It’s absolutely sickening that the bad debt of high rolling bankers/gamblers could somehow be placed at the feet of hard working people who had nothing to do with the scam and who would have won nothing had the banks won. In other words, no chance to win, only the opportunity to lose. This is the face of modern debt slavery:
“The deal would require each person to pay around $135 a month for eight years -- the equivalent of a quarter of an average four-member family's salary.”
So for the next 8 years this “deal” would consume 25% of all the wages in Iceland. Such a deal!! No wonder the Icelandic people are voting against this and are willing to brave the consequences. IMO they are doing exactly the right thing. They need to repudiate this debt and just buckle down and work hard to create products and services that people want. In a couple years this will all be water under the bridge whereas if they agreed to pay this ridiculous debt off it would be nearly a decade in clearing up best case. Remember, if Icelanders are stupid enough to pay this off then they will lose 25% of their buying power. That means their economy will fall into a seriously big ditch. Deflation will set in and salaries will plummet. Thus, what should have been an 8 year payoff period will end up taking much longer. Again, it amazes me that those who took the risk and invested in Landsbanki and Icebank and Kaupthing think they should be made whole for their bad investment choices. It’s insane.
Unfortunately, Iceland is not alone here. The Iceland story is just a miniature version of the same scam that was replayed all over the world to various degrees including the US. If it were not for the fact that we have the world’s reserve currency which we can inflate while others are trying their best to divest themselves of it without collapsing the whole fiat currency Ponzi then I can assure you we would already be feeling major pain. But our creditors have to treat us with more care than Iceland’s creditors are treating them because our debt is so big. To paraphrase the old saying, if you owe the bank $100k and lose your job then you have a problem but if you owe the bank $100 million and you lose your income source then the bank has a problem.
What happens in Iceland could serve as a roadmap for many countries over the next several years.
