Some politicians, at least, are finally waking up.
Since everyone missed the sterling example (pun intended) of Iceland defaulting on British and Dutch bankers, perhaps some will now sit up and take notice of the Portuguese Socialist Party threatening to take the “nuclear option” on German and French bankers:
“We have an atomic bomb that we can use in the face of the Germans and the French: this atomic bomb is simply that we won’t pay,” said Pedro Nuno Santos, vice-president of the Socialist Party in the parliament.
“Debt is our only weapon and we must use it to impose better conditions, because recession itself is what is stopping us complying with the (EU-IMF Troika) accord. We should make the legs of the German bankers tremble,” he said.
Mr Santos is right.
Debt as a weapon can be a two-edged sword. At the level of nations, at least.
The bigger the debt, the bigger the danger for the lender.
If you or I default on our debts, we’re in the poorhouse.
If a nation defaults … things get better. Faster.
Icelandic politicians woke up. Only after nearly the entire population took to the streets, of course.
Rather than have “the nation” (ie, the taxpayer) take on the debts of its collapsed banks, the people insisted on telling the British and Dutch bankers where to go (ie, they defaulted).
In the face of enormous international pressure to “do the right thing”, and “honour the debts” by “socialising the losses”.
The Icelandic people didn’t fall for the “Too Big To Fail” con.
And so, how is Iceland travelling today?
From a must-read article in Business Insider:
Iceland’s basic economic indicators are now stronger than countries that received bail-outs.
Iceland’s economy will have shrunk by an average of 0.75% a year in the 4 year period of 2008-2012. For comparison, Ireland’s economy has declined at a rate just under 2% while Greece will have decline 1.6% a year.
Unemployment has been less of a problem in Iceland as well:
- Iceland: 5.8%
- Ireland: 14%
- Greece: 15%
- Portugal: 12.4%
Iceland’s economy today is growing, with 3% annual growth expected in 2012, and the government anticipating a budget surplus by 2013:
Click to enlarge
All the fearmongering that is pushed by banksters, their shadow banking overlords in the IMF, World Bank etc, and of course, their political muppets, about the “dire” consequences of letting banks fail or defaulting on national debt … is self-serving lies.
It’s long, long past time that all the rest of the people of the world followed Iceland’s lead, and chose to “make the legs of the bankers tremble”.
Barnaby Is Right 
The thing you need to keep in mind in the case of Iceland though is that the Icelandic Krona was devalued some 60% to the USD.
I don’t know what the exchange rate is now but the people of Iceland have well & truly paid for their ‘growth’.
All the greater the argument for national self-sufficiency, JMD. Starting with the essentials … like food security.
Funny how threatening to “not pay” for the private citizen often ends in the defaulter becoming a pal of QE2–aka the one way trip at Her Maj’s Pleasure, in the real world!