Monday, December 21, 2009

EU, IMF Revolt: Iceland and Latvia May Lead the Way

Ellen Hodgson Brown, J.D.

December 7, 2009

Total financial collapse, once a problem only for developing countries, has now come to Europe. The International Monetary Fund is imposing its “austerity measures” on Iceland and Eastern Europe, with Latvia the hardest hit of the “Baltic Tigers.” But these are not your ordinary third world debtor supplicants. Historically, the Vikings of Iceland repeatedly repulsed British invaders; and Latvian tribes repulsed even the Vikings. If anyone can stand up to the IMF, these stalwart northern warriors can; and today they might even find an ally in each other.

Dozens of countries have defaulted on their debts in recent decades, the most recent being Dubai, which declared a debt moratorium on November 26, 2009. If the once lavishly-rich Arab emirate can default, more desperate countries can; and when the alternative is to destroy the local economy, it is hard to argue that they shouldn’t. That is particularly true when the legal grounds for imposing the creditors’ claims on the government are highly questionable. Both Iceland and Latvia have been saddled with responsibility for private obligations to which they were not parties. Economist Michael Hudson writes:

“The European Union and International Monetary Fund have told them to replace private debts with public obligations, and to pay by raising taxes, slashing public spending and obliging citizens to deplete their savings. Resentment is growing not only toward those who ran up these debts . . . but also toward the neoliberal foreign advisors and creditors who pressured these governments to sell off the banks and public infrastructure to insiders.”

Eva Joly, a Norwegian-French magistrate hired to investigate the Icelandic bank collapse, calls it blackmail. As a condition for receiving IMF loans and membership in the European Union, Iceland is being required to endorse an agreement in which it would reimburse Dutch and British depositors who lost money in the collapse of IceSave, an offshore division of Iceland’s leading private bank. But these are not debts the government is legally bound to assume; and Joly warns that succumbing to the EU’s demands will drain Iceland of its resources and its people, who are being forced to emigrate to find work.

Iceland’s economy contracted by 7.2% during the third quarter, the biggest fall on record. Latvia forecasts a 17.5% decline in the economy this year, with major cutbacks in public spending. As in other countries squeezed by neo-liberal tourniquets on productivity, employment and output are being crippled, bringing these economies to their knees.

The cynical view is that that may have been the intent. Instead of helping post-Soviet nations develop self-reliant economies, writes Marshall Auerback, “the West has viewed them as economic oysters to be broken up to indebt them in order to extract interest charges and capital gains, leaving them empty shells.”

But Iceland and Latvia could call the bluff of the IMF and EU, following the lead of Argentina in 2001. In the face of dire predictions that the economy would collapse without foreign credit, in 2001 it defied its creditors and simply walked away from its debts. By the fall of 2004, three years after a record default on a debt of more than $100 billion, the country was well on the road to recovery; and it achieved this feat without foreign help. The economy grew by 8 percent for 2 consecutive years. Exports increased, the currency was stable, investors were returning, and unemployment had eased. “This is a remarkable historical event, one that challenges 25 years of failed policies,” said economist Mark Weisbrot in a 2004 interview quoted in The New York Times. “While other countries are just limping along, Argentina is experiencing very healthy growth with no sign that it is unsustainable, and they’ve done it without having to make any concessions to get foreign capital inflows.”

To find the money for its remarkable development, Argentina did not need foreign investors. It issued its own money and credit through its own central bank. Earlier, when the national currency collapsed completely in 1995 and again after 2000, Argentine local governments issued local bonds that traded as currency. Provinces paid their employees with paper receipts called “Debt-Cancelling Bonds” that were in currency units equivalent to the Argentine Peso. The bonds canceled the provinces’ debts to their employees and could be spent in the community. The provinces had actually “monetized” their debts, turning their bonds into legal tender.

Issuing and lending currency is the sovereign right of governments, and it is a right that Iceland and Latvia will lose if they join the EU, which forbids member nations to borrow from their own central banks. Latvia and Iceland both have natural resources that could be developed if they had the credit to do it; and with sovereign control over their local currencies, they could get that credit simply by creating it on the books of their own publicly-owned banks.

In fact, there is nothing extraordinary in that proposal. All private banks get the credit they lend simply by creating it on their books. Contrary to popular belief, banks do not lend their own money or their depositors’ money. As the U.S. Federal Reserve attests, banks lend new money, created by double-entry bookkeeping as a deposit of the borrower on one side of the bank’s books and as an asset of the bank on the other.

Besides thawing frozen credit pipes, credit created by governments has the advantage that it can be issued interest-free. Eliminating the cost of interest can cut production costs dramatically. For a discussion of some new technologies that could make even small countries self-sufficient, see David Blume, Alcohol Can Be a Gas.

For the full text of this article, see

Ellen Brown is a California attorney and the author of eleven books, including “Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free,” available in English, Swedish and German. Her websites are and

Tuesday, October 20, 2009

We have a choice

A speech by Birgitta Jonsdottir, October 5th 2009 in the Icelandic Parliament
translation: Kári Þór Samúelsson

Madam President. Dear countrymen. We have a choice to make. We are never faced with just one way, one solution. To assert so is a testimony to incredible tunnel vision on the reality that we live in. We are far from being the first and only nation that has had to deal with crisis and economic collapse. Perhaps what makes our position unique is that we are in an economic war – a war with nations that are using their positions of power to get what they want. Does that mean that all other avenues are closed? Are there perhaps other possibilities than chaining us with the burdens of foreign debt far into the future?

It certainly makes sense to lower our interest payments as soon as possible but is there perhaps another way? Why can’t we look at, or at least discuss, the possible solution of declaring a debt moratorium? The numbers I hear on the national debt is so huge and such a high percentage of our GDP, that according to all the standards we use we are technically bankrupt. Is it maybe better to face reality before it is too late? Is it maybe better for our nation to take the crunch immediately instead of continuously adding to our foreign debt? Do we want to offer our children the hopeless conditions that many underdeveloped countries have had to offer their future generations? Do we want to be just another country that does not do anything other than pay off interest on foreign debts? What is the worst thing that could happen if we declare debt moratorium? Will the sky fall? Will we starve? Will we never again be able to get loans from the international community? Of course not.

We have heard from many experts that horrendous tales of the International Monetary Fund. They warn us against continuing on the road we are on. Do these fine individuals know what they are talking about? One of them is a Nobel Prize winner in economics and worked for the IMF a long time, the other was an economic hit man and yet another one is a world renowned economist. Some experts have proposed that we join other nations that have defied the IMF, or at least seek advise from nations that have fared badly under IMF conditions. Will we be able to preserve economic independence, if we continue to believe that the only possible solution to the debt problem is to create more debt? People who are dealing with excessive consumption of some sort should probably not use this cure since the solution seems to be to consume more to cure the over consumption. I simply don’t understand this methodology.

Unfortunately, the reality is that if we continue on the way the government is going our nation will be crushed under the interest burdens of foreign debt. Payment of foreign debt will take a big chunk of our economic growth and our GDP. The government proposes two ways out of this problem, slashing our welfare state and increasing taxes. Furthermore, we have not seen any reasonable proposal to correct the injustice that the public has suffered. How can you expect to nation to shoulder such burdens as the proposed cuts and tax increase suggests if you can not trust that the hardship will have positive results in the end? It simply can not be expected.

We now need to make decisions based on hope, justice, and the resurrection of pride which comes from living in a country which many people believe is almost uninhabitable. We can and should seek all possible ways to find common solutions. Britain declared war on our nation when they labeled us as terrorists – the British authorities have used economic terrorism against us by misusing the IMF, and using our EU membership application as leverage in order to extort from us what they want in the Icesave debate. It is morally wrong to lay debts on the shoulders of the public which it had nothing to do with in the first place.

Our government doesn’t seem to realize that we are indeed in an economic war and that the nation has been attacked in such a way which makes a courteous response impossible, and it being impossible as well to state without blinking that we should pay the debts of financiers that mortgaged the work of the nation undisturbed while the administration slept.

The demands of Britain and Holland regarding Icesave have to be rejected on the basis of national well being and security. If the government tries to honor the Icesave agreement and follow the IMF program it could lead to mass emigration, damage our healthcare and education system, diminish the workforce, inhibit productive investments and usher in a period of permanent national decline.

I object when our leaders claim that we the people are obliged to pay debts we never incurred. On what basis should every man, woman and child be forced to pay €20,000 each? I have heard that we have to pay the British and the Dutch because they are using their strong position to stop our loan from the IMF. I have heard that their MPs were ruthless and rude to our visiting MPs last week in the European Parliament, and had said more than once that if we didn’t pay we could not join the European Union. I don’t know about you, respected government and prime minister, but I think the time has come to get out of this bind and seek alternative solutions.

The Movement supports the following ideas for action to bring us out of the economic calamity we are in:

First, we should rid ourselves of the IMF presence in our country using all available means. The European Union has also been hostile to Iceland in the Icesave debate and hence it would be inadvisable to continue with our membership application at this time.

Secondly, we should initiate measures to control speculative trading, first by placing a 1% "Tobin-tax" on all financial transactions and profits, including derivatives, stocks, currency transactions and commodity speculation. Additionally we should halt the repossession of homes and businesses and update our regulatory framework for banks and financial markets.

We are now heading into familiar territory where left and right are positioning themselves in the usual opposing trenches. Lament is now heard from a familiar corner about how the cutbacks aren’t large enough or that its unfair to tax those more who can afford to pay more.

We have often heard that we need to get around this left-right paradigm which places people in opposing camps. It has never been more important than right now to lift the discussion on a higher plane than the trench warfare of obsolete values.

When I see the task of this government I see a number of important issues on the agenda and I pledge our support to many of the legislations being proposed. Much has been discussed about a broad based national coalition government and a non-parliamentary government . Such arrangements have not fared well in the past, but the total collapse of our financial system may justify that all elected representatives shoulder collective responsibility of resuscitating our economy. Unfortunately our president has lost his symbol of unity and any such government appointed by him would leave much to be desired.

This year me and my friends in the movement have have thought about what could unite us to seek a way out of our troubles. What could make us believe that it was sensible to try working our way out of these trying times and injustice. Is it realistic to expect that the public take on the difficult times ahead if they can not unite on something to work through this? It is often said that we parliamentarians are a disparate group of people reflecting the different views of society. Maybe our next big task should be to find a common way which we all can go. Maybe we need to think beyond the next four years. Maybe we need to really discuss what kind of nation we want to be. Many people walk wounded from the boom time in which they took part, they got swept by the current and now feel guilty. Others never took part in any of this and feel its unfair that now they are called on to pay for this whole mess when they never were rich in the first place. The pulse of the nation is rapid and raging.

The new Iceland isn’t the Iceland that the people called for. They wanted democratic reforms, but legislation now being proposed in this area is weak and not in tune with the peoples demands. The nation needs a constitutional convention in which citizens take part but the expensive advisory convention for a chosen few which the government proposes is a distortion of the unity such a convention could bring if a different metheod were used. In November a few energetic individuals will call together a national convention and it is my hope this endeavor will guide us on this path.

We parliamentarians are here to represent the will of the people. But the people have to make up their minds as to what it is that they want. It is clear that no matter which government will be in charge, they will always be unpopular in the trying times ahead If we are not to have a persistent government crisis it is important that Parliament take back the powers it was originally intended to have. At the moment the executive branch holds Parliament hostage. It is healthy for democracy that the executive branch refrain from using its MPs as a rubber stamp for their decisions. The government has set an example for all and called for the parliamentary minority to work according to their conviction, cf. European Union application - it must apply to the majority as well. Heard mentality and leader adulation brought us down. Lets make sure it doesn’t happen again. The Movement wants to speak for the public, we have no interests to guard but your own.

Halldór Laxness had a unique insight into our nation’s soul. Maystar, his poems of hope, sings in my heart when I think to my nation these days, and in particular this verse:

There are difficult times,
there is a labor dispute,
I have nothing to offer,
not a scrap I can give,
but my hope and my life
whether awake or asleep,
this hope that you gave me
it is all that I have.

There are difficult times and a hard winter lies ahead, but let us never forget that the darkest hour is always before dawn and there is hope if we find it together. In order for this to happen we must square up with the past and implement real changes. If we can see a purpose with our sacrifices this nation can continue to perform small miracles and make the impossible possible, then this depression will perhaps not last as long as it seems at the moment. It is unrealistic to argue that next year we will see the end of the crisis. But it is realistic to set goals that we can all agree on. What these goals are is yours to decide and ours to implement.

Thursday, October 08, 2009


By Webster G. Tarpley

Reykjavik, Iceland, Oct. 7 – A leading member of the Icelandic parliament called Monday night for the country to declare a debt moratorium and stop attempting to pay the $6 billion which the British and Netherlands governments are seeking to extort from Iceland with the help of the International Monetary Fund and the European Commission in Brussels. This dramatic call was issued by Birgitta Jónsdóttir, the chairman of the parliamentary faction of The Movement in the Icelandic parliament, the Althing. Birgitta Jónsdóttir was speaking during a special session of the Althing called to address the rapidly deteriorating economic and financial position of Iceland, one year after the collapse of the three hot-money offshore banks, Landsbanki, Kaupthing, and Glitnir.

In her remarks, Birgitta Jónsdóttir observed that Iceland is already technically bankrupt, and ought to cease payment. She also pointed to the hostility to Iceland of the IMF and EU. The current prime minister, Jóhanna Sigurðardóttir, who leads a moribund coalition of Social Democrats and Left Greens, had attempted to justify her policy of financial appeasement of the British and Dutch. London and The Hague are demanding $6 billion in restitution for losses incurred by private Icelandic bankers operating in their countries as Icesave, even though the Icelandic government had never guaranteed these operations, and even though British and Dutch regulators were deeply implicated in the Icesave debacle, which came in the wake of the Lehman Brothers bankruptcy. The sum demanded by the British and the Dutch from Iceland in an operation spearheaded by the widely hated UK Prime Minister Gordon Brown would amount to about half of the yearly Gross Domestic Product of Iceland, a country with about 330,000 inhabitants. If the Anglo-Dutch were attempting to perform a proprortional extortion on the United States, they would be demanding about $8 trillion . The British and Dutch are also determined to collect at least 5.5% compound interest, meaning that Iceland’s obligation would grow over time, even if substantial payments were made. If the politically desperate Brown and his Dutch retainer Balkenende get their way, Icesave will turn into Iceslave – a future of poverty, unemployment, depopulation, and national collapse for Iceland, which could never pay the sums being demanded.

In a related development, Icelandic Health Minister Ogmundur Jonasson, a highly respected leader of the Left Green Party, resigned from the coalition government in protest against the economic policies being pursued. Specifically, Ogmundur Jonasson stated in interviews that he could not in conscience support the Icesave sellout, as the prime minister was demanding. Ogmundur Jonasson is widely regarded as a possible candidate for prime minister. His resignation is considered the de facto start of a government crisis likely to lead to the fall of the current coalition, perhaps as early as mid-October.

Birgitta Jónsdóttir’s The Movement faction is the product of a mass strike upsurge which gripped Iceland from October 2008 to January 2009, with frequent large-scale demonstrations against the previous right-wing coalition government, which had imposed the monetarist de-regulation of the Icelandic banking system, leading to the banking crisis of last autumn. Birgitta Jónsdóttir and her associates were originally elected as part of a larger group called the Civic Movement, from which they split when the Civic Movement took a course of opportunism.

Birgitta Jónsdóttir has now placed the question of a debt moratorium squarely on the international agenda. Her courageous move shows that small countries can move world history by providing leadership for humanity in times of crisis when existing institutions are increasingly paralyzed and corrupt. In recent months, political forces in the Philippines and Sri Lanka had raised the question of debt moratoria, as had the leaders of UNCTAD. With the news coming from Iceland, the formation of an international debtors’ cartel to confront London, Wall Street, and the IMF has suddenly become a real possibility.

Wednesday, October 07, 2009

The world needs an honest money system

I got this article sent and I find it carries important message...

"I am Canadian and a great friend of your beautiful country. I have visited the island 5 times and even read Egill's Saga without having nightmares :-)

I am a retire Director of an Investment Bank. Like approximately 98% of people who work in banking (and 99.9% of the general population) I never truly understood how money is created, the act of bringing it into existence, and certainly did not understand the confusing issues of Fractional Reserve Lending, but since retirement 9 years ago I decided to find out this mystery. I highly recommend this field of study to all, for our ignorance of this money scam is quickly enslaving the world.

The purpose of this post, entitled, 'Mortgage Striker Support', is to offer my highest praise and encouragement to any and all of you who are participating in this activity. You are indeed the true patriots of Iceland, and I assure you, Egill would be proud of all of you indeed!

What I learned about money creation is that it is a total scam; this fiat, debt-based, coloured paper that is backed by nothing other than the global banker elites who are taking over the world. Ultimately, real money is a call on our labour and for it to be honest it must be born out of labour and have real value within the economy, which is why gold and silver are still money today.

The banksters will say otherwise and have a great list of reasons why gold and silver can never again be used as currency, but the bottom-line reason is they can not steal value from it, and that is their mission in life - taking the value of our labour, seizing the assets, country by country, until they become the undisputed global rulers.

I know very well how proud and reputable Icelanders are as a people. If I lent you $100 or 100 euros, almost every one of your countrymen would honour and repay that debt. That moral value is deeply inbred from years of respecting each others promises - "a promise made is a debt unpaid" type of thinking. This is because you know very well the labour that is required to "earn a living", you know how hard life can be.

But what if the money I lent you was magic money - money that I created out of toilet paper; money that the value kept disappearing from, so that you could never earn enough to repay me and rather had to always return to borrow more and more and get ever-deeper into debt? How would you feel about that? Would you still feel obligated or would you feel betrayed and deceived? I think that Egill, when he would learn of such a trick, would have grabbed his broad axe and chopped off my head, and rightly so.

You see the current money system is funny money - magic money where the value always disappears. This is called inflation that so few people really understand. We believe we need banks because we think they have money to lend us - they do not. They only have the ability to create money out of thin air, and it is always given as debt where we have to pay interest or years of hard labour to try and catch up to the amount that the banksters created out of thin air in the first place, and we have to always run faster and faster on the work treadmill as the value of the money always disappears into the bankster's pockets, as the costs and expenses of living keep increasing.

It is truly a scam, a world wide scam and all countries, not just Iceland, need an honest money system. The only way it can be honest is if the banks are taken out of existence. We don't need them, and by keeping them, we perpetuate the slave system they have created.

How do we get rid of them? We stop playing their game. We stop paying the debt. We refuse to give our labour to pay back magic money, and this is what the Icelandic mortgage strike can accomplish. To all of you doing this, I say, Bravo!! You are the true patriots of Iceland and it is likely up to you whether Iceland returns into the hands of the people, or gets handed over to the banksters, and you become serfs and slaves in the country that Egill loved.

I salute your efforts and want you to know there are many, many people in the world who are on your side and right now, sending you love and support.

Tom Jefferson"

Tuesday, June 09, 2009

Joy B is now a MP

Dear friends and readers - I have not had time to write into space for some time - the adventures have simply been beyond amazing ...
Here is a link to a great interview conducted by Alda the spinner of the Iceland Weather Report - a must read for those who like to follow happenings and events from the island of extremes...

In Iceland things are never called by their proper names

by alda on May 28, 2009

In our latest in a series of interviews we talk to Birgitta Jónsdóttir, poet, activist, and newly-elected MP and party group chairman for the Civic Movement – the political force that grew out of the protests here in Iceland last fall and winter. It was founded a mere nine weeks before the elections and ran its campaign on a shoestring, yet managed to secure eight percent of the vote and four seats in parliament. Among other things Birgitta has been very frank about her views on the inside workings of Althingi, Iceland’s most venerated institution, which she expresses unabashedly on her blog. Birgitta is a single mom who was unemployed before being elected to Althingi.

Want to read more: follow the bread crumbs


Thursday, February 26, 2009

Hit and run party in Iceland

Dear friends
I have been silent for almost a month - reason for it simple - I have been working day and night with various grass roots movements to find solutions to the crises we are facing as a nation. We had a revolution - we got a new government for 80 days and we will have elections 25th of April - however we are still falling deeper into a hole that the IMF is digging for us. I fear that there is a real danger that we will loose our natural resources if we follow the IMF plan. I have done some researching on the history of IMF and it is not a very happy trail. It is a program based on pure capitalism and it will destroy our social structure if we follow it.

I have with others organized protest - information nights - open meetings between the public and the political leaders - we have managed to make an umbrella org for many of the grass roots groups so we can pool our resources together and make a heavier dent into the dead end we call neo capitalism that has been blossoming here and greed and corruption. We have now formed a hit and run party - its only aim is to get through democratic reforms on our constitution and the electoral legislation. Once we have followed through our mission we will cease to exist as a party.

I was elected as the vice president for this hit and run party and since we only got until April 25th to make this choice seen and heard I will not be writing much here on this blog - and i will not have much time to write letters:) not that i have been doing much of that in the last half a year:) please forgive me those waiting for replies ...

I leave you with a little film i put together about the financial crises in Iceland and will be shown on TVset a tv station in the USA on February 28th...

Tuesday, January 20, 2009

Icelandic parliament under siege

Right now the Icelandic parliament is under siege from the general public. The only weapons we have are our voice - and they are shouting. The only weapons we have is information - and they are shouting. The only weapons we have are noise and we are making them hear us. The only weapons we have are our fists and we are raising them.

The Icelandic parliament is under siege and they are using maze and batons against us. They are a the soft shield between the corrupt mafia who has taken our country and destroyed the future of the next generations.

I hope the noise will make them feel in their soul how they have made the nation bleed. I hope they will realize we want them to resign - we want them to leave forever and ever. We want a new constitution for the people of Iceland not to serve the mafia.

We will not leave until they will leave - we will make you hear our voice - to hear our howl for freedom until you leave...

Friday, January 02, 2009


When I am being love
my heart becomes huge,
inside, outside,
the walls I call body
I energize myself
not like a machine
more like a plant
Stretching my leaves
towards the light
When night falls
I don't sleep
I withdraw,
go inside,
close my blossom,
to the outside world
So I can let the light
illuminate my inside
I draw life from earth,
the mother
It's a more subtle kind of life
My grounding is my breath
The deep womb of intuition
I open to the father
The source for imagination
The bringer of light
The spinner of wheels
All is linked together within,
–Unbreakable threads

I am with the creation

Video from the protest in Iceland 31.12.08

Like in all mafia countries - the media is owned by the mob - the police is owned by the mob and of course they lie through their teeth when it comes to reporting what really happened at the protest.