We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
|
Bravo Iceland! A message from the people of Iceland to the global political establishment…
Farðu í rassgat!
By rejecting the absurd notion that governments can legitimately make taxpayers liable for bad commercial decisions by banks, Iceland shows itself as an island of sanity in a global sea of madness.
|
Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
|
Um, question, wasn’t there any Iceland government agency, or money markets, specifying what interest rates should be? Does Iceland have a central bank that specifies its own discount rate and other interest rates? These should have limited Icesave’s interest rates.
The UK and Dutch deposit insurance schemes will get around 90% of the money they payed out to depositors (they payed out 100% of deposits regardless of amount – something they were not required to do by law) even after this result. The law, that the Icelandic nation struck down yesterday, was about the Icelandic government guaranteeing full repayment to the Dutch and the UK.
It’s not as if this referendum was about shafting foreigners, it was about whether the Icelandic government should guarantee bad investment decisions made by a private Icelandic company. That company is now in receivership and the deposit insurance schemes are first in line to get the dosh. Projected returns are around 90-100%.
To the extent that the depositors (or the governments which foolishly guaranteed 100% of their money) suffer any losses, it’s a good thing. There’s a reason Icebank was paying above-market rates of interest on deposit; it’s called risk. Depositors knowingly accepted that risk, or were merely greedy and stupid (a rather deadly combination).
Deposit insurance creates what economists call a “moral hazard”. A small amount of insurance may be beneficial, but large levels are merely an invitation to play the “heads I win, tails you lose” game. Good for Icelanders.
Apparently this could derail Iceland’s application to join the EU. Excuse me whilst I play a sad tune on the world’s smallest violin.
That is one suspected reason for why the Icelandic government was so eager to roll over for the Dutch and the British – they were willing to bankrupt the nation to get their snouts trotter-deep into the EU troughs.
If this means I can’t join the EU I regard the referendum result as a double win.
Mike, no..I understand these were money market funds, which I am guessing were invested in commercial paper backed by the Icelandic banks asset portfolios. If anything, if central banks globally set higher interest rates then the Icelandic banks wouldn’t have gotten away with the amount of risk that they took.
Screw Gordon Ramsay. If you put all your money into the same bank, which magically offers twice the going interest rate (or whatever) then you deserve to lose your money.
There were international agreements covering bank deposit guarantees — on the other hand, traditionally a sovereign country could not be held to such agreements if it chose to abrogate them.
On the third hand, we’ve been told that sovereignty is an obsolete concept and of no significance in the modern world, except to sentimentalists. Surely we haven’t been lied to?
Those international agreements were laughably vague. In the case of the EU and the EEA they only stated that each country should set up an insurance scheme – nothing was said about governments guaranteeing such schemes and many at the time stated that no such guarantee was in effect. It was only after the 2008 crash that states scrambled to guarantee everything up to and including the kitchen sink.
Hehe, how rude! This made me laugh. But very true.
Nice to see some (apparently) Icelandic commenters here.
Apparently? u get many Icelandic imposters here do you? Well suppose on internet no one knows you might be a dog, eh? haha
Hey, I can put funny marks on the letters in my name, too! Maybe I’m Icelandic! Or Atlantean.
He actually went through the trouble…You think you know someone…:-)
No we probably don’t get a lot of Icelandic imposters here, I suspect. But judging from our server site report, Samizdata has a surprising number of readers floating in via “simnet.is” … who’d a thunked it?
The vikings are coming!
Þey don’t just have funny marks on þeir letters, but have whole additional funny letters. Amaðing
Useless trivia of the day: The letter Þ (thonn) was used both in the anglo-saxon rune system and in the scandinavian one. The scandinavian name of the rune was Þurs (giant/ogre) but the saxon name was Þonn, or Þorn (thorn). For some reason the Icelandic name of the letter takes after the anglo-saxon name and not the scandinavian.
Some historical background: Njorl’s Saga (Part II)
Cheers
Nice word, “Þorn”. Looks rather like a fine English word which we daren’t use here for fear of the dread
Jabberwockysmitebot.I think I shall keep my Atlantean name!
In addition to the thorn (Þ/þ) there’s the Eth (Á/ð), which as I understand it is pronounced roughly like the th in them. It’s also called the “edh” which is a very useful word for us Scrabble players. 🙂
The thorn and the eth sound roughly the same, too, but the eth is never used at the beginning of a word, and the thorn is almost always used only at the beginning of words. So the rule in Icelandic is “any funny letter you have not seen before should be pronounced “th”, essentially.
Back closer to the topic, I see that Britain is planning to sue Iceland over this matter. That’s amusing. What court has jurisdiction over a sovereign nation which has not consented to it? [Answer: none.] And how do they plan to enforce the judgment assuming that some compliant EU tribunal accepts the case and rules against Iceland? I’d put that claim on the balance sheet right next to those defaulted Imperial Russian (pre-revolution) bonds.
The British (and Dutch) governments and the BBC (and so on) just do not “get it”.
They continue to talk about an “Icelandic banking system” and plan to sue the Icelandic GOVERNMENT.
There are broadly three views of political economy in this area.
The socialist view – banks should be owned by the state.
The free market view – banks are private and what they do is the responbility of their managers and owerners.
“But there were low interest rates from the Bank of Iceland” – so? That did not force the privately owned Icelandic bankers to either take this money or to invest it in risky things (in the hope of offering HIGH interest rates to depositors).
And there is a third view…….
This view holds that whilst banks may be privately owned – they (and all other big corporations) are the responsbility of the state.
This view of political economy has a name.
FASCISM.
It is distressing to see the British government (and so on) take a Fascist view of these matters.
“The bank was based in Iceland, the collapse of the bank has cost us money [due to the British and Dutch government CHOICE to baillout depositors] – therefore the Icelandic government must pay us”.
That is a Fascist view of the matter and one must say so openly and clearly.
Of course the “threat to E.U. membership” is also rather amusing (if it was not so nasty in what it reveals). The Icelandic elite (the government and so on) were plotting to steal the independence of the country and make it a province of the European Union – and trying to brainwash the population into supporting their plans.
“Why risk your lives as fishermen in the North Atlanic – when you can be on welfare, financed by the E.U.”.
They may have been the line – although in my subtle (and dishonest) language.
A bit like the line of the bankers themselves – “why risk your lives….when you can come and work for our bank, as long as you do not ask any questions about where the money is from or what we invest it in”.
Lastly on “international law”.
It is such a twisted mess – thanks to treaties, declaration and the like, that the British and Dutch governments may actually have a case.
If they are willing to be unprincipled pigs they have a case.
But sadly that is exactly what the default position of, at least, the British government is.
Bless you, Paul.
Paul states that under treaties, etc., the British government may have a case. That could be partially true, if Iceland is actually a party to any such treaty (I don’t know), but even so any nation can withdraw from any treaty at any time. That’s a centuries-old principle of international law. The essence of “sovereignty” is not being subject to anyone else’s laws, unless you choose to be.
But I’ve been thinking some more about my earlier comment that “What court has jurisdiction over a sovereign nation which has not consented to it? [Answer: none.]” “Consent” is the key word there. If, as has already been noted, the political elites in Iceland actually want to burden their citizens with the obligation repay the Dutch and British (and also to join the EU) but their wishes are being thwarted* by the ignorant proletariat, this provides a perfect vehicle to ignore that vote: consent to the lawsuit, and agree to be bound by the court’s decision. That’s a win-win for everyone (well, except for the Icelandic taxpayers, of course, but they don’t really matter; they’re just sheep to be shorn).
The US has lots of experience with this charade, when it functions as the nominal defendant in a “friendly” lawsuit by some activist (usually environmentalist) organization that seeks to “force” it to do what it wants to do anyway. These lawsuits are never vigorously defended, and they provide perfect cover for what would otherwise be a politically unpopular action. (“I’m just obeying the court order; my hands are tied.”) If Iceland doesn’t aggressively resist this suit on a jurisdictional basis you’ll know you’re being played.
* “Þwarted?”
I don’t doubt for a minute that they would be tempted to do just that, but I think enough smart lawyers will be on them like ham on rye and sound the alarm if things look dodgy.
Thankfully quite a lot of lawyers were on the side of angels in the elections and the parliamentary majority is slim enough for the government to have to tread carefully (gotta hand it to the communists – their principles are twisted, but at least they have some, unlike the social-democrats).
The point is well made though and we will have to stay vigilant.
Bjarni – many thanks for your kind words.
But beware the truth in what L. says.
Remember the Icelanic people will be represented in the court case by the lawyers working for the Icelandic GOVERNMENT.
I.E. by a group that wishes to LOSE the case.
What should be clearly stated now is simple.
“Iceland is an independent nation”.
“It is the PEOPLE not the GOVERNMENT that is sovereign”.
“These were private banks – and, as such, nothing to do with the nation of Iceland, only with the managers of the banks and the shareholders of the banks”.
“Therefore we DENY your jurisdiction- we hold that you have no right to put us on trial (for that is what you are doing), especially when our defence council works for the political elite (who have shown themselves to be active enemies of the people of Iceland – working against our independence) and wants us to be found guilty”.
True it supposed to be a civil case (simply a commercial dispute), but make no mistake – it is your very independence (your life as a nation) that is on trial.
Reject the jurisdiction of the court – right now (in advance of any judgement against you).
Umm, so this is what you Icelanders do with your money? No wonder you needed a UK bailout!
Thanks Laird, that envy thing is hereby cured.
Laird I know you were just being playful – but just in case someone misunderstood….
There has been no British bailout for Iceland (although the Icelandic GOVERNMENT wants lots of E.U. aid – basically to turn the nation into a load of welfare dependent people).
There has been a British (and Dutch) bailout for British (and Dutch) depostiors in privately owned “Icelandic” banks.
Whose main managers/owners I believe happen to live in London (not Iceland).
If the British and Dutch government wish to sue people – they should sue the main people in these banks, not the people of Iceland.