AFIAA, Obnoxio was the first to pick up the story about our gummint using anti-terror legislation against Icelandic banks, which has now gone mainstream.
Be that as it may, and whatever the mechanics, this illustrates the basic principle that I outlined back in February:
"if unfriendly foreign governments (China, Russia, Saudi Arabia) invest in your country, then they haven't got you over a barrel: you've got them over a barrel."
To cut a long story, Icelandic banks were taking deposits from UK citizens and councils, lending them to Icelandic buy-out groups, who in turn used the money to buy up The High Street. All we are doing now is unravelling that process.
Friday, 10 October 2008
On Iceland
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7 comments:
I wasn't reading you back in February, but I agree whole heartedly. It's like the "owe a bank £10k they own you, owe them £100m you own them" phrase.
The best way to restore solvency is to let the commies and terrorists recycle all their pounds buying the UK, then nationalise it all.
Not SUGGESTING this though Gordon, cos we'll pay an "argentina premium" for decades to come if we stiff the foreign creditors.
Yeah but if the Ruskies move in with oodles of roubles then eventually they buy an airbase there. Let's learn to love Bjork again. www.skynews.com/foreignmatters
TM, wot? Over by the freezer section or in the car park?
I suspect that turning on the Icelanders was probably unnecessary and - in an international political sense - will backfire. In the short term the UK assets of their banks are trapped here anyway. There was no need to sieze the assets (let alone under anti-terrorist legislation which just rubs salt into the wound).
As usual Brown has adopted the unattractive custom of the British national and local civil service (and the modern police "service") of bullying someone who (in the short term anyway) can't defend themselves and, moreover, is acting legally. However, Iceland appears to be a "costless" and convenient "lightning conductor" for the anger created by the depositors' own incompetence (particularly of local authorities and various quangos). Can you imagine the Treasury doing this if it was Russian banks which held UK deposits? No - nor can I.
U, no I can't, but people who are dumb enough to deposit money with Russian banks are beyond redemption anyway, and don't have any moral entitlement to a bail out.
True but depositing substantial funds with Icelandic banks since June has been madness too (particularly for "professionals" like local authority finance officers). My point was that in Brown would not even try to bully Russia in the same way that he blithely bullies Iceland. After all Russia might do something nasty (like cut off our gas/coal supplies) whereas the Icelanders might cut off our cod supply.
Umbongo said.....
But If they cut off the Cod supply, then they cut off the fishfingers. But they own the freezer shops that need fishfingers to sell to pay back the banks..
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