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[Alan Cynic]

As my old man has gold fillings in his teeth I'd better keep an extra watch on him now!

[daveofficer]

it looks like i picked the wrong month to start working in a bank...

[Cloud]

Originally Posted by Neil

Still, at least my planned trip to Reykvik next year should be considerably cheaper. They'll probably be on the Euro by then though.

I wouldn't bet on it being much cheaper - they still have to pay for their imports in hard currency, and given that no-one is going to lend them any money at a decent rate, things are still going to remain stupidly expensive there.

As for them and the Euro - apparently their economy is increasingly functioning in Euro anyway - with wages and high value goods all being done in Euro. I wouldn't be surprised if they end up keeping their currency pegged to the Euro - as it's quite surprising that it wasn't pegged in the first place.

I wonder if we'll see a bid by Iceland to join the EU now? But of course, without Lisbon, there's no way they could join...

[Neil]

Originally Posted by Cloud

I wouldn't bet on it being much cheaper - they still have to pay for their imports in hard currency, and given that no-one is going to lend them any money at a decent rate, things are still going to remain stupidly expensive there.

But their local currency has fallen significantly in value against many other currencies. Which means my British Pounds are going to get me a lot more Krónur than they would have last month. Unless they switch to the Euro of course, which may eventually be their only option if things keep going the way they are as ultimately their currency is looking like it’s going to become worthless.

Their currency isn't currently pegged to the Euro by the way.

[skuzzlebutt]

Originally Posted by Cloud

I wouldn't bet on it being much cheaper - they still have to pay for their imports in hard currency, and given that no-one is going to lend them any money at a decent rate, things are still going to remain stupidly expensive there.

do you think iceland might qualify for a lombard home owner loan?

although those adverts seem to have pretty much dried up at the moment...

[Pierre Von Mondragon]

Every credit crunch has a silver etc etc

[Cloud]

Originally Posted by Neil

But their local currency has fallen significantly in value against many other currencies. Which means my British Pounds are going to get me a lot more Krónur than they would have last month. Unless they switch to the Euro of course, which may eventually be their only option if things keep going the way they are as ultimately their currency is looking like it’s going to become worthless.

Their currency isn't currently pegged to the Euro by the way.

Ah ha, my mistake - I saw the press conference where their Prime Minister talked about the euro peg, but hadn't realised that they had abandoned their efforts to actually peg it. Apparently they actually had pegged it at one point, but later abandoned their efforts.

Although what's going on with the currency? The Euro is only running at 150kr at the moment - and they were trying to peg it at 131, so it's not dramatically devalued. But that's according to xe.com - other sites are reporting it differently, with one site claiming that the Euro has gone up to 300kr/euro. I've found an update on some site that's saying that it was trading at 340kr earlier today - so...either way it's a complicated situation.

The most reliable source I can find is the ECB themselves - ECB: Euro exchange rates ISK 10 October 2008 . It seems to suggest that the Kronur has actually collapsed, though many sites aren't offering reliable exchange data. M&S for instance, are only advertising 177kr/pound on their website.

The Iceland/Euro situation seems to be quite complex. I'm not convinced the ECB will let Iceland join the Euro in light of the mess of things that they've made, but of course, there's absolutely nothing stopping them moving to the Euro without consent of the EU. There's some quotes around saying that Iceland wouldn't be allowed to join the Euro without joining the EU first - but I suspect there's little, if anything, that the EU could do.

(edit : there's an article here that might shed some light on what's going on with their currency)

[Neil]

Originally Posted by Cloud

The Iceland/Euro situation seems to be quite complex. I'm not convinced the ECB will let Iceland join the Euro in light of the mess of things that they've made, but of course, there's absolutely nothing stopping them moving to the Euro without consent of the EU. There's some quotes around saying that Iceland wouldn't be allowed to join the Euro without joining the EU first - but I suspect there's little, if anything, that the EU could do.

The problem they have though is that their inflation is running at something like 15%. So if they were to adopt the Euro they would have to play by ECB's rules and adopt their interest rate etc. Which probably isn't really workable for them at this moment in time. Mind you, if your own currency is mince then what can you do? A rock and a hard place I think. Poor sods.

[Graham Knight]

This thread has attracted a surprising number of viewers and contributors.

I have written an article about Kondratieff, the man who forecast the present problems 82 years ago.

I thought of putting it in the new "Articles" section but there is not a suitable category. As it is too long to post here I have uploaded it and here is a link to the article.

Warning it is not for anyone of a nervous disposition. Comments welcome

Kondratieff - the good news about the World tomorrow

[Neil]

Originally Posted by Graham Knight

Kondratieff - the good news about the World tomorrow

Very interesting article there Graham, thanks.

It will be most interesting to see how the recovery (if there is one) unfolds. I'm starting to think governments are going to have to look at implementing much tighter regulation of their financial services sectors to stop a repeat of this disaster. I think it's rather telling that two countries with some of the tightest financial institution regulation laws and practices are two of the few developed countries significantly impacted by all of this mess. Those two countries are Canada and Australia by the way.