Iceland's Economy Fails

What happens at the end of an economic collapse?  People in Iceland today awoke to a currency that has hyper-inflated to the point that it is unable to trade on the spot market.  The currency, the krona, has ceased be traded in the world currency market and was last traded at 340 kronas to 1 euro.
The banks have failed, their economy is at a standstill, inflation is expected to jump 50-75% in the coming months, and all trading in the equity market has been suspended until October 13th.

Oct. 9 (Bloomberg) — Iceland’s government seized control of Kaupthing Bank hf, the nation’s biggest bank, completing the takeover of a financial industry that collapsed under the weight of foreign debt.
Iceland is guaranteeing Kaupthing’s domestic deposits and taking control of banks in an attempt to provide a “functioning domestic banking system,” the country’s Financial Supervisory Authority said in a statement on its Web site today.
The debts of the Icelandic banking system are too big for the government to repay…

“There is no way that the Icelandic population can assume responsibility for the private debt” that the banks have built up, Haarde said yesterday.
Other countries are in a better situation. The U.K.’s banks will get a 50 billion-pound ($87 billion) government lifeline and emergency loans from the central bank after the freeze in credit markets threatened to bring down the financial system.
The Federal Reserve, the European Central Bank and four other central banks lowered interest rates yesterday in a coordinated effort to ease the economic effects of the worst financial crisis since the Great Depression.

Read the rest of the Bloomberg article here or see the bank’s press releases and news articles here.
Let’s not forget how all of this relates to an agrarian life.  When you produce your own food, own your own land, and are able to live independently of the world economic system, you are not dependent on the stability of your currency.  You are still connected to it, but not dependent on it.  There is a big difference.

4 Comments

  • Tracy says:

    For those of us who don’t own our land outright, it is can be a scary time. We can certainly live without electricity, natural gas (we have the new woodstove sitting here ready to be put in), etc….but what do we do if we don’t own our property??? We have done the best we could…well not really because if we had our heads on straight 15 years ago we would be sitting on property we owned….but reality didn’t sit in until about 2 years ago. So we did manage to find the cheapest property we could find in our area without having a house that was falling down, we put our 20% down (which is now I hear is unheard of) and have been paying. Our goal is to pay as much extra as we can each month…which throws the plans out the window of saving to adopt again………..
    Thank God we have no other debt, the freezers are full, an abundant harvest this year is canned and in the pantry & cellar, and lots of beans, rice, and wheat is stored too!

  • Tracy says:

    I caught my mistake…I meant to say which I now hear is unheard of. 🙂

  • There IS a big difference. Thank you for sharing these blog posts, Paul. We learn so much each time we read here.
    Our family is in the process of buying over 3 acres so we can live more self-sustainably too. Our goal, like the previous poster, will be to pay it off as quickly as possible.
    We, too, are storing rice and wheat, as well as canning, etc.
    Honestly, your blog has helped us in this direction. After getting to know your family a bit on the QF Digest, then reading your blog about moving to Vaughnshire, plus seeing your family on the “Inherit The Land” DVD, we have been intriqued and in prayer.
    It’s interesting to see the Spirit of God move so many Christians to a more agrarian lifestyle. Just packing up and moving to the country.
    We have prayed for God to open a door for us too, and it looks like He has.
    We pray that God will bless our little property and give us the grace to use it for His glory! Thank you for your faithfulness to share on your blog.
    Blessings to your farm.
    Becki, for the Liebl’s in WI

  • PaulTN says:

    Tracy,
    Sorry to be so late in responding to this. I wanted to write a post about not having fear… but there is so much going on both globally and here on the farm that I haven’t been able to get to it.
    Here is my take. Even though the government is going to be pushing us further into a socialistic state, you are still going to be better off than most of the people in the nation. Most of the people are in debt up to their eye balls.
    I don’t recommend government programs, but I think there is going to come a day where we will be subjected to government programs whether we want them or not. The government may claim they own all the land and allow us to live on it, or they may force us to live in the city. As much as I despise that notion, it is not unique in history and God is still God if this happens.
    The bottom line that we need to remember is that we are not in control. God is! That is the comfort we can rest in. There are Christians in communist China today and they live and breathe and have their very being in the same Lord and Savior whom we serve.
    There have been God’s people throughout history who have faced worst governments than the US and they still served the Lord and are at this very moment staring into his face gathered around his Great throne in Heaven!
    To say it another way, it’s only this world where we are passing through and doing our best to honor Christ as we do.
    We make our best plans and desire good things for our children. We do our best to live according to His word. We try to “owe no man” as the scripture declares, but at the end of the day we may be doing nothing that has value at least as far as our original intentions are concerned. We may try to build a multi-generational farm that we would love to see our grand children living on. But that may not happen, it’s not in our control. But regardless of the physical location, we are instilling in our children the principles we are to live by as Christians, so that when they come out of bondage into a free land once again, they will know how to live… Or perhaps, with just enough prayer and faith, God will allow our children to gain control of this nation and re-establish it on the principles of His word! Perhaps, they will be the ones who will make this land, the land of our fathers, a free land once more!
    No doubt about it, we are living in exciting times. Hard times, but very exciting and as long as we fear the Lord, we need not fear any man!

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