Peter Guestyn, 60, presented bank staff with “silver certificates” which he claimed were worth a million dollars each.
Posts Tagged ‘Currency’
Businessman tried to con banks into cashing $1bn in fake US currency
Thursday, May 13th, 2010The Finance Minister Who Doesn’t Get It
Tuesday, March 9th, 2010“I think what is happening in Iceland proves that our own currency is very beneficial to our needs. You don’t have to go far back to see that the currency developments have increased the competitiveness of Icelandic businesses and industries”.
- Steingrimur J. Sigfusson, Finance Minister of Iceland two years after an economic collapse all but wiped out the Icelandic financial sector after years of “hot money” flowing into the country because of exorbitant interest rates imposed to battle inflation.
He is crediting the arsonist for bringing a bucket of water to the fire.
What he is really celebrating is Iceland moving one step closer to the developing world and improving our “competitiveness” through a worthless currency. Never mind the comparative loss of wealth to citizens in the developed world.
A classic argument for not joining the EU and improving the livelyhood of Iceland’s citizens.
Related posts:
Alleged Currency Fraud Investigated in Iceland
Monday, February 1st, 2010
House searches of companies and four homes were undertaken on Friday by around 30 employees of the economic crime department of the National Commissioner of the Icelandic Police, the Central Bank of Iceland, the Icelandic Financial Supervisory Authority and other institutions due to suspicion of currency fraud.
Iceland consultant: No Faith in Small Currencies
Monday, December 28th, 2009
Mats Josefsson, a Swedish economics advisor to the government in restoring the financial system, says he cannot see how Iceland can maintain its currency, the ISK, in the future, visir.is reports.
Weak Icelandic krona benefiting tourists
Monday, December 7th, 2009
Service takings from foreign tourists in Iceland have shot up over the last year, with each visitor now spending an average of 50 percent more than before.
The last quarter of 2008 and the first three quarters of 2009 saw spending by foreign visitors to Iceland increase considerably when counted in Icelandic kronur.
The figures were reported in Islandsbanki’s morning briefing, saying that it is clear tourists are enjoying the low rate of the Iceandic currency and the increased purchasing power that brings. From this point of view, the Icelandic tourist industry and other services are benefiting from the weakened exchange rate.
The average tourist visiting Iceland is now spending around ISK 170,000 (USD 1,400) during their trip.
Bad Economics
Wednesday, November 18th, 2009Fridrik Jonsson shows two pictures on his blog today that challenge the wisdom of applying economic theories to large economies and small as if there were no difference.
The first one shows inflation from January 2001 – October 2009.
The second one shows the development of CB interest rates in the same period. Notice a trend?
Those of us who have been paying off loans in the last 8 years or so have always experienced a negative effect when the Central Bank has hiked up its rates.
The problem is a volatile currency in an open and very small economy. The outcome is going to be a lot of hot money flowing into the country and disappearing the same way if rates are lowered. Add the factor of consumer price indexation and you have a vicious circle where the rise in monthly payments for a business means a higher price for the consumer and workers constantly needing more wage hikes. All adding up to a situation where inflation keeps biting you in the arse.
Disastrously failed economic management anyone? Unfortunately, the people now in charge might not have learned anything. Or worse, maybe they are just locked in because of the failed ISK.
Thanks A Bucket – But Stiglitz Wants IMF Out Of Iceland
Wednesday, October 14th, 2009Although I appreciate the brilliant contribution Joseph Stiglitz has made to economics, I still find it cringeworthy whenever I hear someone thank the flexible Icelandic currency for things “being better than they could have been”.
It is sort of like thanking the arsonist for bringing a bucket of water to the fire he started himself.
Stiglitz, speaking in Copenhagen is still vary of the IMF’s involvement in Iceland. Its plans are likely to lead to increased unemployment. “The fund’s fuse is short, which means that if states don’t do what it proposes, then it will delay its actions. It is a negative signal and that is why many are now considering whether Icelanders should thank the IMF for stepping in one year ago and tell it that there is a balance in the system, there is no emergency situation and as a democratic state we need the citizens to get together and discuss further action. There are many things at stake but full employment is the most important.”
Stiglitz says that the huge budget cuts demanded by the IMF would lead to higher unemployment in Iceland. “They say that the cost of obtaining trust is to have large reserves, the cost of the reserves are high interest rates. The cost is equivalent to the budget cuts in health or education and Icelanders should ask themselves whether it is worth it.”
Iceland’s Central Bank Leaves Main Interest Rate at 12% to Support Krona
Saturday, September 26th, 2009Icelanda s central bank left the benchmark interest rate unchanged as policy makers try to support the currency before capital restrictions are scaled back later this year.
Iceland to ease capital controls in stages
Thursday, August 6th, 2009
The Central Bank of Iceland announced yesterday that the country’s harsh capital controls will be gradually lifted beginning in November, ending the current ‘managed float’ of the fragile Icelandic krona.
It is estimated that there are some USD 5 billion of foreign investments stuck in Iceland, half of which is held by so-called impatient investors, enthusiastic to remove their funds from the country as soon as possible.
If the controls were to be lifted in one, the krona would collapse to an unsustainably low level practically overnight.
Franek Rozvadowski, the IMF representative in Iceland, said the CBI’s plan can only work if carried out carefully and with a suitable foreign-reserves-buffer in place. He said in an interview with Reuters yesterday that such a buffer will be in place provided the IMF decides to pay out the overdue second tranche of its USD 2.1 billion loan to Iceland soon.
Meanwhile, Central Bank governor Svein Harald Oygard said that the small size of Iceland’s economy makes monitoring and regulating the outflow of capital relatively easy – a fact he hopes will enable the Bank to fully lift the restrictions without serious depreciation of the krona.
There is no official confirmation of how long the process will take and it is believed the plan is divided into stages which will happen only when the economy and currency are deemed ready. Iceland’s parliament has already approved the CBI plan.
Iceland Prepares to Join EU Amid Economic Instability
Saturday, July 18th, 2009After several days of fierce discussion, Iceland’s parliament has decided to apply to the European Union – a decision largely motivated by the nation’s economic troubles and frail currency.
Can Iceland Be Saved?
Monday, July 6th, 2009Statistics paint the remarkable fiscal challenge Iceland’s people face. The central bank estimates that about 40,000 of the country’s 100,000 households took out loans to buy automobiles denominated in foreign currencies, chiefly the Japanese yen and Swiss franc. Similarly, about 80,000 Icelandic households have mortgages—all of them with payments either directly linked to inflation or, like those car loans, denominated in foreign currencies. When the krona was soaring, taking out forex loans for new Land Cruisers and condos overlooking the harbor might have seemed rational.
From about 2002, the soaring currency—buoyed by artificially high official interest rates—allowed hot money to flow over Iceland like the Gulf Stream that keeps the country temperate. Everyone from American hedge fund managers to Austrian dentists found it easy to borrow cheaply at home, or in low-rate currencies like the yen, and buy higher-yielding Icelandic securities.
Tourists being ripped off for ISK at London airports
Sunday, June 28th, 2009
After a period during which Icelandic kronur were virtually unavailable outside of Iceland, travellers are once again able to buy the currency before arrival. But some airport bureaux de change are taking their usual business model a step further.
Airport exchange desks are not known for their great value for money, but the Icelandic krona is offering unusually fertile ground right now. IceNews sources in London report sales rates of one pound to 186 kronur while it will cost 245 kronur in order to purchase one pound on the way back into the UK. That’s a 25 percent difference.
Meanwhile, a pound will currently buy 210 kronur at Landsbanki in Iceland and tourists leaving the country can buy a pound for 212 kronur. The difference there is just half of one percent and both buying and selling are considerably better value in Iceland.
If you are planning to visit Iceland this summer – beware!
British Post Office: Iceland cheapest holiday destination
Monday, June 22nd, 2009
Iceland is the best value country for British travellers, according to a new report from the British Post Office. The company based its decision on the fact that the Icelandic currency; along with the Jamaican, Hungarian and Polish currencies; has lost ground against the pound while most others are becoming more expensive.
Visir.is reports the Post Office as saying:
“Adventure thirsty travellers can use the 24-hour daylight if they travel to Iceland this summer. The local currency is 40 percent better value this year than last. With the collapse of the krona, the Land of the Midnight Sun has taken top spot on the Post Office Travel Services’ cheap destinations list.”
A Post Office spokesman encouraged people to visit the four countries – but especially Iceland, which has always been so expensive before.
Iceland an attractive prospect
Thursday, April 23rd, 2009Attractive prospect … Iceland has become much cheaper for tourists. Photo: Holger Leue/Lonely Planet April 23, 2009 – 5:18PM With Iceland’s economic meltdown sending its currency into freefall, tourists who saw this remote North Atlantic island as prohibitively expensive are now flocking to its dramatic volcanic scenery.