Yesterday I read a story in a column someone wrote in Fréttablaðið, about a little three-year old girl who burned her hand. After crying for a while, she went off and started playing again like nothing had happened. Over the course of the afternoon her mother noticed that a big blister formed on her hand, but the little girl just kept on playing. When she asked her daughter if her hand didn’t hurt, the little girl responded, “Yes, but only if I think about it.”
That’s kind of how things are up here right now. Despite the buoyant tone of the last couple of posts, make no mistake that things are kinda rough. In fact it often requires concerted effort not to get sucked into a pit of despair.
A professor at Reykjavík University was on the Kastljós news magazine the other night and said that as a nation we are in the denial phase and moving into the anger phase, and that’s probably fairly accurate. Everything that’s happening seems kind of unreal. In the abovementioned column there was a fairly good analogy: it’s like suddenly waking up in a different country, with a foreign language and incomprehensible road system. People have feelings of fear, anger and an overwhelming sense of powerlessness. There is so much uncertainty: what will be the implications of all this for us? How will it play out? What will our New World Order look like?
Everything has pretty much ground to a halt. For example, since we got back from holiday two and a half weeks ago - the day before the first bank, Glitnir, crashed - I’ve had only one assignment. I’m copyediting a magazine that has been a regular job for the past few years … and we’ve just found out that this will be the last issue. Apart from that, work has dried up. Most likely because everything is paralyzed. Nobody is doing anything, everything is on hold. I spoke to my father last night … he works in the cultural sector and said they have instructions to put off everything and anything they can for the time being. I spoke to a friend today who is in the same line of work as myself, and while she’s working, she’s not sure how many people will actually be able to pay and has cut all private spending to a bare minimum. What’s most scary, especially for people like YT who don’t have a fixed salary, is that everything will just shut down.
Meanwhile, even if work does start to come in, I’m not even sure what to charge anymore. Nobody knows what our currency is worth, what the inflation figures will be like tomorrow or a week from now, if things will cost the same, more, or a lot more. Our fearless leaders claim to be working overtime to get things back on track, but how exactly will they do that? All those measures they’re taking, stabilizing the currency, pegging the exchange rate, etc. are just a big mystery to the likes of YT … I just hope somebody know what they’re doing, but I’m starting to have grave doubts.
In the meantime, there is a very serious lack of foreign currency in the country, which means that importers are not able to pay their suppliers even though they effectively have the funds. Some foreign suppliers are demanding payment up front, which is impossible, so there is a real concern that we will run out of certain goods. What foreign currency there is is being rationed and things like oil, petrol and medical drugs take priority over less essential goods.
And like the good professor said, there is a massive amount of anger brewing. At our Central Bank, our Financial Supervisory Authority, our government, and yes - Gordon Brown. But more on that later.
AN EXQUISITE DAY
Gentle sunshine and the most delicate of breezes, all day long. It was pretty cold this morning I’m told with icy roads and frosty windshields, but by the time I went out it was just a gorgeous autumn day. We reached a high of around 5°C [41F] I think, which is what it is now. The sun came up at 8.19 am and went down at 6.06 pm.
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I was trying to think of something insightful or interesting to say, but all I could come up with is “This just sucks.”
I don’t know, I think people have to maintain some sense of denial, lest they become overwhelmed with fear and depression. I’ve had enough of the fear that’s being fed to us here in the U.S. — we’ve got the election and all the terror that one of the bonehead candidates wants to instill in us to prevent us from voting from the other, we’ve got the economy, which has definitely hit home (and I have similar doubts that anyone knows what they are doing), and now the media wants to talk about potential terrorist attacks?! I turned the news off a week ago, and, while I might be in denial, it’s all I can do right now to cope.
You have a right to be angry with the banks and the government (I’m not very up to date on the Gordon Brown controversy). I do hope that it will be easier for your banks and government to change their rules for future dealing (ours too!) and our economies rebound soon. I don’t know how long any of us can take the uncertainty.
The professor was talking about the The Kübler-Ross grief cycle:
Shock stage: Initial paralysis at hearing the bad news.
Denial stage: Trying to avoid the inevitable.
Anger stage: Frustrated outpouring of bottled-up emotion.
Bargaining stage: Seeking in vain for a way out.
Depression stage: Final realization of the inevitable.
Testing stage: Seeking realistic solutions.
Acceptance stage: Finally finding the way forward.
As you see, there is a bit of road to travel still. As for your confidence in your fearless leaders: on a human level, they will remain in denial for much longer than the average Icelander, because for them it is personal. Even if they come to terms with their past mistakes, that would make them unfit to lead your country out of the abyss. What Iceland needs is a respected figure with moral strength who can face the challenges and make bold decisions that face up to the new reality you have woken up to.
I repeat: sack your PM
Marc - you can stop repeating it. If I could, I would.
Continue your analogy of the little girl with the burn. Eventually it will heal. If you can meet the basics for a while (food, shelter, clothing), things will come around. And you will learn not to get burned again. Iceland has survived much worse than this.
As of now there is no comprehensive plan for the economic future of Iceland. Government and CB statements have been tentative, contradictory and frankly confusing.
“All those measures they’re taking, stabilizing the currency, pegging the exchange rate, etc. are just a big mystery to the likes of YT … I just hope somebody know what they’re doing, but I’m starting to have grave doubts.”
These measures are a bigger mystery to the markets in general and the currency markets in particular. Right now my guess is no one in their right mind will accept the ISK as payment for any debt external to Iceland. As no krona are available the point may be moot.
For the present I would suggest just trying to carry on. Worry about matters out of your control is fruitless.
In the end Iceland must go to the IMF, hat in hand, accept whatever they deem a solution and make the best of what will likely be a very sad situation indeed.
I’m trying to follow this situation as well as I can, and maybe I’ve missed something, but I guess what I don’t get is how the whole country’s economy toppled so quickly (or seemingly quick). I understand the USA’s mortage crisis spilled into other sectors and contagiously spread into other countries, but why has Iceland been affected so much? I know there are probably a million contributing factors and no one can nail it down exactly, but it seems odd that if Iceland has taken it so hard, why haven’t other relatively small, affluent economies taken bigger blows? Has Europe only maintained a teeny bit of stability thanks to the euro? What about Denmark, for example? They don’t use the euro but I haven’t heard about them in an all out tail-spin. I don’t really expect any of those questions to be answered succintly but it would be interesting to hear thoughts.
Good luck to you, Alda…and to Iceland too.
Marc’s comment above - I didn’t agree with his left-ish politics years ago, but there’s definitely one person in Iceland who fits your description of “a respected figure with moral strength who can face the challenges and make bold decisions” - take a look at
http://en.wikipedia.org/wiki/Ólafur_Ragnar_Grímsson
Hi Alda,
Forgot ‘about’ the ‘nose’. Umm…five ‘I thinks’, me thinks. Dang, I’m too easy…
Well, I don’t know what happened to my attempt to post, but I’ll try again.
Marc’s comment “What Iceland needs is a respected figure with moral strength who can face the challenges and make bold decisions…” leads me to think of only one person. I never did agree with his left-ish views some 20 years ago, but take a look at http://en.wikipedia.org/wiki/Ólafur_Ragnar_Grímsson
There seems to be a problem when trying to post here with Google’s Chrome browser, so here goes with Firefox ….
Marc’s comment “What Iceland needs is a respected figure with moral strength who can face the challenges and make bold decisions…” leads me to think of only one person. I never did agree with his left-ish views some 20 years ago, but take a look at http://en.wikipedia.org/wiki/Ólafur_Ragnar_Grímsson
Marc’s comment “What Iceland needs is a respected figure with moral strength who can face the challenges and make bold decisions…” leads me to think of only one person. I never did agree with his left-ish views some 20 years ago, but try googling Ólafur Ragnar Grímsson
Nothing helpful to say, just that I’m thinking of you.
It’s funny, in the book I’m reading at the moment (Music & Silence, Rose Tremain) the Danish king tries to save his country from poverty by selling out Iceland to a bunch of rich merchants - forgetting that there are actually people living in Iceland who might have feelings on that matter… It feels very contemporary at the moment.
rb,
The Danish krone is pegged to the euro via the ERM II, the European Union’s exchange rate mechanism. Danish economy is much diversified, Iceland had all their eggs in one basket and sadly the bottom of the basket is now out.
I’m no economist and I don’t play one on tv or online. But then again I don’t believe anyone else is either after seeing the rapid collapse around this planet.
Well you have a population that is tiny compared to most other tiny nations. They have/had 10x the equivalent of the national GDP tied up in foreign (other people’s) currency. They had a rapid rise to ultra modern and that leaves them open to being smacked down by bigger fish (nearly everybody). And then they had the typical sharks like everywhere else. Of course it would hit them hard and fast. Diceland isn’t the only country to go down hard but they are a lot sexier than say a Zimbabwe that issues a 10 billion dollar note that is nearly worthless.
Lots of people predicted this. And lots more predicted other things that didn’t happen. A lot of noise that is only clear in hindsight.
Not to be crass but what might it be like for a tourist like me that is seriously considering a visit in November? My work is tied much too closely to U.S. banks and many have already crashed so my job won’t last to even xmas. Might as well enjoy one holiday. We can cry in our Brennivín together and I’ll bring a bottle of whatever you prefer. I’ll buy a city pass and we can sit in one hot pot after the other looking for the magical aurora.
well, on with the butter.
kristjan — thanks for the info.
Vikingisson — I laughed out loud reading that. I imagine by November Iceland will be getting dark, seems fitting for your plans.
rb - some people have already weighed in and I’m no economist either. But it seems that we’re an island in more ways than one. Banking is fundamentally based on trust, and when our first bank went down, trust in our banking sector evaporated and credit lines for the other banks dried up. (People are currently arguing ad nauseum about whose fault it all was.) And because we stand alone, we can’t fall back on support from, say, the European Union. Also - and this is probably the biggest factor - our banks were way too big for the size of the nation and for the size of the market. So big that the government doesn’t have the resources to bail them out like in other countries. To compound the problem, there are only a handful of individuals who own many of the assets here, meaning the owners of the banks also owned loads of other companies (in Iceland and abroad). When the banks go down, there are fears that their other companies will go down as well, so mass bankruptcies - or at least massive devaluation of those companies, with the resulting job losses, defaults, etc. etc. Just a colossal mess.
As for the currency problem - that’s completely beyond me, i.e. why our krona plummeted. Nor do I understand how to stabilize it. All I know is that other countries won’t trade in it or convert it because it has devalued so much. And many people here have loans in those currencies (thankfully not EPI and I, whew!) so now that the krona is down, their payments have gone sky high.
Well, I do hope people ARE getting angry, we’ve been terrible at protesting, the Arnarhóll protest the other day only drew about 200 people - I was hoping for 50.000 or so.
We HAVE to get rid of the PM but maybe mainly the CB head. Him, soon, very soon! A political crisis and fighting for office might not be quite the thing at the moment, but soon. Soon enough that people haven’t forgotten, people here tend to forget very quickly and keep voting for the same corrupt idiots!
Seems that the USA/British Bankers would rather have Iceland fail,so that the remaining FEW can pick up the remaining assets of Icelandic Banks…short term economic gain(at the expense of the many),,But truly a Long Term Lose in Global Security…Iceland could be(is) backed into a corner , No help from NATO,so Iceland accepts “loan” from Russia,in exchange for Long Range Bombers based at former NATO base(abandoned by GWBUSH),Long Deep Fjords used to base Nuke Subs…The Arctic Wars are just warming up….Better Red then Dead…….Peace and Prosperity
Alda,
“why our krona plummeted” - put simply supply and demand i.e no one wants krona due to the deteriorating condition of the Icelandic economy over the past 12 months
“Nor do I understand how to stabilize it” - at this point likely no one does, nor can it be done without massive capital inflow (IMF). Iceland is really too small to have it’s own currency, I would guess it will soon be pegged to the euro.
“All I know is that other countries won’t trade in it or convert it because it has devalued so much” - not true, no one will trade in it or convert it because no one knows what it is worth, not because it is devalued. The last real world trades in EUR/ISK were around 305 krona to 1 euro. It is likely worth less than that now.
.
Always thinking of you, Alda. xox
Alda, spekingurinn hjalli.com er langt kominn með road-map að nýja Íslandi í síðustu færslum sínum og umræðunni þar. Virkilega gaman að sjá hvað er að leysast úr læðingi hjá frjóum löndum okkar.
Kristján - thank you for putting it in such simple terms. This is what we need - more people who speak like you.
Ægir - ég tékka á því. Takk.
I’m sure there’s a bigger lesson here. Just keep being receptive to it.
Alda,
This is a long comment but I hope you let it pass. I’m not able to write English as well as you but I’ve tried hard to make it understandable. I was directed to your blog by a colleague who mentioned that its sensible readership might be interested in the thoughts of someone desperately trying to save jobs, increase incoming foreign exchange and limit the appalling damage done to our international reputation and trust. I was prompted to jot down my thoughts when at a meeting this morning I was hurt and saddened when our potential clients refused our proposals by saying that the idea was sound but they couldn’t accept because ‘Icelandic business was no longer to be trusted’. Aaaarrgg!
Firstly, let me start by saying that as a small business owner trying to do my best to limit the damage done to my business and country the hysteria being whipped up against the UK prime minister is regrettable and misinformed.
The legislation the Brits used was the Anti-terrorism, Crime and Security Act 2001.
It is a shame that those who have commented on this from our own prime minister and foreign minister to the barely literate rantings on some blogs didn’t take the trouble to spend a moment or two reading the British law involved. I’ve dug it up. The actual wording of the law is this:
(1)The Treasury may make a freezing order if the following two conditions are satisfied.
(2)The first condition is that the Treasury reasonably believe that—
(a)action to the detriment of the United Kingdom’s economy (or part of it) has been or is likely to be taken by a person or persons, or
(b)action constituting a threat to the life or property of one or more nationals of the United Kingdom or residents of the United Kingdom has been or is likely to be taken by a person or persons.
(3)If one person is believed to have taken or to be likely to take the action the second condition is that the person is—
(a)the government of a country or territory outside the United Kingdom, or
(b)a resident of a country or territory outside the United Kingdom.
(4)If two or more persons are believed to have taken or to be likely to take the action the second condition is that each of them falls within paragraph (a) or (b) of subsection (3); and different persons may fall within different paragraphs.
The law then goes on to describe how assets may be frozen and so on.
It is clear that the UK treasury had reasonable grounds for believing (collapse of two Icelandic banks, and comments from the Icelandic Government that Icelandic investors would get preference over foreign investors) that action to the detriment of the UK’s economy had occurred. Who can blame them for taking quick and decisive action to limit the economic damage caused. Can you imagine what things would be like in Iceland if the tables had been reversed? What would our government due if a foreign bank, operating in Reykjavík, decided that it was going to pay out to its citizens before Icelandic investors? The answer is simple: we’d use whatever legal means we had at our disposal to limit the damage and secure funds for Icelandic investors. That’s all the Brits have done. Instead of whining about this we’d be far better off if we said sorry (it’s a difficult thing to do I know) and indicated our determination to ensure that ALL investors will have their money returned.
I also believe that our own politicians have raised this issue higher than it deserves to deflect anger away from Iceland and, of course, themselves. Other commenters on this blog have raised the Kübler-Ross cycle and it is clear to me we are approaching the ‘anger’ part of the process. It is an old politician’s trick to channel voter anger away from themselves. Sadly, we again see ordinary Icelanders being manipulated by our political ‘leaders’. Britain and the other EU countries are, in truth, Iceland’s real friends and the best chance we have of getting out of this mess without total humiliation and genuine hardship. I understand the UK taxpayer has already committed £100 million towards the process of bailing us out and I suspect there’s a lot more available as well. Xenophobic posturing from our politicians is precisely what we do NOT need at the moment. Let’s not forget that our own President at a function in London a year or two ago was very upbeat about the Icelandic ‘economic miracle’ and acted as a sort of super salesman for our financial services industry. Google for Ólafur at the Walbrook if you’d like to read his speech entitled ‘How to succeed in Modern Business’ with it’s rather unfortunate last line.
What should happen next?
Here’s my three point action plan for Iceland:
1. Our President makes a public appearance at Þingvellir to apologise to the Icelandic people and unequivocally apologise to the citizens of those nations who had money invested in Icelandic banks.
2. Our President recommends (due to the arcane nature of our constitution this is all he can do) that a national government be formed to direct the emergency activity necessary to regain control of our financial systems.
3. Our President requests that a general election be called six months from now to allow Icelanders to choose the politicians to lead them into the future.
The first two points would go a long way towards recovering credibility in the eyes of our foreign friends. The third point is essential to achieve credibility at home.
Here’s my personal action plan:
1. To do my utmost to ensure that the contracts we’ve negotiated with our Western European and North American customers are maintained. I can’t tell you just how important it is now to ensure a flow of foreign funds into our country. We need it to buy oil for our fishing fleet, medicines for our hospitals and food for our tables. This is not an exaggeration. Iceland is a candidate for a failed state.
2. To work with my foreign contacts and associates and convince them that it is safe to do business here, we’re not all crooks (there is widespread opinion that our political and financial system is irredeemably corrupt) and that Iceland recognises its mistakes and is taking concrete action to prevent them happening again.
3. To do my utmost to prevent my small company (six employees) from going under.
Thanks for taking the trouble to read this.
Kv
Birgir
Grim times indeed Alda.
This may seem kind of ironic in retrospect. I was urged recently by a co-worker to read a newly published book by Eric Weiner called “The Geography of Bliss : One Grump’s Search for the Happiest Places in the World”. I finally got a hold of it and amongst the 10 chapters within it, there was one on Iceland. The author had gone there after reading that Iceland ranked highly on Ruut Veenhoven’s database of happiness. Well in the midst of the many observations he made while being in Niceland, in one paragraph he mentions talking to an Alda a popular blogger. I’m thinking he must have meant you - n’est pas? It is ironic also because he subtitled that chapter ‘Happiness is Failure’ - but he meant in a different context too long to go into….
Interesting article here:
“‘The devils are enjoying their last days in Hell’ - the billionaire, his blonde wife and friends who helped bring Iceland to the brink”
http://www.dailymail.co.uk/news/article-1076699/The-devils-enjoying-days-Hell–billionaire-blonde-wife-friends-helped-bring-Iceland-brink.html?ITO=1490
Do you think the Icelanders will get revenge in some way on the people who caused all this?
My local newspaper yesterday compared Gordon Brown to Winston Churchill, as in each man rose to honor thanks to a crisis. I was not happy with that comparison. I am mad at Brown for the way he’s hurt Iceland.
Today’s news tells me you guys have 3 weeks’ worth of food stored up. Norway should just go ahead and load a ship with lots of goodies we’ve paid for and send it west (you’ll eat lutefisk, right?
). OTOH, a lot can change in three weeks and usually does. For the better.
I am sad to hear about the work situation, that is always more difficult if you are self-employed. If I were based in Iceland now I would see if I would think about goods or services that can be sold abroad for Euro or Dollar payments via Paypal or some similar mechanism. Rebekka Guðleifsdóttir, for instance, seems to have good model selling her photography and knitwear worldwide.
I think that Iceland could easily become a Euro economy without actually joining EMU just like there are dollarized economies in many countries. The issue would be the value of the krona to do a mass conversion. I think that Ireland would have suffered Iceland’s fate if it it were not in the EU. Scottish nationalism is suffering a major setback too.
The only way a small country can survive on its own nowadays is if it has massive wealth (like Norway) or if it tries to be more or less self-sufficient like Iceland used to be.
Here is a British MP on Iceland’s side. (He’s in Brown’s party). This is from a local English newspaper called the Grimsby Telegraph:
MP claims Government has ‘failed Iceland’
Thursday, October 16, 2008
GRIMSBY MP Austin Mitchell claims the Government has failed to provide “support or comfort” for Iceland following the collapse of the country’s banking industry.
The Labour MP has tabled a Commons motion claiming Iceland “deserves much better treatment and more helpful support in its current difficulties”.
Mr Mitchell made his plea despite millions of pounds of taxpayers’ money in North East Lincolnshire being put at risk because of the Iceland banking crisis.
The country’s three largest banks, Glitnir, Landsbanki and Kaupthing, have announced huge losses and one has been placed in receivership, rendering the country effectively bankrupt.
As reported, North East Lincolnshire Council has invested £7-million – out of a total of £90-million worth of investments spread across a number of institutions – in the stricken Icelandic banking system.
In his Early Day Motion, Mr Mitchell claimed the Government had failed to help its “old ally and friend Iceland”.
He said this had forced the Icelandic government to turn to the Russians.
Mr Mitchell also claimed Iceland’s troubles would impact on Britain.
Thanks for weighing in, everybody - and apologies if I don’t answer each comment personally now. I do read them and very much appreciate them all.
Birgir - thank you for your input especially. You make excellent points and offer some fine solutions. After all, a little humility - NOT to be confused with humiliation - goes a long way. I do have to refute one thing in your comment, though:
comments from the Icelandic Government that Icelandic investors would get preference over foreign investors
When were those comments made? Are you referring to the interview with Davíð Oddsson? - that is how I understood him in that interview, i.e. that foreign INVESTORS would probably lose money, i.e. those who owned shares in the banks. Just as they have here, and in every other country (he made specific reference to Washington Mutual in the US, where the same thing went down). However, there is a difference between investors and depositors. I’ve never heard any Icelandic government official say that UK depositors would not be compensated - quite the opposite.
However, I think your three-point action plan for Iceland is stellar. I completely agree with you that Iceland must regain trust and credibility - something that has been damaged through such an utterly hapless sequence of events and, of course, the mismanagement of our leaders.
Dietmar - yes, that was me that Eric interviewed for his book. I wrote about it here.
A bright spot on the horizon perhaps for Iceland. Somehow some European politicians managed to remember that Iceland is an ally and that trouble for Iceland will most certainly spill over into the EU. It seems that we could be pushed to assemble some kind of rescue package for Iceland after all. (not kidding)
It comes at a high cost for Iceland though: you will have to promise to win the Eurovision contest every year for the next decade.
Since discovering your site yesterday and learning so much here, I’ve thought about your situation from a fellow-writer’s perspective and come up with a suggestion that may be useful. If you could quickly turn out a book (perhaps in collaboration with colleagues for whom work has also become scarce), there should be a huge international market for it.
You handle the human interest/local color thing exquisitely and that belongs in the picture, but the broader angle I’m seeing hinges on the economic implications of what’s been done to Iceland. Essentially, an entire nation was bear-raided for the first time — and most likely not the last. In the past few years, so much money has concentrated in so few hands that any company can suffer a hostile takeover, and now the same is true of governments. Financial speculators and their affiliated rumor-mongers are in charge of the world and Icelanders are on the faultline, their entire way of life under sudden siege. By turning the spotlight on how this happened, you’d be uniquely able to illuminate the frightening new reality that, until these predators are curbed by proper regulation, nobody is safe anywhere.
Your story has both universality and urgency, because what’s happening to you is happening elsewhere less overtly. The parallel in my country (and much of Europe) is that taxpayers are being required to hand unlimited money, almost unconditionally, to the very people who created a needless crisis out of pure greed. While the media now speak of governments taking control of banks, in fact the world’s top banksters have taken control of us!
Other examples of victimized countries are well detailed in Naomi Klein’s brilliant book, “The Shock Doctrine” — but that’s a thick, scholarly work without photographs. With your talents, you could create something succinct, beautiful and utterly compelling. I hope you’ll do it fast — I can hardly wait to buy a copy!
Heaven help us all,
Erin
The Icelandic central bank announced that it had learned that payments to foreign banks are broken
“Given the extraordinary circumstances that are affecting the banking system we have reason to believe that some payments owed to banks in Iceland are currently stopped” warns a note on the website Sedlabanki.
I’m not sure how to write without sounding crass…. but now is the perfect time for foreigners to visit Iceland!
The exchange rate is several times better then when we visited in the spring, and since the Icelandic economy needs an influx of spending - tourist dollars can do that!
Alda - is that the Iceland Review that is publishing it’s last issue? I have a subscription and I will miss it!
Karen - no, it’s Atlantica, the inflight mag for Icelandair. IR will continue. We hope.
is reprehensible to say that the explanation is on wikipedia?why me off?
read technical explanations easier to understand .
understand is equivalent to know,knowledge shows the way avoid committing the same mistakes .
with the knowledge that caused error you know who also had the power to make mistakes .that is why gates?
Karen, I’m one of those tourists that will be visiting next month. But like the whole country I too am on a tiny budget but every penny counts now. I’ll be happy to spend my last penny in Iceland. It will be dark and gloomy so I should be able to perfect my Arctic Stare.
The irony for me is that just this morning I had to push some data for my last task on one of the failed banks. Almost a blessing in disguise because that bank is now merged with another bank that is effectively nationalized and that I also move data for. These mergers only cause problems with zero extra dollars for the effort. In fact I loose money. But this is the last time as the whole job is done later this month. It took years to build the system and this crisis has already ended any further work.
I didn’t loose $ investments (I’m not allowed) but I lost my job and every investment in systems for the same reasons. Moving to Iceland doesn’t look possible now so I’ll make a visit.
i’m with Karen. tourism is the way to go. an influx of foreign currency and the good will it spreads can only bolster the economy. don’t get me wrong, tourism is not the only answer, but it does help.
austin, texas
ps. @NYC- i am neither an aggie, nor a longhorn. i am ….me.
http://www.nytimes.com/2008/10/16/opinion/16kristmannsson.html?_r=1&scp=1&sq=gauti&st=cse&oref=slogin
this was an interesting article I found this morning
Its not only because people are paralyzed. I work in a lab and we can simply not order the thing we need for work. So we have to do other things (which have to be done anyway), but not in the order, we would like to do.
Birgir, that sounds like a good, positive plan. I hope everything works out for you personally and in your aspirations for Iceland.
Birgir, have you had this published in a newspaper? Sounds good to me!
Barry (and everyone) - apologies if you’re having trouble posting comments but my spam filter is very suspicious of anything containing links. Normally it’s OK to post comments with one or two links in them - but then again, some comments with only one link are blocked. Depends on the link, I guess.
It’s a pain, but necessary - you wouldn’t believe the amount of comment spam that gets captured, and most of those spam comments have loads of links, hence the link blockage.
“Iceland with natural resource guarantee to Russia
2008-10-16. Iceland, Russia:
Head of the Icelandic Central Bank is reported to have given Russian authorities guarantees in fishery resources, tourism, aluminium industry and the energy sector in return for a 4 billion EUR loan.
Central Bank chairman David Oddson has given the guarantees to Russia in the ongoing negotiations over the much-needed loan, newspaper FiskeriblandetFiskaren reports with reference to Rossiiskaya Gazeta.
Negotiations between the parts are reported to proceed successfully. It is expected that both the Russian State Duma and President Dmitrii Medvedev will support the credit.
Meanwhile, the effects of the financial crisis is hitting ordinary people on Iceland with full effect. According to Norwegian newspaper Aftenposten, Iceland now only has food supplies for another month. The country buys 50 percent of all food from abroad and needs new finances for the acquisition of new supplies.”
Ok, Iceland just sold a big chunk of future income to the Russians. That will be used to pay off part of the $10 billion debt — but that $10 billion is just short-term loans coming due in the next year - which is basically debt service. There is still the remaining $37 billion, or whatever amount the deficit between bank assets and debts. How are you going to pay for that?
Alda:
I have nothing but good things to say about your blog. I read what you write because I want to understand what it’s like to live through a financial crisis. It is definitely not schadenfreude - more like preparation for what I anticipate will happen globally.
Re: things drying up in your economic life. Have you thought about monetizing your blog through google ads and PayPal? If there’s a way to capitalize on the crisis, it’s by writing what people want to hear about. I think people will be open to practical advice regarding what you would have done had you seen this coming one year in advance. If you didn’t stockpile food, are you wishing you had? How have the prices of food changed? What are the benefits of a monetary crisis? Do people become more co-operative in economic crises, or do they compete for resources even more? Do you anticipate having to barter? Can you start an alternative currency to re-introduce liquidity into your local economy?
I get the impression that life goes on, but there’s a discernable pallor or mood that sets in. No matter what happens, you have this tool, the internet, coupled with excellent writing skills and the ability to capture the zeitgeist of what’s happening in Iceland. If you can monetize that, then all the power to you. I think people are interested (at least I am) in an every-person’s perspective on the economic difficulties we are all anticipating, and we’re looking to Iceland for clues on how to get through the coming storms.
Sæl Alda
I think the Brits don’t make the distinction between ‘investor’ and ‘depositor’ that you mention. Those that deposited their money believed, quite rightly in my view, that they had invested their money in the bank. Their investment was the capital and any interest that accrued. Maybe we’ve hit on the actual linguistic misunderstanding between us and the UK! Trouble is now I hear that our government is talking about suing the UK, presumably using the money the Brits gave us the other day to pay for the oh so expensive London lawyers they’ll need. It’s a high risk strategy and could get a result but then so was Icesave and look what happened to that.
I can’t see how our Government can maintain that it’s going to honour its obligations and all investors/depositors will get their money bank. I talked today with friends in Cambridge University who had some £20 million invested/deposited. They’re not hopeful of seeing any of it. Understand this and you’ll understand the resentment that’s building up against us. The contagion is spreading — two Dutch guys that we hoped to do a deal with today walked away from Iceland mumbling semi-apologetically about toxic assets and lack of trust.
You’re right, I was referring to Davið and he is, of course, not actually part of the government. He just acts like he’s the king. The point still holds though. He’s a senior figure in the establishment and whatever the details of his comments there’s no doubt in my mind that the Brits were left with the impression that it was Icelandic investors first and to hell with the rest of you. I hear rumours today that King David is now selling our future to the Russians. Somebody’s got to stop this guy.
For us it’s been another awful day. The only bright spot is this geography question that I heard earlier:
Q. ‘What’s the capital of Iceland?’
A. ‘About 500kr!’
Kv
Birgir
Birgir I enjoy reading you as much as I enjoy reading Alda. Thanks so much for your input. I am also an Icelandic small business operator. I currently dont have a single contract left. They have all cancelled in the last two weeks. The last cancelled yesterday. My clients are domestic as well as international but they all were for work that is based on this fair isle.
Despair, despair, despair. Oh wait, is that a glimmer of rage….?
At least I dont owe anyone anything. At the moment!!!
Anybody out there in the world need a clown???
Personally, I think Birgir’s post is the most perceptive I have read anywhere from within Iceland. The UK action has been argued over in incredible detail elsewhere, and whilst Brown shot his mouth off too much (a very rare event) the action was justifiable. I also understand how many Icelanders feel it was vindictive and outrageous. One Icelandic post (not here) said “it is nothing but a declaration of war against the Icelandic people…THE ICELANDIC PEOPLE NO LESS”.
The “elsewhere” is the Guardian comment forum. Not for the nervous or squeamish. It is very lightly moderated. There were very authoritive posts from someone who was obviously quite close the administration of the Icelandic banks in London. He explained exactly why there was already a crisis of confidence in Kaupthing S &F. Apparently, Kaupthing itself sold 37 of 40million shares of KSF at the end of September. That message was as strong as anything Oddsson may or may not have said. This is not the black and white issue some are seeing it as. Birgir definitely understands.
A period of anger is innevitable and necessary. Just be sure the anger is directed at the true culprits.
I too have been discussing a visit shortly with friends - I’ve always wanted to, but the cost was prohibitive - and because I’d like to spend some foreign currency. I hate to quote Tesco (”spits”) but “every little helps”. I’m wondering how safe it would be however, witnessing some of the bare anger. I know at some point in a bar, with copious alcohol, something would kick off.
I know it must seem like you can’t face it, but keep posting about the situation, alda. The only coverage here is about “the money” and we hear nothing about the actual situation in Iceland. I can’t start to imagine really. There were articles in the Sunday papers, but they were saying that the trendy bars were still packed and the Range Rovers still cruising. Maybe, maybe not.
People are very nervous here, but it must be ten fold there. I truly feel for you, and I believe aid should be sent from the EU countries, should it be required. We pour enough into hopelessly failed countries after all, and Iceland is nothing of the sort. It’s crucial to get some sort of value on the currency, which will not be easy. It will obviously be very low for a while, but will make your exports extremely cheap. You have to push the tourist trade. The Icelandic airlines should be busy, one way at least, and sucking in foreign currency. The currency will rise again as demand for trade increases. Imports will be very difficult, however amd the process will be very painful.
Getting to that situation will be difficult. You do need the very best people at the helm, and I cannot imagine any other western dimocracy who, having suffered the catastrophic results of apalling economic policy, would still have their central Banker still clocking on every day.
Birgir, trev - thanks for the input. Eminently sensible, both of you. Whether or not GB’s action was justified I cannot say … I just don’t have all the information, and when it’s like that, it’s better to hold your peace. However, I do support an investigation - into all these matters.
wally - I would have thought EVERYONE needed a clown right now! You should be joining Ólafur Ragnar on a tour of workplaces at lunchtime.
I do feel for you re. the cancellations, because I can relate as someone who is self-employed. It’s scary and depressing. Just remember: it’s not about YOU.
Aron - thanks for the excellent advice. I do have Google ads though (and BlogHer) and that’s hardly enough to sustain me, sadly, although site traffic has gone up a lot in the last few days. As for PayPal I’m assuming you mean a ‘donate’ button, which I’ve always been a bit leery of. Feels a bit like accepting charity, which of course it shouldn’t be - why should bloggers give all their work for free, after all?
Food for thought. Thanks for the kind words and encouragement.
garpur,
I think all understand Iceland is in a bad way economically. Much needs to be done, much needs clarification.
No one knows what the future will bring, brighter times I hope. Hammering the situation home daily though seems a bit unjust. Iceland will persevere, times will get better.
“It is said an Eastern monarch once charged his wise men to invent him a sentence, to be ever in view, and which should be true and appropriate in all times and situations. They presented him the words: “And this, too, shall pass away.” How much it expresses! How chastening in the hour of pride! How consoling in the depths of affliction!”
A. Lincoln, 1859
Cheer up garpur!
I’ll come visit again soon and spend some of my foreign currency…. there’s plenty of Icelandic wool and 66 degree North gear that’s wanted in my household.
That’s if you can bear to take Sterling?! (I can bring Euros instead if you prefer)
The reason I’m shocked at the anger towards Iceland is that this could happen anywhere, and basically has happened the most here in the US. It’s just that for some reason, even after two terms of Bush, the world still trusts the U.S. system and the world will never stop trusting continental Europe or the UK either, so things are going to steam on ahead. Or not. Who knows. What has happened in Iceland happened so fast, it really could happen anywhere. The financial system seems so psychological. It seems to me the only reason Iceland fell so hard is precisely because nobody trusts it… there’s anger from the countries that really should be coming to Iceland’s aid, because this could happen to them too. It’s way too early for any writers to be saying anything about Gordon Brown’s legacy. The fact is that if the financial situation in the UK or the USA gets as bad as Iceland, relatively speaking, the people of Iceland have it a lot better because of their size and population in relation to their nature. The future is with sustainability. People in the US and the UK would suddenly have to go out into whats left of the nature and battle each other for what’s left. I certainly hope nothing like that comes to pass, but I feel that the press has taken this Iceland thing all wrong. It should be a warning to us all, but instead people are acting like Iceland has done something wrong as a nation. That hasn’t happened. The financial industry has failed Iceland, and the world. We all need to wake up from this dream because we all know that the modern western lifestyle is unsustainable as it is currently practiced. Sooner or later what happened to Iceland will happen in the rest of the developed world (since the developed world is where all the banks are). The countries that will come out strong will be those with smaller populations and usable (not necessarily sellable) natural resources.
Mikey - I sure hope you’re right! (About your last point, that is.) Thanks for weighing in.
Leighton - GBP, EUR, YEN, USD, CAD … we’re not fussy!
I’ve been wondering about your work situation and the work situation in general in Iceland, but was afraid to ask. Very worrisome, I know.
It’s not surprising that many clients have put things on hold. I sounds like several other commenters have some good ideas about how you might sort out some of the issues (like what to do about your fee structure).
Anyway, I know your services will once more be in high demand. Fingers crossed that that will be soon.
Mikey, you raise an interesting point. The current crisis did start with the US and has had repercussions elsewhere, because we’ve all been enjoying the financial good times (and a dependency on US dollars for oil). It looks like Iceland has the become the scapegoat, someone to vent on, since the world can’t really do anything about the US and USD.
Don’t have time to read though all the comments, but just wanted to encourage you to pitch your stories to the foreign press. You have turned out to be a great source of news from Iceland and right now you should be compensated for your work.