“That is simple. In the Colonies we issue our own money. It is
called Colonial Scrip. We issue it in proper proportion to the
demands of trade and industry to make the products pass easily
from the producers to the consumers. In this manner, creating for
ourselves our own paper money, we control its purchasing power,
and we have no interest to pay no one.”-Benjamin Franklin, 1763.

Iceland Declares Independence from International Banks
By Bill Wilson

June 21, 2011 “Netright” — – Iceland is free.  And it will remain
so, so long as her people wish to remain autonomous of the foreign
domination of her would-be masters – in this case, international
bankers.

On April 9, the fiercely independent people of island-nation defeated
a referendum that would have bailed out the UK and the Netherlands
who had covered the deposits of British and Dutch investors who
had lost funds in Icesave bank in 2008.

At the time of the bank’s failure, Iceland refused to cover the
losses.  But the UK and Netherlands nonetheless have demanded that
Iceland repay them for the “loan” as a condition for admission into
the European Union.

In response, the Icelandic people have told Europe to go pound
sand. The final vote was 103,207 to 69,462, or 58.9 percent to
39.7 percent.  “Taxpayers should not be responsible for paying the
debts of a private institution,” said Sigriur Andersen, a spokeswoman
for the Advice group that opposed the bailout.

A similar referendum in 2009 on the issue, although with harsher
terms, found 93.2 percent of the Icelandic electorate rejecting
a proposal to guarantee the deposits of foreign investors who
had funds in the Icelandic bank. The referendum was invoked when
President Olafur Ragnur Grimmson vetoed legislation the Althingi,
Iceland’s parliament, had passed to pay back the British and Dutch.

Under the terms of the agreement, Iceland would have had to pay
£2.35 billion to the UK, and 1.32 billion to the Netherlands by
2046 at a 3 percent interest rate.  Its rejection for the second
time by Iceland is a testament to its people, who feel they should
bear no responsibility for the losses of foreigners endured in the
financial crisis.

That opposition to bailouts led to Iceland’s decision to allow
the bank to fail in 2008.  Not that the taxpayers there could have
afforded to.  As noted by Bloomberg News, at the time the crisis
hit in 2008, “the banks had debts equal to 10 times Iceland’s $12
billion GDP.”

“These were private banks and we didn’t pump money into them in order
to keep them going; the state did not shoulder the responsibility
of the failed private banks,” Iceland President Olafur Grimsson
told Bloomberg Television.

The voters’ rejection came despite threats to isolate Iceland from
funding in international financial institutions.  Iceland’s national
debt has already been downgraded by credit rating agencies, and now
those same agencies have promised to do so once again as punishment
for defying the will of international bankers.

This is just the latest in the long drama since 2008 of global
institutions refusing to take losses in the financial crisis. Threats
of a global economic depression and claims of being “too big to
fail” have equated to a loaded gun to the heads of representative
governments in the U.S. and Europe.  Iceland is of particular
interest because it did not bail out its banks like Ireland did,
or foreign ones like the U.S. did.

If that fervor catches on amongst taxpayers worldwide, as it has in
Iceland and with the tea party movement in America, the banks would
have something to fear; that is, the inability to draw from limitless
amounts of funding from gullible government officials and central
banks.  It appears that the root cause is government guarantees,
whether explicit or implicit, on risk-taking by the banks.

Ultimately, such guarantees are not necessary to maintain full
employment or even prop up an economy with growth, they are simply
designed to allow these international institutions to overleverage
and increase their profit margins in good times – and to avoid
catastrophic losses in bad times.

The lesson here is instructive across the pond, but it is a
chilling one.  If the U.S. – or any sovereign for that matter
– attempts to restructure their debts, or to force private
investors to take a haircut on their own foolish gambles, these
international institutions have promised the equivalent of economic
war in response.  However, the alternative is for representative
governments to sacrifice their independence to a cadre of faceless
bankers who share no allegiance to any nation.

It is the conflict that has already defined the beginning of the
21st Century.  The question is whether free peoples will choose to
remain free, as Iceland has, or to submit.

Bill Wilson is the President of Americans for Limited Government. You
can follow Bill on Twitter at @BillWilsonALG.