BBC discuss Iceland (Iceland refused a baleout,got KILLED & is now growing again)

[Mega]

http://news.bbc.co.uk/1/hi/programme...nt/9550667.stm

Hmmmmmm.....Are we seeing the ground being ready-ed for a UK default?
Mike

[Starving Steve]

Re: BBC discuss Iceland (Iceland refused a baleout,got KILLED & is now growing again)

The United States has NEVER officially de-valued its dollar against any world currency--- except for gold. Even the designs and sizes of U.S. coins and currency are, more or less, the same as they have always been with some, the cent for example, dating back more than a century.

Canada also follows this strategy, with some of its coin designs dating back to 1937, and some of its coin sizes and coin denominations dating back to Confederation in 1867. Although Canada has sometimes officially de-valued its dollar against the U.S. dollar, its dollar has appreciated in recent years to $1.05 U.S. So the basic dollar policy with Canada's beaver buck is to stay close to the value of a U.S. dollar, especially over the long-run.

Bank deposits in the U.S. and Canada are insured by federal deposit insurance. No saver under very large insured deposit limits ($250,000 in the U.S and a similar large amount in Canada) is left "to take a haircut" in case of the bankruptcy or default of any financial institution.

Just reading here in Mega's post about what has happened in recent months in Iceland, I am rather shocked. This is not how the game is played in North America, at least not overtly. No-one in insured accounts is ever "thrown under the bus", and the currencies are always stable and sound, relative to other major world currencies--- except for gold.

If the Bank of Iceland's monetary policy in recent months is a model for the world to follow, we are in major trouble, indeed. These cavalier monetary policies carry with them a moral hazard, i.e, that these policies might be repeated in future. These policies carry with them an inflation shock when they are implemented. And these policies encourage a flight of capital to other nations where capital is treated better.