Tuesday, March 6, 2012

Young Conservatives Want to Legalise Drugs

It seems that conservatives in Iceland are more enlightened than those in Canada.

Young Conservatives Want to Legalise Drugs.

Monday, March 5, 2012

Iceland's ex-PM Geir Haarde tell court he is innocent

And so begins the blame game.

My own perhaps ill informed opinion is that the buck stops with Bill Clinton, who forced US banks to loan to high risk borrowers, the better to give those without hope of ever owning their own home a leg up. This resulted in the banks developing arrangements where the impoverished need to pay little up front, and were offered the assurance that by the time their payments rose dramatically, they could sell for a profit. Beware the law of unintended consequences.

No one seems to have seriously considered the flaw in this arrangement, which was that (as with every pyramid scheme) eventually it would not be possible to sell houses for a profit, and the US would be left with a nation of debtors who were no longer prepared to make payments on that debt.

That said it may well be that the Icelandic government really was neither aware or particularly interested in the internal workings of their own banking industry. It is the wise person who checks for defects in a system before they manifest themselves. And given the economic prosperity that the banking sector offered Iceland, it would at the time have been perhaps seen as looking a gift horse in the mouth to question the source of that prosperity.

I am very grateful to my own federal government for its regulation of the Canadian banking system. While it almost certainly resulted in our banks being denied the opportunity to play roulette with our nations funds, it as certainly ensured that our banks never bought into the types of high risk debt that came close to derailing the US and British economy, and did derail the Icelandic economy.

Sunday, March 4, 2012

The Arctic League

The proposal for an Arctic League is interesting because it echoes one of my arguments in favour of Iceland joining Canada.. specifically that it would make it easier for Canada through Iceland to become a member of the Nordic Nations with ties to Scandinavia, while making Iceland both geographically and politically central to such a cross Atlantic cooperative.

My concerns with the proposed "Arctic League" is that were I an American I would feel it very unfair to exclude Alaska from this league, while if I was a Russian, I'd feel that this was a western voting block designed to oppose or thwart Russia's claims in the Artic.

With Russia, and/or Alaska at the table, smaller nations might well feel intimidated, but they might find themselves potentially equally intimidated if absent Russia and/or Alaska at the table, either took offence at the existance of such an Arctic League.

Canadian Ecomists discuss the idea..

The comments on this blog (which discusses the adoption of the Canadian Dollar by Iceland) seemed pretty interesting.

Iceland and the Loonie

Friday, March 2, 2012

Canada ready to discuss letting Iceland share currency

In an interesting turn of events, it appears that Canada is ready to discuss letting Iceland use the Canadian Dollar as its internal currency.


On the one hand immediate thoughts turn to the consequence of Europe permitting Greece to adopt the Euro as its national currency, and fears that Iceland might become to Canada what Greece has become to Europe. But Iceland is not Greece.

Iceland has a tiny population compared to Canada, and an industrious workforce, that has been self sufficient these last thousand years. While there perhaps might need to be checks and balances on borrowing, I don't see why including Iceland in the block that uses the Canadian dollar, should alarm anyone more than are already alarmed by the ability of each of the provinces of Canada to rack up provincial debt on that same Canadian dollar.

So presuming that Icelanders were shopping for a currency, what advantages would they derive from employing the Canadian dollar as their currency. Since the obvious alternative is the Euro, right now the Canadian dollar appears more robust. Buying into the Euro would implicitly mean buying into the bailout of Greece, and potentially other European nations with similar difficulties. Long term, I expect the Canadian dollar to continue to rise against the US Dollar.

The US is horribly over-extended, without seemingly the political will to address its deficit. As is said jokingly of the US, "a billion here, and a billion there, and pretty soon you are talking real money". In addition the US dollar derived much of its historic economic strength from being the defacto reserve currency which until recently nations tended to horde against some future rainy day. The days of the US dollar being a trusted currency given its recent collapse in value are over.

Love to know what Icelanders think about the preferred Icelandic currency.

Icelandic Economists argue for the Canadian Dollar over the Euro