Skip to comments.Iceland Forgives Mortgage Debt for the Population.
Posted on 04/14/2012 6:48:29 AM PDT by edcoil
his is awesome. It shows when the people DO STAND UP they have more power and win against the corrupt bankers and politicians of a country. Iceland is forgiving and erasing the mortgage debt of the population. They are putting the bankers and politicians on the "Bench of the Accused." Which means I assume they are putting them on trial for corruption.
(Excerpt) Read more at sherriequestioningall.blogspot.co.uk ...
Free cheese for everyone!
Next, a chicken in every pot?
All liberalism is theft. This sounds like home buyers stealing from home renters.
otoh, it sound a bit like a "jubilee" year, and I guess that the prerogative of leadership.
Two chickens - and a pay increase to a thousand bucks an hour... Why not? It’s not like being a lowlife takes a lot of work...
A dream come true for mortgage holders, with economically lethal consequences.
Iceland has no intention of being rolled.
Iceland says NO to Debt-Slavery
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August 22, 2009
By Notsilvia Night (The Peoples Voice)
Here in Iceland people say, that if the country´s government agrees to give in to British and Dutch blackmail to pay the debts of the private internet-subsidiary Ice-Save of the private bank Landsbanki, we all will become Ice-Slaves. So public opinion is forcing the parliament to refuse unconditional debt-payments. According to a new agreement payments are only to be made conditional as a percentage of economic growth.
Already a large group of international banks have come together to sue Iceland for full and unconditional payments. Joseph Tirado, from the British law-firm Norton Rose said that a large group of banks will be part of this law-suit. He did not want to give the names of those institutions neither would he say in what court the case would be heard. EU officials and others are threatening Iceland with international isolation.
The problem is that every debt is someone else’s asset.
So wiping out all debt would result in a great many of the proponents losing their own assets. Not to mention crashing the entire world’s economic system.
What people really want is to wipe out their own debts while maintaining their own assets which are someone else’s debt.
Ain’t gonna happen.
Anywho, Iceland is a miniscule portion of the world economy. It can do whatever it likes without affecting the rest of us. If the USA were to do something similar, it drastically affects the entire world.
The flip side of this is that no international banking organization will likely do business with them for a long, long time. But considering the fact that no citizen of the country ever understood the complex nature of how they were being manipulated...this makes sense.
Very interesting, I’m not really sure of the long effects of this action.
Here in the United States I would be happy, nay...Delirious if the Property tax was made unconstitutional. As it stands now a property owner really doesn’t own their property. They merely rent it from the Government, because they can take it and sell it out from underneath the owner if those taxes are not paid.
In case you can’t tell, this is a major “thing” with me. Just another form of legalized theft.
I don’t foresee an avalanche of foreign investment rushing into the Icelandic financial markets anytime soon. I wonder if the Icelandic people understand that the money they won’t be paying back didn’t actually come from the bankers
Accounting is funny that way.
So you propose this would be appropriate here?
What about people like myself who lent money in good faith to home buyers with the expectation that I would recieve money back in interest and eventually, the principal?
That money that the bankers lent to the mortgage holders came from people like myself.
Should I just eat it as one of the evil rich?
I worked hard, very hard for that money I saved. A lot harder than most people would ever work in their lifetimes.
We have a very similar issue here in the U.S., but it is manifesting itself differently because this is a much larger country with much different considerations related to our currency. We've pretty much done the same thing in many cases, and the price we're paying for it is reflected in the inflationary indications we see as our currency loses value.
I’m with Opus. “Free Stuff” always has a flip side.
Jubilee has a lot of good features that should be given much more weight in modern times, IMHO.
Hope that Iceland is self sufficient in EVERYTHING. They are going to find out what happens if you lose access to credit for others:
No Letters of Credit for trade
Never again buy food without paying for it in advance
Same with oil imports
If an Icelandic tourist visits NY you better pay cash upfront or have a credit card issued outside the country
No fool would ever start a consumer finance company there. Good luck buying furniture, cars or electronics without credit.
If they do this their GDP will contract so much they won’t know what hit them. Kind of like living an Islamist dream economy from the 7th century . . .
Here in this country you have a bizarre situation where banks who can legitimately foreclose on homes due to unpaid mortgages are refusing to do so in many cases. This is because they know damn well that the mortgages aren’t just “underwater” (i.e., the homes are worth less than the balance on the loan), but that the homes securing the mortgages aren’t even “assets” anymore. In many cases, the cost of foreclosing, taking possession, and then owning the home for an indefinite period of time isn’t even worth the bank’s effort in the long run.
Or for the Libertarians, pot in every chicken. ;)
Read the Chapter in Leviticus that talks about the once-in-a-lifetime Year of Jubilee in which all debts were forgiven in ancient Israel. Bottom line: the Almighty never intended for men to be permanently slaves to the company store.
This story seems to be fake,
You would think such a monumental event like this would be news around the world, but besides Youtube and a few blogs it's nowhere
>> the Almighty never intended for men to be permanently slaves to the company store.
The Almighty never intended for the profligate and lazy to borrow money they can’t or won’t repay, either.
That the “company store” owes men a living and a dwelling is a concept rooted in communism, not that of a God-fearing responsible free man.
Opus-couldn’t agree with you more. Problem is that at a very high level, involving millions of properties whose notes are completely bolluxed up...there may be little practical alternative.
The basis for Federal and State Gov’mt..the supervision of the order required to maintain the integrity of such transactions is being called into question. The very future of government and social fabric is predicated upon enforcement of contract laws in these instances-with the appropriate punitive consequences. Unfortunately, given the magnitude of individual involvement, it would require regional/state tribunals, operating for months/years to achieve.
The default to eliminate mortgage debt may very well happen if the involved bankers and powers that be perceive the nooses from the lampposts starting to swing near their their necks. Bernanke will of course reimburse the big banks under the table
However, it seems likely to me that attempting to maintain the present system without modification is likely to be the worst of all possible economic policies. It is the assumption we can keep kicking the can down the road forever. Which just means that when the inevitable crash comes, it will be even bigger.
I would dearly love to see some non-ideological discussion by economists of the least destructive way to get out of this mess. Haven’t seen any.
Iceland has gone Commie.
Yeah, those “corrupt” bankers who lent $$ to people thinking that they would honor their obligations and pay it back. What a bunch of sleazebags those bankers are! [/s]
Is that the real history of default like this? Some countries have defaulted and some creditors do rush back in. They see a potential creditor with nothing now owed and take the risk that the country won't default again. Sure, the rates might be astronomical, but it doesn't always stop creditors from taking the chance.
I used to work in finance, one of the funny things that would happen to those that declared bankruptcy (went through the filings legally) is that it didn't take long for credit offers to come pouring back in at an astronomical rate. So long as they had a job, some companies actually have a business model around taking that risk.
Obviously declaring everyone's mortgage forgiven is stupid and this is not what is happening, but it is worth noting that default doesn't necessarily mean a lack of credit going forward. The idea that there should be no risk to creditors has been a mistake the Europeans have been making for awhile now. Of course, we know why they are doing it - because their whole house of cards is doomed if reality were allowed to set in (they are all essentially bankrupt), but it is an interesting topic for debate nonetheless.
Yes, but it was already embedded into the society,
and could be corrected for
Who, however, would lend money,
knowing the loan was to be forgiven in one year?
Modern Commerce would grind to a halt,
well in advance of the Jubilee
This sort of thing has happened on a regional or stae level many times before. It’s the scale of it, as well as complicity on behalf of bad actors in the financial sector and regulatory agencies, that have made it a collapse scenario if not dealt with correctly.
Time healed it in Houston due to the oil bust, in Boston and California in the early nineties due to job loss, etc.
Time will make this worse as far as global economic repercussions.
Forgiveness of principal owed above and beyond a fair selling price as determined by comparable recent sales in the vicinty, only upon sale and taxable as income with a restriction to being eligible for such forgiveness only once in a lifetime would free things up more quickly and far more cheaply than has been the case.
The problem today is that the debt crisis is worldwide.
It shows when the people DO STAND UP they have more power and win against the corrupt bankers and politicians of a country. Iceland is forgiving and erasing the mortgage debt of the population. They are putting the bankers and politicians on the "Bench of the Accused." Which means I assume they are putting them on trial for corruption.This should thrill the FINOs in our midst. Shariah Lending for Everyone!
You start at the source, the trigger event, and work outward from there.
Fraud and corruption are the overriding problems. Addressing that takes a level of brutal honesty and willingness to face consequences that has not been in evidence thus far.
You mean the lenders are trying to get the money they loaned paid back? Somebody should occupy such A-holes to the Nth degree.
>Under most circumstances I would agree with you, but in Iceland’s case I believe there’s a much larger issue that relates to state-run banks and national currency considerations. Once it is determined that almost all of a country’s private mortgage debt is held by foreign interests, a lot of those principles go right out the window.
So it is OK to screw over people who lend in good faith if they happen to be foreigners? Brilliant.
That's called "Nationalization."
Geothermal heat for everyone!
Oh wait...never mind.
Good luck. Most economists are tied to the federal government in some way.
I think the solution is classic liberalism. Focus on economic growth. Encourage investment and innovation. Make sure small, growing businesses have a level playing field. In contrast, the corporate welfare program for the largest businesses hasn't worked out so well, has it?
I have to see hw this unfolds. Iceland got hosed big time in ‘08.
Something for nothing is never a good economic policy.
Corporations that “re-organize” under bankruptcy are making a common-sense business decision.
But individuals who, under terms of the signed agreement, stop paying on an “asset” that is worth less than the loan value and relinquish the property are “running away from their obligations”.
Investors who put money into a “sure thing” like mortgage backed securities get upset when the investment goes bad.
Property buyers who put money into a “sure thing” like owning a home get upset when the investment goes bad.
Get the government completely out of the housing market, NO Fannie, No Freddie, NO government guarantee with the exception of opportunities for UNIFORMED military (we owe them anything we can do).
Stop all the whining. If you want to put your money into PRIVATE mortgages, go ahead. But don’t bitch when someone decides to choose “option B” and give the asset back.
If you choose to invest in a home, don’t ask me to bail you out when your “investment” turns upside down.
Individual responsibility, PRIVATE property rights and liability laws provide for remedies to all this nonsense.
Agreed. This doesn’t pass the sniff test.
“EU officials and others are threatening Iceland with international isolation.”
I envy Iceland.
his story seems to be fake,
You would think such a monumental event like this would be news around the world, but besides Youtube and a few blogs it’s nowhere
Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the countrys economic and financial collapse are reaping the benefits of their anger.
Since the end of 2008, the islands banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.
You could safely say that Iceland holds the world record in household debt relief, said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.
The islands steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Icelands economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates. It costs about the same to insure against an Icelandic default as it does to guard against a credit event in Belgium. Most polls now show Icelanders dont want to join the European Union, where the debt crisis is in its third year.
The islands households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses.
LETS SEE OBAMA DO THAT!........no wait.....
Read the comments at the original story. I didn’t think that people could be that stupid.