From Jack Gordon:

 

The current manufactured “financial crisis,” which goes under several names (e.g., “fiscal cliff”) is nothing but wild derivatives casino gambing by the elite, using your 401K, your mortgage, and your pension, after they’ve slyly re-structured financial “laws” so that they take all the winnings from the casino gambling and you take their losses. Ergo, all the “debt” we owe is phony.  Period. It’s a beautiful system for the elite as long as the people allow it.

Well the people of Iceland reversed it.  Turned it around.  As the article below says, Iceland made the “creditors of private banks gone wild eat the losses.”

Gee. You’d think this would be huge news. Why aren’t we hearing anything about Iceland from the MSM?  Gee, take a guess why. 


http://www.washingtonsblog.com/2012/08/top-economists-iceland-did-it-right-everyone-else-is-doing-it-wrong.html

Top Economists: Iceland Did It Right … And Everyone Else Is Doing It Wrong

Iceland Shows the Way

Nobel prize winning economist Joe Stiglitz notes:

What Iceland did was right. It would have been wrong to burden future generations with the mistakes of the financial system.

Nobel prize winning economist Paul Krugman writes:

What [Iceland's recovery] demonstrated was the … case for letting creditors of private banks gone wild eat the losses.

Krugman also says:

A funny thing happened on the way to economic Armageddon: Iceland’s very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.

Krugman is right.  Letting the banks go bust – instead of perpetually bailing them out – is the right way to go.

We’ve previously noted:

Iceland told the banks to pound sand. And Iceland’s economy is doing much better than virtually all of the countries which have let the banks push them around.

Bloomberg reports:

Iceland holds some key lessons for nations trying to survive bailouts after the island’s approach to its rescue led to a “surprisingly” strong recovery, the International Monetary Fund’s mission chief to the country said.

Iceland’s commitment to its program, a decision to push losses on to bondholders instead of taxpayers and the safeguarding of a welfare system that shielded the unemployed from penury helped propel the nation from collapse toward recovery, according to the Washington-based fund.

***

Iceland refused to protect creditors in its banks, which failed in 2008 after their debts bloated to 10 times the size of the economy.

The IMF’s point about bondholders is an important one:  the failure to force a haircut on the bondholders is dooming the U.S. and Europe to economic doldrums.

The IMF notes:

[The] decision not to make taxpayers liable for bank losses was right, economists say.

In other words, as IMF put it:

Key to Iceland’s recovery was [a] program [which] sought to ensure that the restructuring of the banks would not require Icelandic taxpayers to shoulder excessive private sector losses.

Icenews points out:

Experts continue to praise Iceland’s recovery success after the country’s bank bailouts of 2008.

Unlike the US and several countries in the eurozone, Iceland allowed its banking system to fail in the global economic downturn and put the burden on the industry’s creditors rather than taxpayers.

***

The rebound continues to wow officials, including International Monetary Fund chief Christine Lagarde, who recently referred to the Icelandic recovery as “impressive”. And experts continue to reiterate that European officials should look to Iceland for lessons regarding austerity measures and similar issues.

Barry Ritholtz noted last year:

Rather than bailout the banks — Iceland could not have done so even if they wanted to — they guaranteed deposits (the way our FDIC does), and let the normal capitalistic process of failure run its course.

They are now much much better for it than the countries like the US and Ireland who did not.

Bloomberg pointed out February 2011:

Unlike other nations, including the U.S. and Ireland, which injected billions of dollars of capital into their financial institutions to keep them afloat, Iceland placed its biggest lenders in receivership. It chose not to protect creditors of the country’s banks, whose assets had ballooned to $209 billion, 11 times gross domestic product.

***

“Iceland did the right thing … creditors, not the taxpayers, shouldered the losses of banks,” says Nobel laureate Joseph Stiglitz, an economics professor at Columbia University in New York. “Ireland’s done all the wrong things, on the other hand. That’s probably the worst model.”

Ireland guaranteed all the liabilities of its banks when they ran into trouble and has been injecting capital — 46 billion euros ($64 billion) so far — to prop them up. That brought the country to the brink of ruin, forcing it to accept a rescue package from the European Union in December.

***

Countries with larger banking systems can follow Iceland’s example, says Adriaan van der Knaap, a managing director at UBS AG.

“It wouldn’t upset the financial system,” says Van der Knaap, who has advised Iceland’s bank resolution committees.

***

Arni Pall Arnason, 44, Iceland’s minister of economic affairs, says the decision to make debt holders share the pain saved the country’s future.

“If we’d guaranteed all the banks’ liabilities, we’d be in the same situation as Ireland,” says Arnason, whose Social Democratic Alliance was a junior coalition partner in the Haarde government.

***

“In the beginning, banks and other financial institutions in Europe were telling us, ‘Never again will we lend to you,’” Einarsdottir says. “Then it was 10 years, then 5. Now they say they might soon be ready to lend again.”

And Iceland’s prosecution of white collar fraud played a big part in its recovery:

[The U.S. and Europe have thwarted white collar fraud investigations … let alone prosecutions.] On the other hand, Iceland has prosecuted the fraudster bank heads (and here and here) and their former prime minister, and their economy is recovering nicely … because trust is being restored in the financial system.

Iceland Totally Repeaces

by Drake

     News that is music to your ears…

ICELAND. No news from Iceland?… why? How come we hear everything that happens in Egypt but no news about what’s happening in Iceland:

In Iceland, the people have made the government resign, the primary banks have been nationalized, it was decided to not pay the debt that these created with Great Britain and Holland due to their bad financial politics and a public assembly has been created to rewrite the constitution.

 

And all of this in a peaceful way. A whole revolution against the powers that have created the current global crisis. This is why there hasn’t been any publicity during the last two years: What would happen if the rest of the EU citizens took this as an example? What would happen if the US citizens took this as an example.

This is a summary of the facts:

 

2008. The main bank of the country is nationalized.

The Krona, the currency of Iceland devaluates and the stock market stops. The country is in bankruptcy

 

2008. The citizens protest in front of parliament and manage to get new elections that make the resignation of the prime minister and his whole government. The country is in bad economic situation.

 

A law proposes paying back the debt to Great Britain and Holland through the payment of 3,500 million euros, which will be paid by the people of Iceland monthly during the next 15 years, with a 5.5% interest.

 

2010. The people go out in the streets and demand a referendum. In January 2010 the president denies the approval and announces a popular meeting.

 

In March the referendum and the denial of payment is voted in by 93%. Meanwhile the government has initiated an investigation to bring to justice those responsible for the crisis, and many high level executives and bankers are arrested. The Interpol dictates an order that make all the implicated parties leave the country.

 

In this crisis an assembly is elected to rewrite a new Constitution which can include the lessons learned from this, and which will substitute the current one (a copy of the Danish Constitution).

 

25 citizens are chosen, with no political affiliation, out of the 522 candidates. For candidacy all that was needed was to be an adult and have the support of 30 people. The constitutional assembly starts in February of 2011 to present the ‘carta magna’ from the recommendations given by the different assemblies happening throughout the country. It must be approved by the current Parliament and by the one constituted through the next legislative elections.
So in summary of the Icelandic revolution:

-resignation of the whole government
-nationalization of the bank.
-referendum so that the people can decide over the economic decisions.
-incarcerating the responsible parties
-rewriting of the constitution by its people

Have we been informed of this through the media?
Has any political program in radio or TV commented on this?
No! The Icelandic people have been able to show that there is a way to beat the system and has given a democracy lesson to the world.

Please spread the news as Iceland is the role model now although sooner or later, the banksters will start demolishing their nationalized bank.

   >>>We need all the help we can get.
     Get off the couch and go for freedom!

          ~ Drake

From:Robert Gipson
Date:12/01/2012 12:09 PM
The current “financial crisis,” which is going by several names (e.g., “fiscal cliff”) is nothing more than wild derivatives casino gambing by the elite, using your assets (your mortgage, your pension), whenthey have re-structured financial laws so that they take all the winnings from this gambling and you take their losses. Ergo, all the “debt” we owe is phonier than a 3-dollar bill.  It’s a beautiful system for the elite as long as the people allow it.Well the people of Iceland reversed it.  Turned it around.  Made the “creditors of private banks gone wild eat the losses.”

Gee.  You’d think this Hmmm.  Why aren’t we hearing any news about Iceland in the MSM?  It’s really big news.

http://www.washingtonsblog.com/2012/08/top-economists-iceland-did-it-right-everyone-else-is-doing-it-wrong.html



2 Comments to “Iceland got over the recession fast—by jailing the banksters, and bailing out the people”

  • If we were following that model where would we go from here?

  • Nowhere but up.

Post comment

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