Financial Crisis

As most people know there are huge financial crisis going on in the world as I write this. Even though I focused on economy during secondary school I have absolutely no idea how so many people can lose that much money in such a short time, regardless of their place of residence on this little thing called planet earth. I guess we will see thousands of books written about what is happening these days, but fortunately I won´t read any of them.

Anyways, I am from Iceland, which is a relatively small island with only 320.000 people (considering Iceland is geographically bigger than England it is maybe not so small, but that is another story)

Here is the thing. About ten years ago, the three biggest banks in the country (owned by the government) were denationalized. All the banks suddenly grew enormously fast and the owners became billionaires in a short time etc.

Two months ago, all of the banks were nationalized. The one thing that sparked it all was that the Federal Reserve of Iceland denied one of the banks of a loan of 500million Euros, which is a decent amount of money in a country with only $12.274 billion in GDP.

Well, I´ve got news for you, business is about trust and credibility, especially the bank system which seems now to be based on loans and debts of the world´s population. Because the Federal Reserve wouldn´t loan the bank this amount (and rightly so - otherwise I would be a slave for the rest of my life), the bank system collapsed in a week. All of the banks creditors shut them off and the rest is history. That means that all the stocks become worthless resulting in tens of thousands of people losing their life savings (because they had been tricked to invest in stocks so the banks could expand more and sink into more debts).

Of course most people had no idea about the banks financial status until everything was gone, and so it appeared that those three banks had foreign debts that paralleled three times the GDP of the country, which is of course aboslutely crazy.

Now I am slowly getting to my main point. One of those banks (Landsbankinn) did business in the UK, and the total amount on the savings accounts only, owned by people in the UK, was $500millions. That is a pretty high number given the fact you owe it to somebody, and you have no money.

There were a lot of things that went on between the British and the Icelandic government and to put a long story into few words Gordon Brown, GBR´s Prime Minister, enforced terrorist law over my country which had of course serious consequences. A couple of weeks later he revoked the law and apoligized but still he´s not welcome because of the harm he did.

The bottom line is that my currency dropped by 50% in one month, the unemployment rate will increase by 5% in the next two months, and billions of dollars went down the sink.

I just wanted to post this because I think the whole situation is a good example of "how not to run business" and is also a good example of incredibly unethical business methods.

P.S. I didn´t check for grammar errors because it´s late and I also don´t want to read this because it´s too depressing.