Ass Backwards

The only reason Samfylkingin wants to settle the Icesave problem is so the Iceland will be allowed to join the European Union.  The problem with that idea is Icelanders have not decided whether or not they want to join the EU.  So the first thing is to find out what is being offered by the EU, hold a  referendum, and  if for some strange reason Icelanders decide to join,  find an equitable solution to the Icesave problem. Paying first and joining later is not the right order.

I am in agreement with Sigmundur Davið that Icelanders need to let the courts decide what Iceland's legal obligation is and not let politics dictate a deal that is going to heavily burden the country for years to come, all to appease a few members of the EU.  What is needed now is for the members of Vinstri Grænir to show some balls and stand up for what they believe in rather than acting like sheep and doing everything Samfylkingin tell them to do all for the sake of holding onto power. If ever there was an issue to stand up for this is it.

 

GTB

Engin Icesave-greiðsla í 7 ár

No Change

The Central Bank will have no choice but to hold the prime interest rate at 13% for this month.  The kronur is still too weak for further reduction and any lowering will jeopardize the IMF installment in July.  That's just the way it is when you borrow alot of money, especially money from an institution like the IMF; they can, and usually do, tell you what you may and may not do.  They call it a program for a reason, and Iceland has to stick to it, or else do without.

 

GTB

Peningastefnunefnd í klemmu

Two Appropriate Quotes

Did anyone hear what was said? Are there transcripts? Recordings? Or are we just supposed to trust Guðni and take Davið's word for it.  I'm sorry but the man is simply trying to write his own legacy.  Although the "mínum húsum" part really does sound like something only a truly arrogant person would say, so it could be Davið.

And now for the quotes-

 

Number 1

History is a lie agreed upon- Voltaire

Number 2

Paper doesn't refuse ink- Lester Batson ( my grandfather)

 

GTB

Davíð lét AGS heyra það

Soon, Nothing will say Made in USA

Just one more thing Americans can buy that is Made in China.  The US is very good at introducing new products but not very good at producing them. The very system that encourages the ideas drowns out the ability to produce.   Americans want everything. But they also want everything cheap.  They get upset when good jobs go overseas but never want to pay one penny more for anything to keep the jobs in the US. 

 It should come as no surprise that the American car companies are in the decline.  They have not been making what the people want for some time now and they can no longer compete.  Some people want to blame the unions.  Always an easy target except that I doubt the Japanese and German workers get paid less. More close to the problem is the broken, overcharging US healthcare system and how expensive it is to businesses. Sure it's the best, if you can afford it.  Americans will always make fun of socialized healthcare.  They say they don't want their health decisions made by the government.  I guess they would rather have it made by the inurance company. I think by the time they figure out how to fix the system, there will hardly be any companies left to use it.

And for anyone wondering if the US Military will now have to buy their Hummer (known as a Humvee) from China, have no fear. The Military Humvee is made by AM General, not GM.  But that doesn't seem to matter as the Chinese and their reverse engineering have already made their own Humvee. (With the help and blessing of AM General!)

.

Kínverjar kaupa Hummer

More Fuel for the Fire

With the kronur still very weak against all other currencies and the prime interest rate holding steady at 13%, Everyone was looking for some relief from the crisis in the lowering of the inflation rate.  The rate was as high as 18% and has come down to around 11%.  Last month there was a slight tick upwards as the weak kronur took it's toll on imported goods. But there was a chance, with a small strengthening of the kronur over the last few days, that next month would see the inflation rate drop again as house prices continue to fall. 

But leave it to the government to take the only glimmer of hope left in Iceland and destroy it with a tax increase on the one item that effects the price of nearly everything else-FUEL. This will cause a rise in inflation and increase all indexed linked loans, the most important being house loans. This will be coulpled with a rise in food prices as it will cost more for delivery. Add any poor souls who have to drive to work or drive for work and the damage for them will be even greater.

As if we were not burdened with enough debt, the have decided to add a little more.  This new government did promise to help us, we just didn't know they meant help us go further into debt.  Break out the pots and pans, they seem to be needed once again.

 

GTB

Álögur á eldsneyti og áfengi hækka

American Terrorists

So, the Sea Shepard might be returning to Icelandic waters.  I have to say I don't worry about the Icelanders at all in there is a confrontation.  The Icelanders kicked the shit out of the British in the Cod Wars so one crappy little ship full of enviromental pussies isn't going to be any problem. If the Icelanders just played hardball right from the start the Sea Shepard will put the proverbial tail between it's legs go home.  The only real damage these wackos did was to scuttle a few ships in the night, a method preferred by the cowards that they are.  You don't see the Sea Shepard fuck with the Norwegians.  They know the Norwegians would send their ship to the icy bottom where it belongs, as they have the Navy to do it.  The Icelanders just need to employ the same tactics they used in the Cod Wars and it should be no problem to damage the Sea Shepard of even sink it.  Hopefully the captain will go down with his ship.  If there is one whale I'd like to see wash up on the Icelandic beach, it is that fat fuck Paul Watson. How poetic would that be?

 

GTB

Aðgerð Ragnarök endurvakin

Higher Taxes?

Thats's the word on the street today.  The government may use this occasion to announce higher taxes on alcohol and even gasoline and diesel.  Maybe as high as 25%.  We will just have to wait and see.  There is a sinking feeling though that the government is not being entirely truthful as to how screwed the country really is.

GTB

Fundað á Þjóðminjasafni

A Peg Could Work

This could be a solution to the severe currency crisis facing Iceland that I wrote about today. http://www.gregg.blog.is/blog/gregg/entry/885025/.  A peg is always difficult to maintain but a possible solution is to to use the IMF standby loan to bolster the Central Bank's foreign currency reserves, necessary to maintain any peg.  (Just ask Davið when he tried to peg the kronur with almost no reserves. That peg still remains the shortest in monetary policy history at one day.)

At any rate, it is good to see that others can see the weak kronur is the most important problem facing Iceland now, and are making some viable suggestions.

GTB

 

Festa gengið í 160 - 170

The Problem Started and Remains with the Currency

Well, inflation has reared its ugly head again here in Iceland with a 1,13% increase over last month.  This bad news should come as no surprise to anyone.  I pointed out back in March in a previous blog entry called Kreppa Part 2 http://www.gregg.blog.is/blog/gregg/entry/841458/ that the weakening kronur was going to cause furthur inflation, eating away at any savings seen in the then 1% drop in the interest rate.  There will most likely be no further reduction in the prime interest rate as it does not help the current situation at all.  The whole problem from the beginning of the crisis has been the weakened kronur. It is the prime cause of the inflation seen today. And the weak kronur has an adverse effect on nearly everything else. Companies and individuals are heavily burdened with the ever increasing size of loans taken in foreign currency.  As the debt rises so will the defaults.  Nearly every town in Iceland is in even more dire straits because of their borrowing in foreign currency. Unless there is some solution to the kronur in the near future, the situation will begin to look even more bleak. 

And there could be even more bad news. Iceland is coming to a point where it may need to do one of two things.  The banks and government will either have to write off all the foreign currency debt and suffer the consequences of being nationally bankrupt for the future and claw its way back, or the country will have to eventually fall under the economic influence of the EU or some other nation, let the economic "hitmen" come in, and begin selling its fishing rights, power plants and anything else it can to survive.  But if Iceland would need to do the latter, what would be the point of "surviving"?

 

GTB

Verðbólgan mælist 11,6%

A Sudden Change of Mind

Finally the kreppa has made it's way, after an apparently long journey, into the halls of the Althing.  The members of the Althing will no longer be able to have "assistants" to help them with all the difficult work at the taxpayers expense.  Looks like they will actually have to bear the workload themselves for the paltry 750.000 to 850.000 kr per month salary they make. If the members still find the need for an assistant, they can do like the rest of us do and hire one, and pay for that person out of their own pocket.  I wonder how many members would need assistants then?

The big question that needs to be asked is "How are they going to get anything done without their trusty assistants?" Hopefully, with the government that is is charge, they will not be able to do much.  With ideas like joining the European Union, banning whaling, or a sugar tax (as if we are not taxed enough), one has to start to wonder, nervously, just exactly where this is all headed.  The real fear is that doing not much might actually be the real plan; so the Icelanders, beaten and bankrupt, will have no other choice but to sell their national soul and join the EU, which is the only true goal of Samfylking.

I told many people that I thought Icelanders would never join the EU.  There is really no great benefit in doing so and the Icelanders have worked too hard for their independence and their fishing grounds to vote it all away and join the EU.  But the crisis could worsen here and many people could begin to feel as if they have other choice. 

Just recently, a friend of mine was talking to a group of people in the Egilsstaður and they started to tell him that maybe joining the EU was not such a bad idea.  My friend replied, "No, it is not a bad idea to let Brussels make decisions for Iceland.  After all, Reykjavík has always considered the issues of Egilsstaður when making decisions so I am sure Brussels will do the same for Iceland."  The people in the group, for some reason, suddenly changed their minds. 

 GTB

 

 

Aðstoðarmannakerfið afnumið