Crisis management

The Icelandic government is giving the Bush administration a run for its money in the bad crisis-management category.

Its now been three weeks since the economy hit the fan and the government has become specialists in one thing only, giving interviews and press conferences that don’t tell its citizens anything.

Today the Central Bank hiked its interest rates to 18% without notice. They have kept the rates above 10-15 for four years now and the sound we heard this morning was the nation screaming with pain as the knife was twisted in the wound.

The problem is the krona, a miniscule currency that the government floated a few years back and now its drifting to hell with Icelandic homes and businesses. If there ever was an argument for a universal currency, the World Dollar or Unipound, then Iceland can show us the lessons. Thomas L. Friedman has long argued that the world is flat and we are all interconnected. That is why the krona has no chance. To curb domestic spending is to invite foreign and domestic currency speculators and hedge funds to rape and pillage as they wish. A vicious circle where the high interests end up causing inflation in themselves.

The cost of Iceland’s ridiculously patriotic resistance to the stronger economic shelter of the European Union and the Euro will be massive. Expect more scenes like the one in Reykjavik last night when members of Parliament were booed when answering questions from their voters, scrambling for idiotic…sorry idiological shelters that have blown away.

Many have already lost their savings, more and more are losing their jobs, how soon will people start losing their houses? The government for one is not telling anyone anything.


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