Pay up, Iceland!

[.Morticia.]

No government should EVER secure or indemnify ANY private investment, EVER!

Try running any economy when people can't trust the safety of their money in the bank, no one would save anything (more debt) and /or keep them money under the bed!

Are you saying capitalism is unworkable ?

[Coito ergo sum]

What life must be like in Iceland with no strip clubs....dark and gloomy...empty ATMs and failed banks... no trees....

How's that dried and salted shark meat these days?

[Ian]

What life must be like in Iceland with no strip clubs....dark and gloomy...empty ATMs and failed banks... no trees....

How's that dried and salted shark meat these days?

Don't make fun of Iceland too much. They'll make that unpronounceable volcano erupt again.

[Coito ergo sum]

Or, is it Eeeslahnd?

[Seth]

No government should EVER secure or indemnify ANY private investment, EVER!

Try running any economy when people can't trust the safety of their money in the bank, no one would save anything (more debt) and /or keep them money under the bed!

Works just fine, thanks. That you have to take risk when you give your money to someone else to hold is not a matter for the government to act as insurer. The public should not have to bear the risk that you invested or placed your money in an unreliable, unsafe institution or bad investment. It's your money, you take care of it, at your expense.

[Seth]

No government should EVER secure or indemnify ANY private investment, EVER!

Try running any economy when people can't trust the safety of their money in the bank, no one would save anything (more debt) and /or keep them money under the bed!

Exactly. That's the same dilemma we have here in Ireland, except on a much larger scale. A much, much larger scale. And with interest rates being as low as they are, depositors are not putting their money in banks in the first place to try and get a big return on their investment. They want security. If the banks won't give them that, then hello mattress!

They need to distinguish between security and return on investment. They can still put their money in the bank, just put it in a safe box rather than investing it in the bank's money-making interest-bearing schemes.

What they want, but can't have right now, is secure INVESTMENT, and a return on that investment of their full investment plus interest. Unfortunately, there is a thing called "risk" involved in ANY investment of money in expectation of profit. Banks have been traditionally safe investments, but no more. That's why banks that have imprudently invested the money of their depositors should GO OUT OF BUSINESS, not be bailed out. That way they cannot repeat the mistakes, and other, more trustworthy banks will spring up in their place.

Banking panics are simply a feature of life in any economy. Before the Federal Reserve, bank panics happened fairly regularly, but they were small in scale, limited in scope, and did minimal damage to the overall economy because the banks were small and INDEPENDENT, and were not enormous international conglomerates with branches everywhere that, when they fail, can collapse an economy because they are "too big to fail."

It's up to consumers to be prudent with their money, and only invest (risk) that which they can afford to lose. The rest should indeed be held "under their mattress" or in a safe deposit box, as a hedge against bank panics and recessions. That's sensible money management. Unfortunately, greed gets in the way, and people expect to be able to invest (risk) their money without risk, and that the government (everybody else) will bail them out if their investments go sour. That's just delusional.

[Gallstones]

There is a book--I just finished it--that sheds light from all directions, onto this type of situation.

The Worst Hard Time

The left and the right and the people in the middle; government subsidies and bailouts, human ignorance and greed and the consequences that were wrought.

[Sælir]

What life must be like in Iceland with no strip clubs....dark and gloomy...empty ATMs and failed banks... no trees....

How's that dried and salted shark meat these days?

We have strip clubs, the strippers just have to have thongs on
It´s no longer dark and gloomy and soon it will be bright the whole day and night.
(I will not mention the failed banks and the lack of trees )

We don´t dry and salt shark meat. That would just be stupid

[klr]

No government should EVER secure or indemnify ANY private investment, EVER!

Try running any economy when people can't trust the safety of their money in the bank, no one would save anything (more debt) and /or keep them money under the bed!

Exactly. That's the same dilemma we have here in Ireland, except on a much larger scale. A much, much larger scale. And with interest rates being as low as they are, depositors are not putting their money in banks in the first place to try and get a big return on their investment. They want security. If the banks won't give them that, then hello mattress!

They need to distinguish between security and return on investment. They can still put their money in the bank, just put it in a safe box rather than investing it in the bank's money-making interest-bearing schemes.

That's little different to stashing it under the mattress, as it still takes it out of the economy. "Money makes the world go round ..."

What they want, but can't have right now, is secure INVESTMENT, and a return on that investment of their full investment plus interest. Unfortunately, there is a thing called "risk" involved in ANY investment of money in expectation of profit. Banks have been traditionally safe investments, but no more. That's why banks that have imprudently invested the money of their depositors should GO OUT OF BUSINESS, not be bailed out. That way they cannot repeat the mistakes, and other, more trustworthy banks will spring up in their place.

As pointed out above, interest rates have been so low for the few years that "investing" doesn't accurately describe leaving your money in a deposit account, unless you were prepared to leave in on a long-term deposit. Even then rates of return have been pretty low, and not nearly enough at times to keep pace with inflation. Incidentally, one of the reasons for low interest rates for savers was because foreign institutions were offering prodigious amounts of cheap credit which helped to fuel the property bubble.

It's up to consumers to be prudent with their money, and only invest (risk) that which they can afford to lose. The rest should indeed be held "under their mattress" or in a safe deposit box, as a hedge against bank panics and recessions. That's sensible money management. Unfortunately, greed gets in the way, and people expect to be able to invest (risk) their money without risk, and that the government (everybody else) will bail them out if their investments go sour. That's just delusional.

I haven't been greedy. I turned down numerous opportunities to "invest" over the last number of years. If I take my money out of the system, the entire economy suffers as a result. It is in the interests of the government to encourage - via legislation, policy and other means - an environment where citizens feel confident that personal savings are safe in the banking system.

Low risk implies low return, and vice-versa.

[Tero]

They cant go back to furs...no mammals to hunt...so they should go to dried cod as the monetary unit.

[Coito ergo sum]

No government should EVER secure or indemnify ANY private investment, EVER!

Try running any economy when people can't trust the safety of their money in the bank, no one would save anything (more debt) and /or keep them money under the bed!

Works just fine, thanks. That you have to take risk when you give your money to someone else to hold is not a matter for the government to act as insurer. The public should not have to bear the risk that you invested or placed your money in an unreliable, unsafe institution or bad investment. It's your money, you take care of it, at your expense.

It depends what kind of monetary policy you want to have. By insuring certain accounts, the economy will get far more money available for loans and investments. If the bank accounts were uninsured, I'd stuff my money in a mattress before trusting the piece-of-shit scumbag thieves at the bank.

[Coito ergo sum]

What life must be like in Iceland with no strip clubs....dark and gloomy...empty ATMs and failed banks... no trees....

How's that dried and salted shark meat these days?

We have strip clubs, the strippers just have to have thongs on
It´s no longer dark and gloomy and soon it will be bright the whole day and night.
(I will not mention the failed banks and the lack of trees )

We don´t dry and salt shark meat. That would just be stupid

Errr....kæstur hákarl -- fermented and dried shark meat.

Hákarl is traditionally prepared by gutting and beheading a Greenland or basking shark and placing it in a shallow hole dug in gravelly-sand, with the now-cleaned cavity resting on a slight hill. The shark is then covered with sand and gravel, and stones are then placed on top of the sand in order to press the shark. The fluids from the shark are in this way pressed out of the body. The shark ferments in this fashion for 6–12 weeks depending on the season.
Following this curing period, the shark is then cut into strips and hung to dry for several months. During this drying period a brown crust will develop, which is removed prior to cutting the shark into small pieces and serving. The modern method is just to press the shark's meat in a large drained plastic container.

http://en.wikipedia.org/wiki/H%C3%A1karl

[Seth]

No government should EVER secure or indemnify ANY private investment, EVER!

Try running any economy when people can't trust the safety of their money in the bank, no one would save anything (more debt) and /or keep them money under the bed!

Exactly. That's the same dilemma we have here in Ireland, except on a much larger scale. A much, much larger scale. And with interest rates being as low as they are, depositors are not putting their money in banks in the first place to try and get a big return on their investment. They want security. If the banks won't give them that, then hello mattress!

They need to distinguish between security and return on investment. They can still put their money in the bank, just put it in a safe box rather than investing it in the bank's money-making interest-bearing schemes.

That's little different to stashing it under the mattress, as it still takes it out of the economy. "Money makes the world go round ..."

... until you spend it on something. There is no moral or legal obligation to invest your money, you're perfectly entitled to sit on it until you need it.

It is in the interests of the government to encourage - via legislation, policy and other means - an environment where citizens feel confident that personal savings are safe in the banking system.

Only within limits. At some point the government has to allow failing banks to fail so that they can be replaced by banks that operate better. Moreover, it is in the interests of fiscal sanity for individuals and businesses to live within their means and invest wisely, and accept the consequences of investment risk without expecting the taxpayers to bail them out of their bad judgment.

[Coito ergo sum]

Only within limits. At some point the government has to allow failing banks to fail so that they can be replaced by banks that operate better. Moreover, it is in the interests of fiscal sanity for individuals and businesses to live within their means and invest wisely, and accept the consequences of investment risk without expecting the taxpayers to bail them out of their bad judgment.

The insurance doesn't have to go away when the bank fails. The insurer can pay the investors (account holders) and the bank can fuck the hell off. That's what should have happened. Let the bank declare bankruptcy, and have the Trustee audit the books. Any irregularities can be reported to the authorities, and the fuckwad criminal bankers can get prosecuted. Instead, big dogs at the major financial institutions saw the shit hitting the fan and tricked the Congressional cowards into believing the sky was falling, and so we wrote a blank check to the criminal fuckwad financiers who were basking extorting the government. Instead of investigating and prosecuting the criminals, we bailed them out.

[Seth]

Only within limits. At some point the government has to allow failing banks to fail so that they can be replaced by banks that operate better. Moreover, it is in the interests of fiscal sanity for individuals and businesses to live within their means and invest wisely, and accept the consequences of investment risk without expecting the taxpayers to bail them out of their bad judgment.

The insurance doesn't have to go away when the bank fails. The insurer can pay the investors (account holders) and the bank can fuck the hell off. That's what should have happened. Let the bank declare bankruptcy, and have the Trustee audit the books. Any irregularities can be reported to the authorities, and the fuckwad criminal bankers can get prosecuted. Instead, big dogs at the major financial institutions saw the shit hitting the fan and tricked the Congressional cowards into believing the sky was falling, and so we wrote a blank check to the criminal fuckwad financiers who were basking extorting the government. Instead of investigating and prosecuting the criminals, we bailed them out.

I agree in principle, but where do you draw the line? Who is defined as an "innocent investor," and using what criteria? I think that the free market and civil courts are adequate to the task of keeping rapacious bankers in line. Allow cheated investors to leave the bankers with nothing but their underwear.