A MUST READ!!! Top Economists: Iceland Did It Right … And Everyone Else Is Doing It Wrong

http://www.washingtonsblog.com/2012/...-it-wrong.html

I find myself agreeing with Paul Krugman. This must be a sign of the end times!

If Krugman gets one right, it's by accident, not design. It's hard to argue with Iceland, even for Krugman.

No doubt some clown will come on here and say, "Well, Iceland is a small country, we couldn't do that." Bullshit. The right concept will work at any level.

Ok, ok I'll say it Well Iceland is a small country. It was the perfect place to see what would happen without a bailout. Now did anybody really notice for the next time our banks ask for a bailout.

Of course, Iceland's banks (as small as they are) nearly took a few others down with them. Fortunatedly, those banks were bailed out thus avoiding a smallish domino effect that could have grown. However, comparing the impact of the failure of Iceland's banks on the world economy with the failure of US banks is sort of like comparing, well, Iceland to the US. Now, should many of those who were in charge of our banks have been let go scot-free? Nope, but they were.

Yes, Krugman is right on this one.

(The fact that he says something doesn't constitute prima facie evidence that it's wrong!)

Some people don't realize how humongous Iceland's financial sector had become relative to the size of its economy. Among others, the Icesave online savings bank offered high interest rates and collected huge deposits from British and other European customers.

But after the crisis struck, the Icelanders didn't choose to bail out everyone more or less like we did, or nationalize deposits and prop up zombie companies like the Japanese. Instead, they chose sort of a "Swedish style" prepack bankruptcy. The Swedes put their economy on a path to good health after their financial and banking crisis of the early 1990s.

I saw a recent report indicating that Iceland's economy is about 10% smaller than it was pre-crisis, but that it's now on the mend and doing much better than almost anyone anticipated a few years ago.

prima facie?

Hey, let's keep this conversation in English, buddy.

. . . Latin is dead, Fred.

prima facie?

Hey, let's keep this conversation in English, buddy.

. . . Latin is dead, Fred.


Originally Posted by Fast Gunn

OK, I'll keep it simple for you guys!

The fact that he said it doesn't mean that it's automatically and obviously wrong!

How's that?

Well, that's better, compadre.

. . . You don't need to impress us with no stinking Latin!

FastGoon pleads nolo contendre to his inability to comprehend.

As I have written a couple of times during the Great Depression the King of Sweden did something radical. He recognized the runaway inflation was going to be the economic death of many economies so he ordered all of his citizens to turn in their currency to the banks. New currency was printed and one Kronen was returned for every two turned in. This reduced the amount of currency by half which strengthened the Kronen. Within six months the depression had ended in Sweden without becoming "great".

So instead of increasing our debt by five trillion dollars and then printing money to pay our bills to China (which weakens our currency) we should be trying to cut spending as close to the real bone as possible.

That is fine and good for Iceland but the problem in the U.S. is that when the bond holders are people like the Koch brothers and the rest of the 1% that control 50% of the wealth in America one guess on who is going to win, the tax payers or the 1%.