Icelandic terror

In case anyone was in the slightest doubt that anti-terrorism laws couldn’t be applied to any situation, no matter how completely unrelated to “terrorism”, the UK government has decided to freeze Iceland’s UK assets under anti-terrorism laws.

Iceland’s prime minister Geir Haarde said it was “not very pleasant” to learn that anti-terror laws were being used to deal with the company (from the BBC)

Well, the damage done to the world economy seems to have put the impact of any standard terrorist atrocities in the shade. How ironic that the economic destruction seems to have been carried out by the staunchest believers in the world’s financial systems.

The idea that thousands of UK “savers” and dozens of UK councils put their money into Icelandic banks is so baffling that it offends logic, anyway.

It must have taken a fair bit of effort to even find an Icelandic bank. Don’t tell me they just really like Bjork. I’d assume that they chose an Icelandic bank – rather than their local bank or the Post Office – because it offered a big financial inducement in the shape of unfeasibly high rates of interest? So, basically, this investment choice was a bit of a gamble, really.

Experience eventually teaches most of us that “If it seems too good to be true, it probably is.” If you were to fall for a scam email that said you’d won a Eurolottery that you’d never entered, people would think you were a fool. No one would recompense you.

As far as I can make out, under the laws (“theories”?) of capitalism, investors have to be free to take a risk. (The idea that councils might be better off investing in their local economies would be heresy under said laws.)

Fair enough. But doesn’t the whole concept of risk imply that they might lose money if they make stupid fiscally unwise investment decisions?

Oh no, the taxpayer has to make sure they don’t lose anything…..

Well, there are a few implications of this that don’t seem to have been thought through.

All this bank propping-up is supposed to restore confidence in the banking system, isn’t it? Well, what about the unfortunate savers who stuck their money in a more solid bank and got a lower return on their investment. Shouldn’t they be compensated for the extra interest they didn’t get, solely because they were more careful? Surely, rewarding gamblers doesn’t send out a message that supports prudence.

However, the current message is that if you fuck up the economy on a truly grand enough scale, no one can afford to let you lose.

I am contemplating taking my wages to a casino. If I win, fine. I’ll be a lot happier. A few businesses might be boosted by my enhanced wealth. Blimey, I might even be able to trickle down a tip to a grateful waiter. How unselfish and wealth-generating am I?

Of course, if I lose, I expect the government to cover my losses.

One thought on “Icelandic terror

  1. UK councils may have to raise tax and cut spending if up to £1bn in savings in Icelandic banks is lost. It’s all down to the lucrative 7% interest rates offered by Icelandic banks. Unlike gambling. Both the house and player loses in this economic climate.

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