Iceland´s Refusal To Pay, A Quantum Leap Away From Debt-Slavery

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Iceland´s Refusal To Pay, A Quantum Leap Away From Debt-Slavery

Time To Think - Here in Iceland people say, that if the country´s government agrees to give in to British and Dutch blackmail to pay the debts of the private internet-subsidiary Ice-Save of the private bank Landsbanki, we all will become Ice-Slaves.
So public opinion is forcing the parliament to refuse unconditional debt-payments.

Already a large group of international banks have come together to sue Iceland for full and unconditional payments.
Joseph Tirado, from the British law-firm Norton Rose said that a large group of banks will be part of this law-suit. He did not want to give the names of those institutions neither would he say in what court the case would be heard.
EU officials and others are threatening Iceland with international isolation.

Michael Hudson, economic professor, researcher and economic adviser to the Icelandic government calls the Parliament´s agreement a quantum leap, which might, if it succeeds to be implemented, change the world’s financial environment.

He explains in his article The Specter of Debt Revolt Is Haunting Europe -Why Iceland and Latvia Won’t (and Can’t) Pay for the Kleptocrats’ Ripoffs how Iceland, like Latvia and other east-European countries was tricked into the neo-liberal model of debt-accumulation and how this led to the financial melt-down;

  • how the Dutch and, most of all, the British government deliberately increased the damage and so the debt, which by now has become practically un-payable;
  • how the demand to pay the debt would lead to inevitable economic destruction;
  • how the British and Dutch government subservient to their country´s private financial institutions blackmailed the Icelandic government negotiators into a self-destructive agreement;
  • how even EU- and international financial and legal rules were broken in the process;
  • and how this all – with the help of the internet – was made public and so forced the Icelandic parliament to set tight limits on the debt-repayments, limits which connects the repayment with the real growth of the Icelandic economy, preventing also the whole-sale of Icelandic resources to foreign creditors as collateral of the debts.
  • In Hudsons opinion, if Iceland succeeds with this strategy, if the country can protect it´s sovereignty, then it will become a precedent for all other debtor countries all over the world and will end the unlimited powers of exploitation of the global banking kleptocracy.

Amazing...will this be the moment that the world starts to turns on the international banking cartel?  Note that the people have discovered in mass that the British and Dutch government's are subserviant to the bankers.  This is true everywhere in the west including the United States - our politicians are puppets for the banking cartel that includes the non-federal reserve bank.

Of course, the international bankers know only too well, that Iceland´s move will be imitated by others, and that´s the reason for the threats and the blackmail against the country.

The few billion $$ of debt which would break the neck of a tiny country´s economy mean practically nothing to the large debtor nations, but allowing Iceland a legal recourse connecting debts to the ability to pay without destroying the country´s economy or infrastructure will finally connect economy with social responsibility and general ethics.

The national economy has first and foremost to serve the people, the majority populations of the country and not the other way around. International trade and finance must be a tool to serve the needs of the people around the globe and not a tool for some megalomaniac corporate elites with the support of their intellectual and political lackeys to transfer most of the world´s wealth and resources into their own hands.

However the Icelandic stand has it´s risks. In the past countries which opposed the plans of the corporate and financial elites have experienced assassinations of their political leaders, false-flag terrorist attacks and all kinds of political destabilization tactics.  So friends around the world, please keep an eye on us. If something strange happens to us, you will know why it happens.

What we are already seeing here at the moment is, that we are flooded, absolutely flooded, with aggression increasing drugs like amphetamine and cocaine.  At the moment the situation has not yet deteriorated to violent gang-wars.

When the minority neighborhoods of Los Angeles and other major American cities were flooded with cheap crack-cocaine by CIA-connected drug-cartels the situation pretty soon deteriorated into near civil-war conditions. (We know from the late Gary Webb´s investigation, which even was later verified by an Congressional Investigation, that the CIA was involved. We also know, that this was done to destroy the progress the civil-rights movement had made in the decades before.)

I think, that the only way to fight covert attacks and destabilization attempts is by telling the truth, refusing the mantle of any official secret´s acts to be spread over any corruption, refusing to obey gag-orders, refusing to protect wealthy and powerful crooks and banksters, refusing to obey corrupt government organizations, refusing to give in to blackmail by intelligence agencies, refusing to be paralyzed by fear and trusting in democracy.

The ideologically motivated blindness to the fact that conspiracies do indeed exist must be cured by the courage to look the truth in the eye.

The dots must be connected. When we look at what happened in other countries today or some years ago, we will see certain patterns. If we see those patterns reoccur in our own time and our own place we will understand what is happening. We then can denounce it publicly, citing earlier examples, and so in time the tactic of false-flag, destabilization or intimidation will eventually become ineffective.

Have you wondered why western nations have been walking in lock-step in aquescing to the bankster demenads?  Did you notice that billions of American taxpayer dollars have gone to foreign banks like Germany's Deutsche Bank AG and the Royal Bank of Scotland Group PLC.  

Is it a coincidence that the banks that got the most out of the bail-out also happen to own the New York non-Federal Reserve (Goldman Sachs, J.P Morgan Chase, Citi, Mellon, etc).  Do you remember when Obama said that the "president shouldn't second guess the fed"?  Have you noticed that the non-Federal Reseve refuses to disclose where trilliuons of dollars have gone?

It is time to do as Notsilvia Night suggests; "The ideologically motivated blindness to the fact that conspiracies do indeed exist must be cured by the courage to look the truth in the eye." 

Larry

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

Interesting...

I've been wondering why the rating agencies haven't been sued. After all, if the mortage instruments had been correctly rated I don't think there would have been near as many buyers, and Iceland (and others) would not be in such a mess.

 

 

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

It's not as conspiring as you think in Holland. The Dutch government decided to secure the deposits held by their own citizens, public institutions (e.g. local councils), pension funds and the likes as an advance towards Iceland's deposit guarantees. They now just want their (tax-paid) money back. Iceland is refusing, breaking their own laws.

Ofcourse things might be a little more complicated, but that is the general jist of it. Sounds reasonable enough. I don't mind Iceland refusing, as the money owed would amount to an enormous burden on their people, but they should understand that there will be consequences which the Dutch are in their full right to pursue. It's a matter of property.

Don't open a can of worms only to find out it just contains tinned veg.

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

Thanks for the posting Larry.  I finally see a foreign destination that would be worth moving to because the citizens are becoming real citizens again rather than continuing to submit as willing servants of the banks that have now pushed the entire world into debt bondage.  Of course, the most indebted institutions are the banks themselves, but they know how to the play international extortion game to get national governments to further indebt themselves and their citizens to pay the bankers.  

Holland is definitely not a place I'd move if the govt can claim its citizens and small govt assets in order to pay the bankers and royals that rule its territory and its citizens call it "reasonable."  (the majority of US citizens do it too, so I'm not knocking Holland anymore than us)

 

 

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

Billebaars said:

Of course things might be a little more complicated, but that is the general jist of it.

You're right, things are a bit more complicated than you have presented.  For example, this from Michael Hudson link I provided:

No doubt this is why creditors and neoliberals will fight Iceland’s brave show so vehemently, angrily, unfairly and extra-legally.   For starters, Gordon Brown did not follow the proper agreed-upon legal procedures last October 6 when he closed down Landsbanki’s Icesave branches and the Kaupthing affiliates.   Under normal conditions Iceland would have availed itself of the right under European law to pay out depositors in an orderly manner.  But Mr. Brown prevented this by directing Britain’s deposit-insurance agency to pay Icesave depositors as if they were covered by UK insurance.  It was a rash decision that could turn out to be one of the biggest blunders of his career. The Icesave branches were legally extensions of Landsbanki in Iceland, covered by Iceland’s deposit insurance scheme, not that of Britain.

In an environment that saw Northern Rock and the Royal Bank of Scotland fail, Iceland’s Commerce Ministry wrote to Clive Maxwell at Britain’s Treasury on October 5 to assure him that the government would stand behind the TIF in reimbursing Icesave depositors in accordance with EU directives.  Yet three days later, Chancellor of the Exchequer Alistair Darling claimed that Iceland was refusing to pay. 

On this pretense Mr. Brown used emergency anti-terrorist laws enacted in 2001 to freeze Icelandic funds in Britain.  He did so despite Iceland’s promise to abide by the EU rules. Icelandic authorities were given no voice in how to resolve the matter.  Britain and the Netherlands (as they acknowledge in the proposed agreement with which they confronted Icelandic negotiators on June 5, 2009) merely “informed” Icelandic authorities, without following the rules and consulting with them to get permission for their quick bailout of depositors.

This affectsthe question of who is legally responsible for British and Dutch reimbursement of Icesave and Kaupthing depositors . The relevant EU law gives the responsible authorities a breathing space of three months to proceed with settlement – with a further six-month period where necessary.  This would have enabled Iceland to collect from British bank clients such as the retail entrepreneur (and major Kaupthing stockholder) Kevin Stanford, who borrowed billions of euros, far in excess of what was proper under banking rules.

It is now known that Icelandic banks in Britain were emptying out their deposits by making improper loans to British residents. But rather than helping Iceland move in a timely manner to recover deposits that Landsbanki and Kaupthing had lent out, Britain’s precipitous action plunged it into financial anarchy. The Serious Fraud team has started to help with the investigation and recovery process only in the past few weeks – now that the funds are long gone!

It is a set of assumptions and junk economics that kleptocrats, crooks and neoliberals love, as it has enabled them to get very, very wealthy and then run to government claiming that a Katrina-like accident has occurred that requires them to be fully bailed out or the economy will collapse without their self-serving wealth-seeking services. This “rational market” mysticism is what now passes for economic science. And it is in the name of this junk science that EU financial officials and indeed, central bankers throughout the world are indoctrinated with blinders that do indeed enable them to find every collapse of their theories “unanticipated.”

What it showed, of course, was that the EU was letting Britain and the Dutch use extortionate threats to veto membership if they did not get what they wanted: the nearly €4 billion in bailout reimbursement plus interest at 5.5%.

It would be hard to imagine what could have been more effective in deterring Icelandic desire for membership in the EU. On July 23 the Law Faculty at the University of Iceland discussed the details and criticized the confidential agreement – without even having access to it. Britain and the Netherlands insisted that the terms and details of the agreement not be published, on pain of the leakers facing prosecution. But apparently through a secretarial error it appeared on the Internet on July 27! The result was an explosion of anger, not only at Britain and the Dutch but at its own financial negotiators for not simply walking out when the authoritarian terms were dictated at political and financial gunpoint.

The flames were fanned further on July 31 when Wikileaks published a Kaupthing report from September 25, 2008, detailing the loans to insiders that had helped drive the bank into insolvency. Major stockholders had borrowed against their bank stock to bid it up in price and give the appearance of prosperity and solvency. (Evidently deciding that the time had come to take the money and run, the bank owners emptied out the coffers by making loans to themselves.

On August 1, Eva Joly, who had been hired as a federal prosecutor a half-year earlier, published her article in Le Monde that appeared in many other countries, criticizing Britain’s behavior.

Bolstered by Gordon Brown’s shrill rhetoric and Britain’s insistence that the terms be kept secret, the EU’s harsh take-it-or-leave-it stance created an atmosphere in which the Althing had little choice but to draw a line and insist that any Icesave settlement had to reflect Iceland’s reasonable ability to pay.

No doubt the post-Soviet countries are watching, along with Latin American, African and other sovereign debtors whose growth has been stunted by the predatory austerity programs that IMF, World Bank and EU neoliberals imposed in recent decades. The post-Bretton Woods era is over. We should all celebrate.

Note how the Dutch and Brown insisted that all terms of any agreemnt were to be kept secret.  This is NOT the way a democracy should work but it is the way that the international banking cartel; through their policial puppets, operates.

In the U.S. the un-Federal Reserve bank will not even disclose where trillions of dollars of tax payer dollars went.  Meetings were held on Wall Street behind closed doors and details were kept secret.  Most of our legislators never even read the bail-out bill before passing it under the threat of martial law.

The IMF has a terrible track record of luring emerging nations into debt that cannot be paid.  You might want to read the "Economic Hitman" by Perkins to get a better idea how the criminals bankers operate.  I hope as you said, "this opens a can of worms."  It is time to end the banker tyranny that is destroying the west.

Larry

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

strabes said:

I finally see a foreign destination that would be worth moving to because the citizens are becoming real citizens again rather than continuing to submit as willing servants of the banks that have now pushed the entire world into debt bondage.  Of course, the most indebted institutions are the banks themselves, but they know how to the play international extortion game to get national governments to further indebt themselves and their citizens to pay the bankers.

Me too strabes, I'd love to at least visit Iceland to talk with the people.  When I saw the above photo, I thought it would be great to be there and to stop in one of the pubs shown in the background to catch a sense of what's happening.       

I was also very impressed with Ireland when they said "no" to the EU.  As you know, the banking cartel loves to get nations in debt so they can steal their resources.  Evidently, membership in the EU avails your resources to the banking cartel (NWO).  Maybe Iceland is going to say no to the EU which would create another problem for the banking cartel - who would follow?

This was reported from Iceland a week before the people found out about the scam: 

“I don’t think we will get a deal with the EU we can say yes to. The only thing that will get us back on track is honest hard work and fishing,” said Kristjan Gudmundsson, captain of a whale watching boat. “We have survived and thrived as a nation through fishery. This is our gold.”

Icelanders fear EU membership could mean tighter controls over what they can catch and leave their waters open to trawlers from other countries.  “This is one of the main Icelandic resources — it would be terrible if we lost that,” Thorsteinsson said.

Gordon Brown is a real piece of work not missed by the Icelanders, I've read that his "past blunders" and "treachery" are a common discussion topic that always includes profanity.  For example: Gordon Brown's decision to sell half of the UK's gold reserves 'cost UK 5 billion pounds.

The sale of more than half of the country's gold reserves between 1999 and 2002 has proved to be deeply controversial.  Critics say that signalling such a large sale of bullion to gold traders helped to drive the precious metal to a 20-year low. In 17 auctions, Mr Brown as Chancellor of the Exchequer sanctioned the sale of 395 tonnes of gold.

Figures released by the Treasury show that the total proceeds from the sales was around $3.5billion. According to a Parliamentary answer, if the gold was sold last month, on December 15, it would have raised $10.5billion.  The difference - $7billion - would be worth £4.7billion if the proceeds were converted into pounds yesterday.

One of many examples where western politicians blunder away the national wealth of a nation.  Instead of being rebuked, Mr. Brown is now the prime minister.

Anyways, I think it is very encouraging to see that people are beginning to stand up. 

Larry

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

Guns and Butter - "Iceland Recovering From Neoliberal Disaster(Radio Internview)

This is a very important historical event that you won't see covered by the corporate media. 

Dr. Michael Hudson gave a great interview yesterday by "Guns and Butter.  Iceland, like most western countries is being attacked by the international banking cartel.  But the unique thing about Iceland is that the people understand the scam and are saying no to allowing their country to be ruined by the criminals and their lackeys.

If you are in the U.S., GB, Australia, etc., this will give you an idea of what is coming our way as we have come to the point where we can no longer pay for the mess that the international banking cartel has purposely created.

One of the great quotes in the interview is Dr. Hudson stating "no democracy will voluntarily revert to feudalism."  He also states that Great Britain has defined "terrorist" nations as those which cannot pay their debts.  Of course, we know who the real terrorists are.

Dr. Hudson brought up another interesting point in saying that the SCO is very interested in Iceland.

Here are some comments regarding the interview:

  • "The threft of people's money is both universal and endemic. Any Central Bank who has followed the instructions of the IMF and under the instructions of their respective governments of any ilk it becomes apparent that these countries are enslaved...If you investigate the fact of notional and fractional reserve banking it becomes clear that in any free thinking logical way it is downright fraud and moreso because governments allow this nonsense to flourish on their watch."
  • "Iceland, it seems, has discovered The Doctrine of Odious Debt: If someone steals all the money they lent you and then still expects you to pay them back, just say "NO!"
  • "My children in the UK have just been landed with a debt that will last their entire lives, my eldest is three. The working class people of the world have to unite, under a common banner, it is age old and the robber Barons have just robbed us all in front of our own eyes"
  • "Ha! Of course you can´t walk all over us vikings!  By the way, just yesterday Zeitgeist Addendum was aired on the State Television!!!!! The Public Broadcasting Company!! which is 1 of only 3 channels in Iceland. Things are changing and people are waking up.  The Brits are after our fishing-ground, just like they were in the 70´s in the CodWars.....and don´t worry about Iceland joining the E.U."

Go Iceland!

Larry

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

Great thread, thanks for posting!

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

Larry,

This is exactly what we need right now in America, but we need to make sure the people get behind laws like the American Transportation Act and the Minnesota transportation Act to make sure these bankers absolutely lose their ability to do this to our great country.  We have to get the people to realize that the bankers money (debt money) is not the solution, it is the problem, and the only way we are going to fix our entire financial mess is to switch our money back to an evidence of wealth, through passage of legislation at the state level, then after enough states fall in line, do it on a federal level.

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

Dang, who woulda thought that Iceland would be the first uprising of the Jedi to fight the Death Star, the first wave of Wallace's freedom fighters to fight Longshanks, the first group of hobbits, elves and dwarfs to fight Lord Sauron?

Thomas, keep the fight going in MN!

(I know this post sounds cheesy...I'm in a cheerleader mood...haven't had much joyful hope about our future in a while so I'm relishing this)

 

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

Strabes,

Join us in the fight.  Drop on in on one of our conference calls.  We need everyone we can get!

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

Hmmm . . . It seems that Iceland has joined the Axis of Evil . . . . That one's gonna be a tough sell, I'd say . . . They just don't look sinister and "foreign" enough  . . . This is going to be an interesting show to watch . . . Thanks for posting this, Larry.  I'll be watching closely.

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...
Billebaars wrote:

It's not as conspiring as you think in Holland. The Dutch government decided to secure the deposits held by their own citizens, public institutions (e.g. local councils), pension funds and the likes as an advance towards Iceland's deposit guarantees. They now just want their (tax-paid) money back. Iceland is refusing, breaking their own laws.

Ofcourse things might be a little more complicated, but that is the general jist of it. Sounds reasonable enough. I don't mind Iceland refusing, as the money owed would amount to an enormous burden on their people, but they should understand that there will be consequences which the Dutch are in their full right to pursue. It's a matter of property.

Don't open a can of worms only to find out it just contains tinned veg.

Well if the people of Holland are going to screw the very impoverished people of Iceland, who already have it really bad, because their banks and politicians made bad bets, then screw Holland. What an example of "Screw you! Give me my money!".

Perhaps the dutch should look inward and ask themselves if their personal greed outweighs the imposed suffering of the Icelandic people.

It's no different than a foreign soverieign trying to get me, an American taxpayer, to pony up on defaulted derivatives that I neither had any input into, opposed on moral ground in the first place, and have no ability whatsoever to influence.

What's done in my name, without my ability to invoke change, is not my responsiblity. Same goes for Iceland.

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

I am from the Netherlands and i did not agree what my government did.

People went for the higher interest rates, and that means higher risk.

Banks are very smart to use words like deposits, savings etc. It sounds safe but in reality you not put money in a saving account but you lend it to the bank to enable them to make more money with it. The deposit insurance should only be for money deposited in Dutch banks who participate in the deposit insurance and pay premiums.

Our government pushed it through without a debate and is doing the same thing the IMF is doing for years. Sometime in the future resources will be claimed. Iceland has lots of green energy and water. Very valuable in the future.

I am proud of what the people in Iceland are doing. Unfortunately It takes a crisis, but they sure don't waste it! Free yourself from this burden and be an example that others can follow. (Spain, Greece, Ireland, Portugal, etc..)

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Re: Iceland´s Refusal To Pay, A Quantum Leap Away From ...

http://blog.eyjan.is/larahanna/2010/01/31/max-keiser-i-silfrinu/

Max Keiser on Icelandic National TV earlier today

Scroll little bit down for the second embedded video, the interview starts  in English around 1:00

(Due to budget cuts the host speaks to him using Skype instead of satellite link :) )

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Mob rule: Iceland crowdsources its next constitution

Country recovering from collapse of its banks and government is using social media to get citizens to share their ideas

http://www.guardian.co.uk/world/2011/jun/09/iceland-crowdsourcing-consti...

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I haven't been paying much

I haven't been paying much attention to Iceland and have read most of this thread but haven't investigated any of this myself yet...

My question is:
1. If Iceland has borrowed money of any kind (regardless of the contracts) have they paid that money back? 
2. If they haven't paid it back, isn't that stealing?
3. If Iceland can't afford to pay their debts, why are they borrowing money in the first place?

Alot of this seems like Marxism... the idea that the rest of the world owed Iceland money somehow because there are rich countries that control the banks and that it's only right that Iceland gets releived of their debts.  Maybe I'm missing something here, I haven't read both sides yet.  But if I take out a loan and don't pay my loan back, that is stealing.  Why is Iceland any different?

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A few things...
TommyHolly wrote:

I haven't been paying much attention to Iceland and have read most of this thread but haven't investigated any of this myself yet...

My question is:
1. If Iceland has borrowed money of any kind (regardless of the contracts) have they paid that money back? 
2. If they haven't paid it back, isn't that stealing?
3. If Iceland can't afford to pay their debts, why are they borrowing money in the first place?

Alot of this seems like Marxism... the idea that the rest of the world owed Iceland money somehow because there are rich countries that control the banks and that it's only right that Iceland gets releived of their debts.  Maybe I'm missing something here, I haven't read both sides yet.  But if I take out a loan and don't pay my loan back, that is stealing.  Why is Iceland any different?

  1.  "If Iceland has borrowed money..."  What does that mean?  Do countries walk into a bank, get a background check, and sign loan papers?  I don't think so.  At best, some ( possibly a majority but most likely just a minority ) of people of a country elect representatives who make decisions for their country.  Now if those decisions turn out to be poor and involve taking on debt, who should be liable if there is a default or should there be no such thing as a default?  Do you want debtors prisons?  Do you think the people of countries should be liable for debt taken on by previous governments?  If so, there might be a position for you at the IMF or World Bank.
  2. If I loan you money and you refuse to pay me back, it certainly could be a form of thieft but it does not have to be.  What if I use fraud to trick you into taking out the loan?  What if I am creating the money I am giving you, out of thin air. and I really have very little to lose in the transaction.  I am just trying to point out that if I were to personally loan you 100oz of gold and you took it with the intention of never paying me back, is quite a bit different that some "legal entity" loaning another "legal entity" fiat money that the former creates out of thin air and that the later is unable to fully repay.
  3. There is an old saying "If you owe the bank one thousand dollars, you have a problem.  If you owe the bank one million dollars, the bank has a problem.".  Because as a society we don't believe in debtors prisons and we do have a mechanism for debtors to escape replayment (bankruptcy), creditors must be careful who they lend their money to.  This gets very messy when the debtors are governments and the higher level of government the bigger the mess.  If a city or county declares bankruptcy, it will be a mess.  If a state or heaven forbid the federal government declares bankruptcy, who really knows what will happen but it will certainly be a very bad day.

I know you throw around the word Marxism a lot but I really don't think it is appropriate in this case.  I believe a very legitimate moral argument can be made that many of the people that have taken on (or been given) these massive debts, should not be forced to repay them. 

This is especially true in the cases like Iceland or Ireland where it was not the government that took on the debt in the first place.  It was those countries private banking system that failed.  In the case of Iceland, I don't believe that the government actually agreed to bailout the banks.  I believe it was the UK and Dutch governments that bailled out their own citizens and then asked Iceland to pay them back.  The people of Iceland told them to pound sand and are now international pariah's.  Ireland is a little different because when its banking system imploded, the Irish government agreed to nationalize the loss, but even in this case it was done against the will of the majority of the Irish people.

You tell me how you think this should work.  Keep in mind that as a citizen of Illinois, the most irresponsibly run state in our nation, you might be on the hook for a lot of obligations you probably don't consider your own.  My mother still is drawing an Illinois teachers pension which I believe is only funded at around 50% so I do appriciate you stepping up to the plate.

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goes211 wrote:  "If
goes211 wrote:
  1.  "If Iceland has borrowed money..."  What does that mean?  Do countries walk into a bank, get a background check, and sign loan papers?  I don't think so.  At best, some ( possibly a majority but most likely just a minority ) of people of a country elect representatives who make decisions for their country.  Now if those decisions turn out to be poor and involve taking on debt, who should be liable if there is a default or should there be no such thing as a default?  Do you want debtors prisons?  Do you think the people of countries should be liable for debt taken on by previous governments?  If so, there might be a position for you at the IMF or World Bank.
  2. If I loan you money and you refuse to pay me back, it certainly could be a form of thieft but it does not have to be.  What if I use fraud to trick you into taking out the loan?  What if I am creating the money I am giving you, out of thin air. and I really have very little to lose in the transaction.  I am just trying to point out that if I were to personally loan you 100oz of gold and you took it with the intention of never paying me back, is quite a bit different that some "legal entity" loaning another "legal entity" fiat money that the former creates out of thin air and that the later is unable to fully repay.
  3. There is an old saying "If you owe the bank one thousand dollars, you have a problem.  If you owe the bank one million dollars, the bank has a problem.".  Because as a society we don't believe in debtors prisons and we do have a mechanism for debtors to escape replayment (bankruptcy), creditors must be careful who they lend their money to.  This gets very messy when the debtors are governments and the higher level of government the bigger the mess.  If a city or county declares bankruptcy, it will be a mess.  If a state or heaven forbid the federal government declares bankruptcy, who really knows what will happen but it will certainly be a very bad day.

I know you throw around the word Marxism a lot but I really don't think it is appropriate in this case.  I believe a very legitimate moral argument can be made that many of the people that have taken on (or been given) these massive debts, should not be forced to repay them. 

This is especially true in the cases like Iceland or Ireland where it was not the government that took on the debt in the first place.  It was those countries private banking system that failed.  In the case of Iceland, I don't believe that the government actually agreed to bailout the banks.  I believe it was the UK and Dutch governments that bailled out their own citizens and then asked Iceland to pay them back.  The people of Iceland told them to pound sand and are now international pariah's.  Ireland is a little different because when its banking system imploded, the Irish government agreed to nationalize the loss, but even in this case it was done against the will of the majority of the Irish people.

You tell me how you think this should work.  Keep in mind that as a citizen of Illinois, the most irresponsibly run state in our nation, you might be on the hook for a lot of obligations you probably don't consider your own.  My mother still is drawing an Illinois teachers pension which I believe is only funded at around 50% so I do appriciate you stepping up to the plate.

1. What does "Iceland borrowed money" mean?  The same as if USA borrowed money.  Countries don't just walk into a bank, they sell treasury bonds which are basically IOUs.  Was it the Government that took out the loans or their version of the FDIC that backed their banks or something?

1a. Do you think the people of countries should be liable for debt taken on by previous governments?  Don't you??  Most definitely I feel that governments and the people that elected them should be accountable for their leader's decisions.  There has to be accountability, that is the whole basis of credit.  Before you start making any more comments about the World Bank or IMF, don't forget that there also should be the shared responsibility of oversight over both those organisations when they are not operating legitimately.  The IMF and Wolrd Bank have been acting like a mafia with the UN as Don Corelone.  The corruption in these organisations has been out of control and not only that, they have been acting against the free market by giving special deals to some and making others pay.  (If you want to make an example that is fine, but when you start telling me where I should go work or comparing me to the IMF, I'll start recommending where you should go too.)

2. If I borrow money from you and the money you lent me was printed, I still owe you that money. For example, if I take out a loan and then turn around and loan you part of that money, you still owe me what you borrowed.  The reason why I posted my questions in this thread was to find out if there was any "fraud or trickery" in regards to the loans made to Iceland.  So...was there?  Can you please post some examples.

3. I don't want debtors prisons mainly because there is no way to prove just who exactly borrowed the money and why.  That would be a mess.  Again, if the citizens of Iceland elected people to represent them and those representatives made legal decisions, even if those were bad decisions, the Government of Iceland is still accountable.  Now if the representatives did something illegal, by all means hold them personally accountable.

4. I know it seems like I throw around the term Marxism, the reason why in this case is because the Marxist websites are very supportive of Iceland defaulting on their loans.  I also attend meetings to keep an eye on groups like SEIU, IBEW, and many others...  Their take on this is Iceland is like the poor guy who has been taken advantage of by the evil rich countries like the USA who are 'secretly' run by corporations.  They feel it is only right that Iceland not pay back their debt because they are poor and the wealth should be redistributed to them and the debts forgiven.

5. You mentioned that it wasn't the Government that took on the debt... (This should of been your first and main paragraph since this was my question)  I took some time and looked into this a little more and it seems the Government might be involved...kinda?  Here is a timeline:
-  Back in 2001, Iceland deregulated the banks but also removed any oversight? 
- The banks all took a HUGE gamble and  lent out over $50 Billion but soon after couldn't afford to refinance their debt.
- From what I can tell, it looks like there was a merger between the UK, Netherlands, and Iceland when they formed UK Landsbanki bank.
- In 2008, Iceland NATIONALIZED it's 3 main banks which triggered a run on the banks.
- The Nationalized bank failed and that put Iceland's portion at $5 Billion since they assumed the debt by taking over the bank.
- Iceland's Gov says it won't pay the debt because it was accrued when the bank was still private...

If the bank was private, I would say that Iceland doesn't owe anything since it was a private bank that failed and not loans taken out by the Government...  HOWEVER, Iceland's Government did back up the deposits much like our FDIC so that if the bank ever failed, Iceland's Government agreed to pick up the bill.  Iceland's government agreed to take on the debt when they nationalized the bank...  This seems to me that Iceland is accountable after all.

As far as Illinois, it is horrible that we have so much debt.  While I don't consider that debt was needed, it was done legally for the most part and therefore it MUST BE REPAID!!  Illinois is still accountable for what they spent but that doesn't mean we can't cut future spending.  We have obligations to people like your Mom to complete the contract and pay her the pension for the service she performed.  That said, I am doing my best to make sure that pensions like hers are removed in the future because they are insanely generous and Illinois State workers hardly pay into any of their benefits.  The way I think it should work in the future would be to make state worker salaries and benefits as similar as possible to the private sector, no better, no worse.

goes211's picture
goes211
Status: Diamond Member (Offline)
Joined: Aug 18 2008
Posts: 1114
I apologize

Tom,

When I suggested that you should consider working for the IMF or World Bank, it was meant in jest.  I should have added a Smileso as to have been clearer.

You appear to have missed the point I was really trying to make so I will try again.  I think a short term agreed upon contract between two people is significantly different than a long term contract between two loosely controlled entities.  I am not saying that governments should not have to meet their obligations.  Exactly the opposite, I believe that all contracts must be observed as long as they were done legally and legitimately.  My question is what is legitimate?

Should it be considered legitimate when 1/3 of the population vote, and them 1/2 of them choose a government, and that government creates obligations for all citizens for successive generations?  This seems especially illegitimate when things like the bailouts, which clearly had almost no popular support, put the countries citizens on the hook for billions of dollars.  Maybe you think democracy works in cases like this but it seems to me it has failed.

Your Ben Franklin quote seems appropriate to this discussion.

ps.  My mothers widow benefits are hardly generous.  I believe she is receiving something around $20K/year for my fathers 30+ years of teaching high school chemistry and physics.

TommyHolly's picture
TommyHolly
Status: Bronze Member (Offline)
Joined: Nov 9 2010
Posts: 90
goes211 wrote: Tom, When I
goes211 wrote:

Tom,

When I suggested that you should consider working for the IMF or World Bank, it was meant in jest.  I should have added a Smileso as to have been clearer.

You appear to have missed the point I was really trying to make so I will try again.  I think a short term agreed upon contract between two people is significantly different than a long term contract between two loosely controlled entities.  I am not saying that governments should not have to meet their obligations.  Exactly the opposite, I believe that all contracts must be observed as long as they were done legally and legitimately.  My question is what is legitimate?

Should it be considered legitimate when 1/3 of the population vote, and them 1/2 of them choose a government, and that government creates obligations for all citizens for successive generations?  This seems especially illegitimate when things like the bailouts, which clearly had almost no popular support, put the countries citizens on the hook for billions of dollars.  Maybe you think democracy works in cases like this but it seems to me it has failed.

Your Ben Franklin quote seems appropriate to this discussion.

ps.  My mothers widow benefits are hardly generous.  I believe she is receiving something around $20K/year for my fathers 30+ years of teaching high school chemistry and physics.

Sorry I was away for awhile and have been busy...

1. Loosley controlled entities still had citizens elect representatives with spending powers.  An agreement between 2 people is no different than an agreement between a bank manager (who represents other people) and a small multi-partner business (where one money manager is selected to represent the others).  You can continue up this scale all the way to the Government level.

2. What is legitimate?  Agreements made with regards to the law backed up by the Constitution (of our country), or the laws of the countries in which the agreements were made.

3. The basis of what you are calling illegitimate stems from your distaste of the way people vote and their lack of votes. and partly with the system itself.  That said, we still have the best system of Government on Earth...  I agree that our society is in a great deal of trouble when very few pay attention to who they are electing and why they are voting and I'm just as disgusted.  The system our Founding Fathers gave us is pretty different from the one we have currently... because now we have more of a Democracy and less of a Democratic Republic.  No matter how much you don't like who is elected, (and I'm right there with you), they were still legally elected and the decisions that are not being challened in court are still legal decisions (however stupid and harmful to this country.)

4. I do not think Democracy works.  All of our Founding Fathers were more afraid of Democracy than anything else.  Look up Founding Fathers and Democracy and you'll find literally hundreds of quotes speaking out against it.  A Republic means representation.  A Democratic-Republic means those representatives are Democratically elected by majority vote (which the Founders called "mob rule".)  To combat this small portion of Democracy, they went with a system of Federalism, in which power and voting responsibilities are delegated to the lowest levels possible, from Federal, to State, to County, to City and Township all with checks and balances...all to combat mob rule.  Here are just a few examples of some horrible changes that have been passed that changed us from a Republic to a European style Democracy:
-Many states have gotten away from the electoral system in favor of the popular (mob) vote.
-Senators are now elected by the public and not the State getting rid of the check and balance against the mob of the people.
-Congressman in the 1780's only had about 20,000 they represented.  Since then, they were supposed to add more members to the House of Representatives as the country grew, (but they didn't), and today each Congressman represents about 800,000 people!!  No wonder people feel disenfranchised and say their vote doesn't count when they are grouped together with so many people.
-There are many more examples...

5. As for your mother's retirement, 20K a year seems low initially but that view depends on the context in which it awarded.  This could be pretty good actually.  Since it sounds like your father retired long ago and worked for so long I have some questions:
-What was your father's salary at the time?
-Did your father work just 9 months a year like most teachers or all year for all 30 years?
-Usually when the wage earner is still alive, the pension is at least double as far as I know.  What was the original pension amount?
-Your mother's share of your Father's retirement seems low but how much of that did your father contribute to the retirement?  (As in what percentage of his paycheck?)
-Did your father contribute to a private retirement fund (like private workers) or was your parents plan to live off only the state compensation?
-Did your mother also work and have her own retirment or is she living off of only her portion of the pension?

Doing the math:
-Typically 30 years will give you a pension of 75% of your salary.  Your mother's pension of 20K is at least 40K when your father was still here.  (probably more depending on what type of joint or survivor plan he chose, but I'll go low)  That puts your fathers salary at around $54,000 which is a normal teacher's salary.  Adjusted for 9 months out of 12, proportionally that is $71,000 if he had worked all year.  That $20k your mother gets is an extremely good deal if they didn't pay towards it and she didn't work. 

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
best system of Government on Earth...?

"That said, we still have the best system of Government on Earth..."

THAT is highly debatable.

Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1988
best?

 Churchill once said, " Democracy is the worst system of government, except for all the rest. "

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