Tuesday, 7 October 2008

The disappearing loan

It is becoming all too clear that Iceland is run by a bunch of incompetents. They fail to regulate their banks, who run up huge unmanagable stock of external liabilities. Their financial system goes into meltdown, while the government makes undeliverable promises guaranteeing the deposits of their effectively bankrupt banks.

Earlier today, incompetence stepped aside and was replaced by comedy. The Icelandic Central Bank annouced that it had secured a $5.4 billion loan from Russia. Later, it turned out that the two countries had "decided to start" negotiations.

Here is an interesting question; what will Russia's terms for such a huge loan to such a sparsely populated country?


Anonymous said...

Russian foreign minister must have creamed his pants when he got the call from Iceland. Basically buying a country on the edges of the EU. You can be sure this is the beginning of Russia's economic take-over of western countries. Wait until winter gets going, and there will be more fun and games.

Chris said...

Yes, getting a warm water port and wresting it away from the US would be a coup for the Russians but, as naked capitalism has said recently, the Russians need the price of oil to stay over $90 USD to make it with all of their increased spending.

Anonymous said...

Someone with a better memory of geopolitics could tell me how near Iceland is to the oil and to that bit of the artic sea floor that the Russians recently put their flag in.


dearieme said...

It's an unsinkable aircraft carrier. Unless God decides otherwise.

fajensen said...

People will say: Better Russian influence than the sleazy Americans and their scummy Saudi "allies"!