All Hail Iceland's Default

Freedom, peace and prosperity are not possible in a large country or an empire.  This is why USA was started as a federation, a republic of 13 small countries.  We still call these states, but we now say THE United State instead of THESE United States, as we said for the first 100 years or so.

Iceland is one such country, and it is defaulting, and enjoying quick turn-around.  Defaulting would be wonderful for about 348 million of the 350 million USA citizens.  But it won't happen, because a democracy is easily captured by the few.

The Iceland story is a neat, clear version of what happened in USA, read here... a quote:

Iceland’s new banking elite were intent on expanding their ownership of the economy, competing and cooperating with each other. Using their shares as collateral, some took out large loans from their own banks, and bought more shares in the same banks, inflating share prices. It worked like this: Bank A lent to shareholders in Bank B, who bought more shares in B using shares as collateral, raising B’s share price. Bank B returned the favour. The share prices of both banks rose, without new money coming in. The banks not only grew bigger, they grew more and more interconnected. Several dealings of this kind are now under criminal investigation by the special prosecutor, as cases of market manipulation.


But Icelanders are not safe yet, the big countries do not want people to know default is a happy event.  It breaks the bad guys, and ushers in peace, freedom and prosperity.

Here is the last line from the article:

Meanwhile Oddsson was appointed in September 2009 as editor-in-chief atMorgunblaðið, the leading Iceland daily, and orchestrated coverage of the crisis. A commentator said that was like appointing Nixon editor of The Washington Post after Watergate. Iceland’s elite looks after its own.

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