Yesterday, the government of Iceland collapsed. This collapse was caused by the “global financial crises”. In 2007 and 2008, Iceland was ranked by the UN as the “most developed country” in the world. Now? Not so good.
From the always accurate Wikipedia: “Iceland is especially hard hit by the ongoing 2008 economic crisis, because the debts of its banks are around six times its annual gross domestic product of … $19 billion. In October 2008, the Icelandic parliament passed emergency legislation to minimize the impact of the financial crisis. The Financial Supervisoral Authority of Iceland has used permission, granted by the emergency legislation, to take over the three largest commercial banks of Iceland… The Icelandic economic crisis has been a matter of great concern in international media. On 28 October 2008, the Icelandic government raised interest rates to 18%… After the rate hike, trading on the Icelandic króna finally resumed on the open market, with valuation at around 250 ISK per Euro, less than one-third the value of the 1:70 exchange rate during most of 2008, and a significant drop from the 1:150 exchange ratio of the week before… 26 January 2009, the coalition government collapsed due to the public dissent over the financial crisis.” (http://en.wikipedia.org/w/index.php?title=Iceland&oldid=266748960)
I worry about this because the same policies that caused the collapse of the government in Iceland is the same policies pushed by both former President GW Bush and current President BH Obama.
- Americans have a high debt load; Icelands have a high debt load.
- The US Congress passed “emergency legislation” giving the Treasury Secretary unprecedented (and frankly, Unconstitutional) powers; Iceland Parliament passed “emergency legislation” giving the Financial Supervisoral Authority unprecedented powers.
- The US Treasury Secretary has “bailed out” banks and taken over control or partial control of several major US Banks; the Financial Supervisoral Authority has taken over the 3 largest Iceland banks.
- The US financial crises has been a matter of great concern in international media; The Icelandic economic crisis has been a matter of great concern in international media.
- The US government has not yet raised interest rates; The Icelandic government raised interest rates to 18%
- The US dollar has been in a free fall for most of the last several years; Icelandic króna exchange rate is less than one-third the value of the 1:70 exchange rate during most of 2008, and a significant drop from the 1:150 exchange ratio of the week before.
The US keeps printing money. What happens when the bills come due? What happens when China and the Middle East stop buying our debt? Our interest rates are low right now; what happens when hyper inflation kicks in?
Maybe now is a good time to check out the Emergency Preparedness and Family Home Storage page