The British Prime Minister, may be, according to an article in The Telegraph, be going blind. He is already blind in one eye, from an accident when he was a teenager. Now however, his other eye is causing problems. Sufficient problems that his 'friends' are worried he may go blind at any moment, bumping into things, or staring off into the sea of blankness.
Not a good idea at this juncture of problems in the world, to be going blind.
As bad as that may be, Iceland is worse off:
Iceland's government privatized the only three banks which had been owned and operated by the government. Like banks in the UK and in the US, the Iceland banks decided to get into the high-risk, high-return investment business - that is where all the money was at.
All three banks have failed and the government has taken them over. The problem is, Iceland has only €2 billion in foreign-exchange reserves. If the banks are on the hook for €100 billion, then Iceland is looking at potential losses 50 TIMES its total reserves.
The national currency, the krona "has ceased functioning as a currency outside Iceland" according to the Wall Street Journal.
Iceland now has the financial underpinnings of a third world country - and they would be the equivalent of a fourth-world country if there were any.
Iceland is bankrupt. Iceland can't find people or countries that will lend it any money to cover the bank shortages. If things are as bad as the Wall Street Journal points out, "Iceland's tiny treasury can't back its banks' obligations then that the country might default on its sovereign debt." That would have an effect on many other countries struggling with debt!!! They may consider defaulting on their debt.
From bad to worse, and it could be much worse ....
Financial crisis: Countries at risk of bankruptcy from Pakistan to Baltics
By Ambrose Evans-Pritchard
10 Oct 2008
Nuclear-armed Pakistan is bleeding foreign reserves at an alarming rate leading to fears that it could default on its loans.
There are mounting fears that Ukraine, Kazakhstan, and Argentina could all now slide into a downward spiral towards bankruptcy, while western banks exposed to property bubble across Eastern Europe have seen their share price crushed.
The markets are pricing an 80pc risk that Ukraine will default, based on five-year credit default swaps (CDS) – an insurance policy on a country being able to pay its debts.
The country's banking system has begun to break down after years of torrid credit growth; its steel mills are shutting as demand collapses; and the political crisis is going from bad to worse.
iceland
economic
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