An Indian Civilizational Perspective

Iceland's troubles continue

Iceland’s troubles are not ending anytime soon!

On one side its banks are in major trouble. Kaupthing Bank, Iceland’s largest lender has been taken over by the Government. many European investors, specially the Brits had invested in it. Now they are in massive red. So what does Britain do? The Brit Government has invoked antiterrorism laws in an effort to get the money.

Iceland is also looking now at getting the help of IMF. Its currency is history now.

“Iceland is bankrupt,” said Arsaell Valfells, a professor at the University of Iceland. “The Icelandic krona is history. The only sensible option is for the I.M.F. to come and rescue us.”

The value of Krona is falling like crazy.. because the market does not see any more value in it now:

Bloomberg News cited traders at Nordea Bank as saying the last quoted value of the krona had been 340 to the euro — less than half what the Icelandic currency was worth at the start of the week.

There are many other countries which might be on the brink of going bust. One of the candidates which I think is a scary thought given its very dangerous ramifications – is Pakistan.

Pakistan has been at the brink of bankruptcy twice (or more). Once it used the aid from the US during the Soviet Afghan war and after that was gone, they used the sale of Nuke/Nuke technology to shore up the national revenues. Last 8 years has seen $10 bn coming from the US, but there is now evidence that it may be drying up. The Finance Minister is running around the world trying to get some money…. but things on the credit are getting tough. Meanwhile the Taliban and Al Qaeda are after Pakistan’s life. The future is very dim for that country and its neighbors.

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