| Author |
 Topic  |
|
|
pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
 Posted - 10/21/2008 : 18:41:12
|
You must be logged in to see this link.
....Iceland was ranked fifth- wealthiest in the world per capita in the UN 2007/2008 Human Development Index. Now, it's facing shortages of imports including food and clothing. Controls on foreign currency payments have been enforced to favor imports of fuel, medicine and food.
The value of Iceland's currency has evaporated and an economy that outgrew the U.S. and euro region every year since 2004 at the least faces a prolonged recession, if not a depression. The economy may shrink more than 10 percent with inflation reaching 75 percent in months, says Danske Bank A/S Chief Analyst Lars Christensen.
The country's main stock index has lost 90 percent of its value, most of it in the past week or so, more than double the decline in neighboring Nordic countries like Norway and Sweden. In response, Haarde, 57, and central bank Governor David Oddsson, 60, have held out the begging bowl, seeking to borrow from Russia and the IMF, which hasn't had an aid request from a Western country since 1976, when the U.K. sought a bailout.
|
|
|
jadedragon
Administrator
Canada
3788 Posts |
Posted - 10/21/2008 : 23:22:07
|
The Russian bailout of Iceland represents a significant strategic problem for NATO. Remember that in WWII the Allies violated Iceland's stated neutrality and took control of Iceland for its strategic location in the North Atlantic and to influence shipping and German U-boat activity. During the Cold War the US/NATO built bases in Iceland to watch and contain the Russians. American forces only departed in late 2006. The country has no standing army, but has participated in the war in Afghanistan and Iraq by providing a coast guard ship and search and rescue crews.
Although a fictional story, The Hunt for Red October is set largely off the coast of Iceland, a location chosen for its obvious real world strategic importance.
Now after being rebuffed by the US, Russia is bailing out Iceland to the tune of $5.4 billion / 4 Billion Euro. That is about US$18,000 for every man, woman and child in the 300,000 citizen country. I don't know what the average household size is, but a family of four just took on a $72,000 debt to the Russians. What happens if/when Iceland can't pay? With no defense system of its own and Russia holding the mortgage, can the Russians just foreclose on the whole country? Maybe the Russians will not take direct ownership, but they sure are experienced at influencing other countries. I think the Russians just bought another Cuba in the Western Hemisphere.
|
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
 |
|
| |
Topic |
|
|
|
Iceland boom & bust
Forum Locked
