a choppy one, slightly edited by me) please consider ‘Revolution’ jumps from Spain to Italy and Italy to the rest of the world

Agglutinated protests in Spain by platform Real Democracy Now has called for demonstrations in at least six cities in the country, today and tomorrow at 20.00 .

Concentrations have been summoned by a profile of the social networking site Facebook entitled ‘Italian Revolution. Reale Democrazia Ora ‘, launched yesterday. The cities are Florence are scheduled today at 20.00, and Rome (Plaza of Spain), Milan, Bologna, Padua and Pisa, tomorrow at the same time.

The manifesto makes specific reference to the protests in Madrid, which cites as inspiration and express their solidarity. And the story is repeated all over the world

After Spain and Italy are numerous cities that have emulated the system concentrations.

Berlin joins the struggle for real democracy, support to Spain and joined the protest. “This decision May 20 Berlin Street,” announced their posters.

Paris or Buenos Aires will focus today. Brussels, Birmingham and Bogotá Ahram, tomorrow.

Amsterdam will hold a rally on Saturday 20.

For Spanish speaking readers, here is the original link: http://ecodiario.eleconomista.es/espana/noticias/3081817/05/11/Italia-copia-a-Espana-y-crea-su-Italian-Revolution.html

It is difficult to know what exactly might transpire from these protests, but we certainly have seen some shocking results in Africa and the Mideast already.

Watch Italian and Spanish Government Bonds

Most eyes remain focused on Greece. It is more important, to pay attention to Spain and Italy. Here are the charts I have been watching.

Spain 10-Year Government Bonds

Italy 10-Year Government Bonds

If yields break North of those zones shown in the above charts it will signify a lack of faith in the government bonds of those countries. Spain is huge, but Italy is massive. Italy has as much debt as Germany in an economy nowhere near as big.

I believe it is simply a matter of time before the markets start questioning Spanish government debt. Should Italian debt come into question, so will the very existence of the Euro itself.

Mike “Mish” Shedlock
Global Economic Analysis

Congratulations to Icelandic voters who once again told the UK and Netherlands where to go. Please consider Iceland Rejects Icesave Debt Deal

Icelandic voters appeared Sunday to have rejected a government-approved deal to repay Britain and the Netherlands $5 billion for their citizens’ deposits in the failed online bank Icesave.

Partial results of a national referendum suggested the “no” side had gained more than half the votes — a reflection of enduring anger over the economic havoc wrought by Iceland’s risk-taking bankers.

Full results were not due until later Sunday. With partial results in from all six of Iceland’s constituencies, the no side had almost 57 percent of the votes and the yes camp just over 43 percent.

“This is of course a disappointing result,” said Prime Minister Johanna Sigurdardottir.

Icelanders overwhelmingly rejected a previous deal in a referendum last year. The government hoped a “yes” vote on an improved offer passed by parliament would finally resolve a dispute that has caused friction among the three countries and complicated Iceland’s recovery from its economic collapse in 2008.

The dispute has grown acrimonious, with Britain and The Netherlands threatening to block Iceland’s bid to join the European Union unless it is resolved.

“Taxpayers should not be responsible for paying the debts of a private institution,” said Sigriur Andersen, a spokeswoman for the Advice group, which opposes the agreement. “I think that sends the wrong message onto the market, and sets a wrong precedent.”

Icelandic voters want no part of “Icesave”. Even the name “IceSave” is preposterous. Iceland was save by the fact voters rejected “Icesave”. Icelanders would have been debt-slaves for decades had they accepted the original terms.

How many times do citizens have to say no? Hopefully voters give Prime Minister Johanna Sigurdardottir a well deserved boot in the next election.

Moreover, Iceland needs to rethink why it would want to be part of the Eurozone in the first place. I suggest Iceland put the Euro to another vote.

Finally, I am really disappointed in the wimps in Ireland. They should put Ireland’s “reverse bailout” to a vote as well. I can guarantee the results in advance.

Banks that make stupid loans should suffer for them, not taxpayers. So far, Iceland is the only country that has taken this common-sense stance.

Mike “Mish” Shedlock
Global Economic Analysis

Hats off to Iceland for a second time for telling the IMF, the UK, and Netherlands to “Go to Hell” over the most recent Icesave proposal, better thought of as Ice Torture.

Please consider Iceland’s President Vetoes Icesave Deal

For the second time, Iceland’s president vetoed a bid by the island nation’s Parliament to repay the U.K. and the Netherlands more than $5 billion lost by depositors in Iceland’s epic 2008 banking collapse—sending the matter to a referendum by a deeply skeptical public and complicating the country’s application to join the European Union.

The dispute over Icesave—the online arm of a failed Iceland bank that took deposits from British and Dutch savers—has percolated for more than two years, reflecting the Icelandic people’s dissatisfaction with paying the price for what is almost universally regarded as the hubris of a few bankers.

A first attempt at a repayment deal in 2009 faced stiff opposition in the Icelandic parliament. A modified bill passed later that year, but President Ólafur Ragnar Grímsson vetoed it in early 2010, triggering a referendum, which failed.

The new deal carries substantially better terms—Iceland has until 2046 to repay, at an interest rate of about 3%—but Mr. Grímsson said in a statement issued Sunday that the Icesave issue is so weighty and so contested that it wasn’t up to Parliament to decide.

“There is support for the view that the people should once again, as before, act together with the Althingi as the legislator in this matter,” Mr. Grímsson said, using the local name for Iceland’s thousand-year-old Parliament.

The presidential veto is rare. It has now been used just three times since Iceland’s independence from Denmark in 1944. The Icelandic president approves nearly all bills passed by Parliament; under the constitution, he may only approve or call a referendum.

If history is a guide, the deal once again faces nearly certain defeat. In the first plebiscite, 93.2% of voters, or 134,392, rejected the bill. Just 2,599 picked “yes,” badly trailing even the 6,744 who left their ballots blank.
The British and the Dutch governments stepped in in 2008 to compensate depositors in their countries who had placed money with Icesave, since Iceland’s tiny deposit-insurance program was woefully short of cash. The two nations soon demanded their money back—about £2.35 billion ($3.8 billion) for the U.K. and €1.32 billion ($1.8 billion) for the Netherlands.

The total amounts to about half a year’s economic output.

Iceland repayment talks collapse

The BBC Reports Iceland repayment talks collapse

Talks on how Iceland will repay more than 3.8bn euros (£3.3bn) of debt it owes to the UK and the Netherlands have broken down without agreement.

The collapse of the Iceland-based Icesave online bank in October 2008 hit savers in both countries.

The UK and Dutch governments are seeking repayments from Iceland after they compensated savers themselves.

However, the three governments have been unable to agree on revised payment terms after a week of negotiations.

“We had hoped to be able to reach a consensual resolution of this issue on improved terms, but this has not yet been possible,” said Iceland’s finance minister Steingrimur Sigfusson.

In a statement, the UK and Dutch governments said they were “very disappointed that despite all the efforts over the past year and a half, Iceland is still unable to accept our best offer on the Icesave loan”.

Iceland plans to hold a referendum on the Icesave repayment on 6 March, but the government is hopeful it can reach a different deal ahead of that.

Opinion polls suggest that a majority of Icelandic voters would reject the repayment plan.

The dispute has delayed International Monetary Fund help for Iceland, which Reykjavik needs to shore up its stricken economy.

The country’s parliament voted for a referendum on the Icesave bill after President Olaf Ragnar Grimsson vetoed the repayment to the UK and the Netherlands.

Opponents say the repayment plan forces Icelandic taxpayers to pay for bankers’ mistakes.

The dispute has also overshadowed Iceland’s application to join the EU, which was submitted in July.

Iceland’s economic crisis persuaded many of its politicians that it would be better off inside the 27-nation bloc.

Arrogance of UK, Netherlands

Note the arrogance of the UK and Netherlands issuing a statement “Iceland is still unable to accept our best offer on the Icesave loan”. It is up to Iceland to make its best offer not for the UK and Ducth governments to make demands of 100% repayment.

Why should Iceland crucify its taxpayers with a “loan” when the correct procedure is a massive haircut.

Iceland should immediately counter with its “best offer” of one cent on the dollar. That will set the tone for reasonable expectations.

Somehow the Icelandic Parliament does not get it. Fortunately the president does.

Commending Iceland’s President

I commend the decision of the president to send this to the people to vote. Moreover I encourage Icelandic voters to vote the same way they did last time.

Here’s the deal. When you make stupid investments, don’t expect to be bailed out. There is no reason the people of Iceland should have to pay for the stupidity of others.

If the UK and Dutch governments were dumb enough to guarantee those deposits, then the UK and Dutch governments should pay the price, not Icelandic citizens.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Ireland faces elections, probably on Feb. 25. Ireland has an historic opportunity to lead the way for the rest of the world. If politicians will just stop bailing out the bankers with the taxes of the Irish people, and have Ireland withdraw from the Euro, they could escape the coming storm.

“It’s the DEBT, Stupid!”
We’re Doing Something About it! Come Join the Swarm!

Porter Stansberry, in the S & A Digest, warns that the turning point in America will come when the people realize that their government is corrupt and illegitimate.

That day is rapidly approaching.

Via The Daily Crux:

…remember this: Our State, as powerful as it is, relies on an assumption that’s made collectively by millions of Americans.

We must believe the people we saw on TV [Tuesday night's State of the Union] are fundamentally good and honest people. We must never come to doubt the character of those people or the process they used to gain power.

If that happens, our State, even though it’s the most powerful in the world, could quickly collapse. It is nothing without the consent of the governed. And our consent depends entirely on its legitimacy.

I believe our government is in imminent danger of losing its legitimacy. Why?

Our federal government is bankrupt and threatening to bankrupt several generations of Americans. At some point – one that is rapidly approaching –Americans will repudiate these debts and the legitimacy of the government that incurred them.

Unaffordable foreign debts and the obvious perfidy of “quantitative easing” will soon render our currency worthless. It is a shame upon the honor of our country that we would even consider using the printing press to finance our debts… It is a high crime that we have done so. The world will long remember the way we have treated our creditors.

Over the last 50 years, the government became a socialist tool. It steals assets from responsible, hard-working citizens and distributes them to others, mainly on the basis of political patronage. At some point, these policies become self-destructive. So many people end up on the dole, the government has no way to finance their needs. We have reached that point. Today, more than half of all voters pay zero federal income taxes.

Our aggressive foreign policy has created billions of enemies overseas while propping up regimes that would disgust most Americans – like the Saudis.

Most critically… our government is for sale. As the price of influence in Washington continues to escalate, it will become impossible to deny the patently obvious truth: Government policy is awarded to the highest bidder and our “free” elections are essentially rigged by the massive sums spent on advertising for candidates.

While I look forward to the day my fellow citizens begin to see their government as it really is, I also fear that day for it will surely mark the beginning of an “interesting” moment in history.

It will, indeed, be an interesting moment in history if (when?) it happens. One that will likely be written about for decades and centuries to come.

The governments of Iceland, Greece, Hungary, Tunisia, Algeria, and now Egypt have all lost credibility and legitimacy with their people, and recent reports suggest that Egypt is turning into a war zone. Does the same fate await the streets of America?

SHFPlan