So, our fearless leaders are presently working around the clock to try to save us from imminent disaster. Apparently there have been back-to-back meetings since early this morning between the government and all “vested-interest parties” who presumably are negotiating on behalf of us simple folk: union leaders, pension fund managers and suchlike.
It’s kind of bizarre to think that, if the blackest doomsday predictions come true, in just a few short weeks we could be back in the dark ages, eating pickled ram’s testicles and singed sheep’s heads, in between grazing on Iceland moss. Indeed, while shopping at Bónus yesterday [which was uncomfortably empty of wares - they're the ones who keep saying we'll have a food shortage, probably just a ploy to get us all to buy more, though*] I found myself involuntarily thinking of what we might actually have left to eat if worse comes to worst. And, you know, it wouldn’t be half bad. We could probably subsist on harðfiskur [dried fish], smjör [butter], Nicelandic cheeses, skyr, hothouse veggies, lamb and fresh fish for as long as it would take us to figure out how to grow tropical fruits in our greenhouses in Hurdygurdy.** Plus at least we have lots of hot and cold water so we wouldn’t be thirsty or cold or smell bad.
In fact, the entire problem of the world’s economy would probably be solved by Nicelanders soaking in hot pots, because up here that’s where the best discussions are. Take last Thursday, for instance. The usual suspects were there, soaking in the pot and spouting wisdom about banks and funds and so on. Seriously, there was no need for YT to go to the bank to meet with a financial advisor – all the advice I needed was right there in the hot pot. After listening in for a while I asked the guy next to me what I should do: clean everything out of my Glitnir Fund 9, or leave it in there and wait for it to go back up again?
“Clean it out.”
So I did.
And so did a lot of other people, apparently. Amidst rumours that the banks would be shut down this weekend [that the government kept saying were totally unfounded] all bank branches were packed last Friday as people withdrew funds and/or shuffled their money around. See, the government insures normal punters against losses of up to ISK 3 million [USD 26,900 / EUR 19,450 in each banking institution, so people are now scrambling to put their eggs in as many baskets as possible. And the insurance applies only to bank accounts, not to mutual funds or suchlike, so loads of people are transferring their money to normal bank accounts [where it will devalue quickly as a result of all the inflation, but it's still a better option, at least for now].
Meanwhile, Iceland’s banking woes have attracted lots of attention worldwide and I have to say I’m a bit shocked at the schadenfreude that a lot of people are expressing. This link, for instance, has been responsible for a bunch of traffic to this site over the last 24 hours or so, and some of the comments below it are downright spiteful and nasty. Not to mention the fact that someone named ‘spiderwire’ pulls a direct quote from this site without accreditation. Tsk. Someone should teach him some manners.
The debate concerning the EU rages on even as we speak – parties on the labour market are pushing for it while the government remains reticent … I shall report a bit better on that soon [I know a lot of you are interested in more details].
WE CANNOT COMPLAIN ABOUT THE WEATHER, THOUGH
It was a gorgeous day today, bright and sunny and cool. EPI and I walked into town to meet up with a reader / commenter, James, and his wife Brooke, from Toronto who kindly ferried over a couple of items of clothing from Mountain Equipment Co-Op for YT and then stunned us by giving us a bottle of Canadian ice wine as a present. How amazingly thoughtful is that? RIght now 3°C [37F], the sun came up at 7:46 am and will go down in a few minutes at 6:45 pm.
* famous last words, hopefully not
** Hveragerði
{ 14 comments… read them below or add one }
Almost 20 years ago, the last time we went through a financial bubble burst, Norway’s government had to bail out one of our largest banks by just walking in and taking over (it’s called “public administration”). That’s how Norway secures the deposits of a bank’s customers as well as the bank itself, and it sounds like that’s how Iceland does it, too. The nasty comments come from not realizing this is the solution some countries use for such problems. About four years later, the state let the bank run itself again.
Ice wine, I learned just recently, is a luxury and rarity. Enjoy yours!
Hundreds of thousands of Britons have savings with Kaupthing and Landsbanki. What would you recommend they do, as you are there in Iceland and know the actual situation? Thanks.
It all sounds like a surreal soap opera, with the stories behind the crisis that you mentioned the other day. What alway scares me is when financial leaders meet behind closed doors in emergency circumstances, especially when said people might be partially responsible for the fiasco in the first place *cough Bush administration cough*.
Keera – I’m still not convinced that this act was necessary. There are a lot of people saying that our current Central Bank management is incompetent, including one very prominent professor at the London School of Business. The Central Bank needs to be run by professionals and competent individuals, not aging politicians who see it as a cushy job but aren’t actually trained to deal with this sort of crisis. Not to mention someone with a history of being self-serving, like our current governor.
Jessie – my sentiments exactly.
Andrew – honest, I don’t know what to advise. Being here in Iceland certainly does not equal knowing the actual situation. The general public here doesn’t know anything more than what we’re being told (i.e. that all is – reasonably – well), which so far has only served to undermine trust in our financial institutions and their leaders (because we were told that before and it turned out to be false). The only thing I can advise is to find out whether your government insures depositors at banks in the UK, and if so, for how much.
Harðfiskur and skyr sounds good to me. My wife says the current crisis brings a cosy feeling. It’s like things are back to normal, just the situation we knew when we were children: everyone struggling to make ends meet, inflation, slátur …
These are very difficult times, worldwide.
I have been listening to a number of “financial experts” here on TV and radio, and while the bailout plan has passed Congress and enacted into law, the concensus is that basic trust between banks has been destroyed.
Even if the toxic assets are bought by the government, you can’t force a bank to make a loan. Banks are now hoarding cash and not loaning to other banks, as no bank wants to loan to a bank that might go under. This whole thing looks like a house of cards that has started to implode, and no one really knows when it will stop. But nothing will change until banks are willing to loan to other banks, and a certain level of trust is restored. I hope that happens quickly.
In mentioning what life could become like,
Alda (and others) you might enjoy this link to a book from 1853. It is from a German woman who traveled on her own to Iceland and describes what she did and saw during her 3 month stay there, what living conditions were like, and what was “normal” for meals and such. She said this about the food:
**************************
I did not at all relish the diet at dinner; this meal consisted of two
dishes, namely, boiled fish, with vinegar and melted butter instead of
oil, and boiled potatoes. Unfortunately I am no admirer of fish, and now
this was my daily food. Ah, how I longed for beef-soup, a piece of meat,
and vegetables, in vain! As long as I remained in Iceland, I was
compelled quite to give up my German system of diet.
After a time I got on well enough with the boiled fish and potatoes, but
I could not manage the delicacies of the island. Worthy Madame Bernhoft,
it was so kindly meant on her part; and it was surely not her fault that
the system of cookery in Iceland is different from ours; but I could not
bring myself to like the Icelandic delicacies. They were of different
kinds, consisting sometimes of fishes, hard-boiled eggs, and potatoes
chopped up together, covered with a thick brown sauce, and seasoned with
pepper, sugar, and vinegar; at others, of potatoes baked in butter and
sugar. Another delicacy was cabbage chopped very small, rendered very
thin by the addition of water, and sweetened with sugar; the accompanying
dish was a piece of cured lamb, which had a very unpleasant “pickled”
flavour.
On Sundays we sometimes had “Prothe Grutze,” properly a Scandinavian
dish, composed of fine sago boiled to a jelly, with currant-juice or red
wine, and eaten with cream or sugar. Tapfen, a kind of soft cheese, is
also sometimes eaten with cream and sugar.
In the months of June and July the diet improved materially. We could
often procure splendid salmon, sometimes roast lamb, and now and then
birds, among which latter dainties the snipes were particularly good. In
the evening came butter, cheese, cold fish, smoked lamb, and eggs of
eider-ducks, which are coarser than hen’s eggs. In time I became so
accustomed to this kind of food, that I no longer missed either soup or
beef, and felt uncommonly well.
My drink was always clear fresh water; the gentlemen began their dinner
with a small glass of brandy, and during the meal all drank beer of Herr
Bernhoft’s own brewing, which was very good. On Sundays, a bottle of
port or Bordeaux sometimes made its appearance at our table; and as we
fared at Herr Bernhoft’s, so it was the custom in the houses of all the
merchants and officials.
***************
Somehow life always seems to survive in Iceland, and in 1852, pickeled testicles were not on the menu. These are bad times, but Icelanders always survive.
Fascinating read, but I love the history of Iceland.
The book can be downloaded for free:
http://www.gutenberg.org/etext/1894
Don
I checked up on this. The good news is that Kaupthing savers are covered by the British scheme up to 50,000 Pounds. The bad news is that Landsbanki savers are covered by the Icelandic compensation scheme! I can’t imagine how anyone in Britain would go about getting their money back from Iceland!
Greetings from Madrid, right now 21ºC sunny cloudless blue sky, but it’s going to be a bit chilly tonight (low of 7ºC).
Thanks for your blog! I read something worrying about Iceland in the dailies today, googled it, found the schadenfreudic entry that links to this blog, then started reading.
I must say that most of what has been written about Iceland’s current crisis has been confirmed by what you’ve written (plus juicy details about the CB and Baugur which haven’t made their way out to the international news yet). At the same time, I can sense that whatever happens, Icelanders will just take it in stride.
In fact, before reading your biographical post, I thought the blog was written by a man. I don’t know why. Maybe some feeling of strength behind the words.
I like the tone of your blog and the fine writing. I’ll keep reading.
I would like to say that I think Joey’s comments reflect my own sentiments completely!
There seems to be a strange optimism about the current crisis, not that everything will be ok, but that it is a good thing that we are having this reality check. My feeling (perhaps naive) is that Iceland is going through what the rest of the world did after the ´80′s generation of greed, that perhaps Iceland learnt nothing from that. Don´t know. Sewed vambir today (gross), but I love slátur. Next will be buying half a horse and a sheep and sticking them in the freezer, also there are plenty of fish in the fjord still that we can still catch and mum picked heaps of berries – we are now discussing ways to turn the juice into wine, I figure it will still be red and that will have to do me.
Skúli – that’s a nice departure in tone from the normal gloom and doom. I think I’ll adopt it.
Andrew – thanks for the update. I don’t think Landsbanki customers would have to worry – I’m sure the Icelandic state can keep its commitments.
Joey – hi and welcome and thanks for the kind words. I must say I was a bit taken aback by your ‘written by a man’ comment. I wasn’t aware there was a ‘male’ or ‘female’ writing style, or that women didn’t write with strength behind the words. Something to chew on, I guess.
Runa – oh no! You thought I was a man too?
Sigga – who needs cheerios when you have slátur?
Ancient Chinese Curse: “May you live in interesting times.” I wonder which ancient Chinese we offended?
Lambanýru
Lamb kindneys are cheape, extremely healthy and tasty if you know how to cook them. And we still have potatoes, boiled they are boring but we can fried them with butter, cook them in a “gratin”. Maybe i should give french cooking lessons for emergency mesures to icelanders.
and i agree while one of my collegue was telling that it was maybe time for me to take my icelandic husband and daughter to france, i was also thinking that we can still survive with icelandic product, we have our own flour, meat, fish milk product and some vegies.Like you said before, who needs cheerios?!
Alda, it was a genuine pleasure meeting you and EPI and I’m only sorry that our meeting came in the midst of such bad news for you and for Iceland. I’m thinking of you and reading your reports with great interest. I hope things won’t end up being as bad as they seem right now. We had a wonderful time in Iceland and would love to come back soon.