Skip to comments.Iceland Is Thinking Of Adopting The Canadian Dollar (and Canada might allow it to)
Posted on 03/02/2012 10:46:32 AM PST by SeekAndFind
Iceland is reportedly looking to ditch their unstable currency and adopt the Canadian dollar, the Globe and Mail reports — and Canada might let them.
Canadian ambassador Alan Bones is due to say tomorrow that if Iceland is sincere in its intention, the two countries should enter talks.
Ambassador Bones was reportedly approached last year by a number of prominent Icelandic businessmen.
The plan seems to be the latest unorthodox idea in Iceland's remarkably successful recovery. It may work as a prevention against the economic disaster in 2008, providing a stable and liquid currency, but would leave the country less in control of its own economy.
7 out of 10 Icelanders are reportedly in favor of the plan, but the official hope is currently to join the euro.
Read more details at the Globe and Mail >
(Excerpt) Read more at businessinsider.com ...
ORIGINAL ARTICLE FROM THE GLOBE AND MAIL
Iceland eyes loonie, Canada ready to talk
For 150 years, no country has expressed interest in adopting the Canadian dollar — the poor cousin to the coveted greenback.
But now tiny Iceland, still reeling from the aftershocks of the devastating collapse of its banks in 2008, is looking longingly to the loonie as the salvation from wild economic gyrations and suffocating capital controls.
And for the first time, the Canadian government says its open to discussing idea.
In brief remarks to be delivered Saturday in Reykjavik, Canadian ambassador Alan Bones will tell Icelanders that if they truly want the Canadian dollar, Canada is ready to talk.
But he will warn Icelanders that unilaterally adopting the loonie comes with significant risk, including complete loss of control over their monetary policy because the Bank of Canada makes decisions only for Canadians and the Canadian economy. Hell caution, for example, that giving up the krona in favour of the Canadian dollar (CAD/USD-I1.01-0.004-0.35%) will leave the country with few levers, short of layoffs, to counter financial shocks and fluctuations in the loonie.
A group of prominent Icelandic business leaders approached Mr. Bones last year about the idea. And his speech Saturday, to a meeting of the opposition Progressive Party, marks Canadas first public response.
The Bank of Canada, which referred all calls to the Finance department remains tight-lipped.
We dont speculate on another countrys currency or domestic issues, Finance department spokesman Jack Aubry said.
Theres a compelling economic case why Iceland would want to adopt the Canadian dollar. It offers the tantalizing prospect of a stable, liquid currency that roughly tracks global commodity prices, nicely matching Icelands own economy, which is dependent on fish and aluminum exports.
Theres also a more sentimental reason.
The average person looks at it this way: Canada is a younger version of the U.S. Canada has more natural resources than the U.S., its less developed, has more land, lots of water, explained Heidar Gudjonsson, an economist and chairman of the Research Center for Social and Economic Studies, Icelands largest think tank.
And Canada thinks about the Arctic.
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Canada, the new empire.
Take that, biatch.
Why not? Panama and the Bahamas essential use the US dollar
RE: Why not? Panama and the Bahamas essential use the US dollar
The more interesting question is this -— Why did Iceland prefer to adopt the Loonie and not the world’s de facto “reserve” currency, the US Dollar? (as if we don’t know the answer to that one ).
Why not the obvious? A gold backed currency with gold & siver specie?
siver specie = silver specie
(Canadian money joke)
As our friend from Chicago, Mr. Obama has said, “This used to be us.” /sarc
It’s a noble animal.
It works hard and minds its business.
Much better than the turkey Ben Franklin wanted.
Well heck at this point I might support reverse “Canadian Bacon” because Harper sure would be a better leader than both dopes Obama and Romney!
No...they get a crazy bird, we get an old bat
There's a beaver on the Canadian Nickel... Just in case anyone is interested...
Maybe we can buy Ms Flukes condoms with them...
The Bermuda dollar and the U.S. dollar are interchangable in Bermuda. You can pay in either currency. Why don’t the Icelanders adopt the same policy, make their currency interchangable with the Loony? Call it the Íslandur Dollar?
Hey, what does an American call the Canadian nickel?
The American dollar. :)
Beavers for beavers. Works for me. Can we get an address to send rolls of Canadian nickels to Ms. Fluke.
Translation: “Uh, we’re broke. Let’s go find us a Sugar Daddy.”
And Wayne Gretsky is on the $5 bill.
This is actually a really good idea for Iceland. Their economy is too small to maintain a stable currency. If they can't become another Switzerland, and they can't, this might be the best choice for them.
Maybe the U.S. should adopt a stable currency like the Looney. Of course, in 1994, it was going for something US$0.69 for CDN$1.00.
I know you are jesting. The tail cannot wag the dog.
In 1994 Canadian policies were so abysmal that the Looney really was grossly undervalued. This hurt the Canadians pride so much that they adopted sound economic principles, something that our poor country abandoned in 1932.
Funny how that works. Conservative=strong currency.
A major bank has not failed or been bailed out in Canada since the 1920’s.
What is in it for Canada to do this?
We’re in it for the sardines. :)
As far as I know, if a country wants to formally a foreign currency as their own, the host country can’t really say no. That was the situation in the 90’s when Quebec was voting to separate or not. It could have adopted the Canadian currency as its own and Canada couldn’t have said, “no”.
However, if Iceland does this, it would have no influence over Canada’s currency decisions. It would be just along for the ride only.