Since yesterday I had been pondering whether to write a story about the latest european clash or not. As you probably notice from the blog, I wrote it..
Icesave
I am one of the consumers (/suckers ?) that has/had an internet savings account at Icesave. Being attracted by the amount of interest that one got and by the seemingly well arranged support/guarantee’s. Black on white the following (my summary) is written: If you are an accountholder at Icesave, you are guaranteed for the first ~20.000Euro’s by the Icelandic bank. For the following 20.000Euro’s you are guaranteed by the Dutch National Bank (DNB) for a maximum of 90% of that amount of money.
That means that for every 1000Euro beyond the 20.000E you take a risk of loosing 100Euro. Now lately Financial Minister Wouter Bos increased that amount to 100.000E for national savers, and offers full insurance for Icesave accounts beyond the first 20.000E. So the 10% you could loose from that part is no longer an issue (thanks).
What is an issue now, is that the government and bank of Iceland are (seemingly) unable to pay for the guarantee’s they send out. Minister Bos today told the people that they are fighting hard to get the money back via the guarantee’s (Black on white signed papers), which is a good thing. I also understand that the Dutch government is not willing to pay this (I still understand); and he told that the account holders are responsible for their actions for “high interest saving accounts”. This part is something I less understand. I mean I do understand the risk that I took beyond 20.000E, I needed to sign for that and agreed with that risk. I also understood that the first 20.000E was covered by Iceland. What else should the account holders have taken into account? Is there anything we could have taken into account? Everyone that had more then 20.000E on the savings account willingly took the risk of loosing money from that part. Nobody that had whatever amount of money on the account, willingly took the risk of loosing the first 20.000E. So hence my question: what else could we have done? Information told that it was an healthy bank, that things where guaranteed, I really do not understand what we could have done to prevent it. Giving the current situation it does not make sense to rely on anything at all. All banks are potentially bankrupt at the moment, all accounts could just fall and everyone looses money, economics is all about having faith in banks, knowing that for an Euro you put on the table, you get a can of Milk or whatever. That’s faith and trust. Without that the economics doesn’t even exist in the first place!
I really hope that someone can explain to me what I could have done to have better insight in this before I made the jump to Iceland (and now potentially loosing a lot of money).
Economics
The above brings me to the point, are there still economic things in this world at the moment? For the western world I think there is no economy left at the moment. Everyone is afraid of loosing money, banks fall over all the time (Even the biggest ones!) some even get rescued (and celebrate that by a party which almost costed a million dollars, FROM RESCUED money which the country payed for, sad that people are screwed like that). Though everyone that will read this; PLEASE INVEST in banks. Banks need money, need faith and the Economic wellfare depends on it. If you have a little left, try to invest in safeguarded materials (not just savingaccounts etc). Banks can profit from that and restore behaviour (perhaps a few heads need to roll for that but that’s sad for them, they created a mess, they can go and do something with themselves).
This is no time to get worried and retrieve your money from your accounts; that will only make things worse!
Lets see what the world will do with the current situation, obviously some things need to change 
