Iceland Goes Bust!

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LAClimber's picture
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Joined: Apr 3 2008
Posts: 24
Iceland Goes Bust!

REYKJAVIK, Iceland - This volcanic island near the Arctic Circle is on the brink of becoming the first "national bankruptcy" of the global financial meltdown ... 

The strategy gave Icelanders one of the world's highest per capita incomes. But now they are watching helplessly as their economy implodes — their currency losing almost half its value, and their heavily exposed banks collapsing under the weight of debts incurred by lending in the boom times ...

"Everything is closed. We couldn't sell our stock or take money from the bank," said Johann Sigurdsson as he left a branch of Landsbanki in downtown Reykjavik ...

The country's top four banks now hold foreign liabilities in excess of $100 billion, debts that dwarf Iceland's gross domestic product of $14 billion ....


Mezz's picture
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Joined: Oct 7 2008
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Travel and the Money market

I have a question that I would like an educated answer to.

My daughter is travelling overseas to Nepal, Finland and then England and Scotland.  Her airfares are all paid for, however, her accommodation etc., is not.  My daughter is a University Student who has saved all her money to travel before she finishes her degree.

What I need to know is, is there any advice that someone can give me regarding the value of money?  For example; would it be a good idea to buy Euro's, or UK pounds, lets say before the market goes down any further? Or stay with the Australian dollar.

She is due to travel November and return home in February.


Thank you in advance, any comments gratefully appreciated.

northernsoul's picture
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Joined: Jun 16 2008
Posts: 16
Travel money

Mezz my son jhas recently been travelling in Europe recently and I offer this advice from experience rather than any financial perspective.

No one knows how the money markets are going to react in the next 48 hours let alone 60 days and if they did they would be playing the futures market.

Practically speaking

I gave my son a credit card that was for emergencies only.

He also had a Thomas Cook/Visa electron card which allowed him to obtain Euros from a bank or ATM and even some retailers. This card works as a zero balance credit card, ie you can only use it if there are funds on the card whcih you load at the agreed exchange rate before your daughter sets off on her travels.We felt that this card was more secure and flexible than travellers cheques.But you would only be able to use this card for the  Finland part of her itinery.

 You can 'wire' cash any where in the world within 24 hours (if your daughter finds herself short of funds), so my son  kept sufficient local currency on him for 3 days living expences at any one time.


Hope this helps and I am sure she will have a great trip


Northern Soul 


Mezz's picture
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Joined: Oct 7 2008
Posts: 2
Travel Money

Northern Soul,

Thank you !  Smile

dcary's picture
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Joined: May 31 2008
Posts: 25
Silver Prices
I am having a hard time understanding why prices are not shooting up.  For most of the last year silver has tracked well with gold, but over the last couple of months in seems surpressed relative to gold.  Some think that because the market is thinner, the government works the silver market hard to keep gold prices in check...but gold is pushing back up above 900 and silver is having a hard time getting over 12.  Any insights?
switters's picture
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Joined: Jul 19 2008
Posts: 744
Silver acting more like a commodity
The response I've seen to your question elsewhere is that silver behaves more like a commodity (due to demand for industrial use) and gold behaves more like money.   In a deflationary recession or depression, the price of commodities would be expected to fall considerably.  The fact that silver's price has actually increased slightly may indicate that it is beginning to reassume its role as money along with gold.  The silver bulls point out that silver's supply is even more limited than gold, and that as fiat currencies devalue and fail silver will once again be recognized as money and the price will skyrocket much faster than gold.  
Jantjedeman's picture
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Joined: Dec 7 2008
Posts: 7
Re: Silver acting more like a commodity

It looks like silver is making the same movements like gold.

But the ratio between gold and silver changes in time. Silver could be the most booming, because it could assume a better ratio (for example 1:20 to gold) than at the moment (1:80 i thought?). So i have the same feeling about that skyrocketing.

And the world gets more people, and the resources get limited, and the energy prices will rise. And silver is mostly coming from the mining of other metals. Which are scarcely being mined at the moment because of the low commodity prices.

Anyway, Iceland may be not so differnet to other euro countries. There are more banks here that together have 4 to 5 times the GDP of that country.  The problem is that i dont know how much bad financial debts those banks have.

And yes, i also devided money between several banks. I also warned someone who had 600.000 euro on the bank (on one bank!, how like a morn can one be?). Should be distributed immedialtely because in the netherlands one could get only 100.000 back if it fails.

Also when you sell a house, split the money immediately! Do not let it stand anytime not even for seconds on one bank.


rkopf's picture
Status: Martenson Brigade Member (Offline)
Joined: Sep 4 2008
Posts: 29
Re: Iceland Goes Bust!

Hi medea,

I have been to Iceland two weeks ago, and I must say, the trip was as enjoyable as expected. From a tourists perspective, ordinary life seen quite normal, all services are running, and shops are stocked well. Needless to say that the peoples there were very friendly, helpful and welcoming, as usual.

Food and service prices were at about the german level, so it has indeed become more affordable, i dont know, it was about two to three times cheaper than ten years ago.

One funny thing, i never in my life found so many coins on the ground than on this holyday trip! Mostly quite worthless 1 or 5 krona pieces, but also one euro and some cents. Maybe peoples throw their worthless coins away?

There is a very good free monthly magazine in english language, that covers the current events, its called the "Reykjavik Grapevine"

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