As the political leadership of the United States is obsessed with madcap schemes to collectivize massive segments of the economy, even while continuing the exportation of American jobs and the elimination of many other jobs through proposed environmental regulation which would stifle the economy if implemented, it is understandable that most citizens are keeping their gaze quite close to home: when your family, your job and your home are at risk, it is hard to think of much else.

But while it is quite understandable that most Americans are simply hunkering down, it is important to look beyond our shores to see that our crises are part of a larger pattern. Like the canary in the coal mine, the fate of the tiny nation of Iceland highlights the dangers facing the United States and Europe. Comparing a nation of 300,000 to one which is a thousand times larger might seem reckless, but consider the fact that political corruption, exploitation by powerful foreign financial interests, the machinations of the International Monetary Fund and European Union, and the abuse of "antiterrorism" laws all combined to work financial devastation on one of the smallest European nations.

The economic meltdown in Iceland began a few months before the crisis which enveloped the American economy last fall. As the Times Online reported in April 2008:

Iceland has long privatised and monetised its public assets, even including its fish stocks. Catch quotas are tradeable among fishing companies, creating a capital resource worth a total of about $5 billion that has been used as collateral for investments.

The investment boom in Iceland has created an extremely tight labour market, soaring wage costs and galloping inflation, which in February reached 6.8 per cent.

The resulting high interest rates have made the krona a favourite for currency speculators in the “carry trade”, in which money is borrowed in low-interest currencies, such as the yen, and invested in financial assets in high-yield currencies, such as the krona. However, a loss of confidence has pricked the bubble in the carry trade, causing the krona to tumble.

Corporate and household debt levels have soared and much of the corporate debt is believed to be denominated in foreign currencies, a consequence of the acquisition spree by Iceland’s ambitious companies. The falling value of the krona is likely to put pressure on the ability of these companies to service that debt, creating further problems for the economy.

In a very short period of time, the speculation and massive debt swamped Iceland’s economy and left devastation. Iceland Review Editor Bjarni Brynjólfsson wrote on October 15 of last year:

People here are extremely angry. We are angry because we were told that everything was in order with the banks. More than 50,000 small shareholders had stakes in the banks and their savings were simply wiped out. These were ordinary people like you and me who had decided to stick with the banks through the financial meltdown and had been assured that everything would be all right in the long run.

We are angry because the banks seem to have organized programs to trick people in Iceland into placing their savings in bond accounts which were claimed to be 99 percent safe instead of keeping them in normal deposit accounts.

We are angry and shamed over the fact that normal people overseas have to tighten their belts and face loosing their savings because of our banks.

We are angry with the politicians who obviously knew of the difficulties the banks were facing after many warnings from abroad and from skeptics of the Icelandic economic boom who said that the banks had become too large and greedy.

We are angry with the billionaire owners who ran the banks and pretty much everything else in this country and have now disappeared in times of trouble.

We are angry with the authorities who did not step in and demand some securities from the conglomerate banks to prevent this economic meltdown from happening.

We are angry with ourselves for being foolish and for not having listened to the voices that warned us about the recklessness of the banks.

And then, Iceland’s ‘ally’— the United Kingdom — exploited antiterrorism laws to seize Icelandic assets and hold the nation hostage. Again, in the words of the Iceland Review editor:

And we are extremely angry over the outrageous behavior of Britain’s Prime Minister Gordon Brown who invoked anti-terrorism legislation to freeze the assets of Icelandic banks in the UK when the British government had been assured by our government that depositors of Icelandic banks in the UK would be paid. Many believe this led to the downfall of Kaupthing Bank, the last of our three largest commercial banks to remain standing after the others were nationalized, like the last tree in the hurricane.

We have always considered Britain to be one of our closest allies and friends. For a British politician to gain momentum by stepping on the toes of a miniscule state like ours is simply too much for us to stomach on top of the economic difficulties we are now facing. It is like stomping on a lying man’s head.

Now, more than a year into the crisis, the ‘free fall’ Iceland’s economy continues. According to a report at Bloomberg.com:

Prime Minister Johanna Sigurdardottir, who took office in February, pinned hopes for a recovery on the International Monetary Fund after Kaupthing hf, Landsbanki Islands hf and Glitnir Banki hf racked up $80 billion in debt, 16 times Iceland’s economic production. Now she says the economy may implode again as a dispute over Icelandic savings accounts held by overseas depositors delays a promised $5.1 billion bailout. ...

Iceland’s economy will shrink 8.5 percent this year and consumer prices will climb 11.7 percent, both the worst performances among the world’s 33 advanced economies, according to the IMF’s latest forecasts. As the rest of the world begins to recover, Iceland’s recession will stretch into next year, with the economy contracting 2 percent, more than any developed nation except Ireland.

Unemployment will rise to 8.6 percent this year, from less than 1 percent in December 2007, the IMF estimates. Iceland will still trail the eurozone average of 9.9 percent and Spain’s 18.2 percent jobless rate, the highest in the developed world. 
One of the hardest-hit industries has been construction, where 202 companies filed for bankruptcy in the 11 months after the crash, 67 percent more than in the same period a year earlier, according to data compiled by Statistics Iceland.

Skyrocketing deficit spending by federal and state governments, combined with the burgeoning ranks of the unemployed and underemployed, unbelievably high rates of bankruptcy, and allegations of a concerted effort to undermine the dominance of the American dollar in the global economy all point out troubling parallels. (To make the parallel even more complete, feel free to substitute Chinese leverage over the America’s debt — and our economy, in general — for the role played by the United Kingdom in Iceland’s crisis.)

With few serious solutions to America’s crisis actually being considered in the counsels of the mighty, it is certainly time to become far more aware of the on-going crisis, and the shapes it is assuming throughout the world.

Rt. Rev. James Heiser has served as Pastor of Salem Lutheran Church in Malone, Texas, while maintaining his responsibilities as publisher of Repristination Press, which he established in 1993 to publish academic and popular theological books to serve the Lutheran Church.  Heiser has also served since 2005 as the Dean of Missions for The Augustana Ministerium and in 2006 was called to serve as Bishop of the Evangelical Lutheran Diocese of North America (ELDoNA). An advocate of manned space exploration, Heiser serves on the Steering Committee of the Mars Society. His publications include two books; The Office of the Ministry in N. Hunnius' Epitome Credendorum (1996) and A Shining City on a Higher Hill: Christianity and the Next New World (2006), as well as dozens of journal articles and book reviews.

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Hugh Rossen said:

May I also recommend you watch "Social Genocide" for a full appraisal of the coming USA meltdown? I highly recommend everyone to watch "Social Genocide", also known as "Memoria del Saqueo" available at Google video - for a full appraisal of the coming USA meltdown This is a Documentary about the economic collapse of Argentina in 2001. In this documentary, Fernando Solanas points out the major corporations, Big Wall Street firms and Bankers (Chase, Citibank, Bank Of America, Merryl-Lynch, etc) and their role in plundering the Argentinian nation. Even the IMF got involved into an unprecedented wealth transfer scheme! There was also at some point an Obama-like candidate elected for presidency who turned out worse than the prior administration and facilitated this huge mafia of mostly international bankers to get away with the destruction of Argentina. Mr. Solanas, the author of the documentary, has been targeted for assassination and have survived 2 attempts.

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October 14, 2009
Votes: +5

DDW said:

I doubt very much That those who would rule are the least bit interested in learning anything that would help stop the coming meltdown. The only things those who would rule are interested in is the total destruction of nations as separate and sovereign entities, the organizing of a world government and the enslavement of the entire human race. It is very sad that no one seems to be interested in standing up and striking them down.

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October 14, 2009
Votes: +5

DDW said:

Social Genocide/Memoria del Saqueo I watched it. Frightening and now very, very close to our own nation. I noticed that the people were/are unarmed. I wonder how quickly these atrocities would be put down if the people were armed? Our Founding Fathers were very wise indeed to insist that the RIGHT of the people to keep and bear arms not be infringed. It is my personal opinion that most of those who would rule us are nothing more than schoolyard bullies grown up and therefore mostly cowards who would neve dare to try opressing an armed people.

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October 16, 2009
Votes: +1

DDW said:

The video mentioned above by Mr. Rossen is a 12 part presentation and can be found here: http://www.cosmolearning.com/d...tinaacirc/ It is well worth watching every single minute. And for those who think that what is pictured in the video can't happen right here in these United States of America, you are at best foolish and, at worst, insane because everything you will see in this video is so close that you can almost reach out and touch it. People, please watch this video presentation.

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October 16, 2009
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