Now that the IceSave agreement is throught Althingi and Olafur Ragnar Grimsson has signed, sealed and delivered it onwards, the focus is increasingly pointing towards the so-called “fortress” that the government promised to build around Icelandic households during the parliamentary campaign last spring.

It is now almost one year since the economic disaster with the accompanying fall of the ISK doubled foreign currency loans and increased price-indexed loans by 20-25%. With rising unemployment and inflation, shrinking purchasing power and a non-existent real estate market, Icelandic households have been hit by an financial catastrophe.

Speaking for my little family of two, all plans have gone out the window. Everyone we know our age (25-33) has been hit hard.

Yet, the “fortress” is nowhere to be seen. Since the government assumed power, Johanna Sigurdardottir has basically disappeared from the scene. Steingrimur J. Sigfusson and Gylfi Magnusson, Finance and Commerce ministers respectively have meanwhile belittled the problems of households by claiming that a debt canceling program for everyone would reward risk takers from the “good times”. This has been echoed by Arni Pall Arnason, who seems like a fish out of water as Minister of Social Affairs in a time when a strong minister is needed.

Now I would like to repeat something I said in a reply to another thread here;

“It is commonly accepted that when negotiating with a bank, the bank has considerable advantage(through knowledge, risk-tolerance etc). I cannot blame people who are not savy in the world of international banking and therefore at a disadvantage when predicting the way currency markets fluctuate.

A 45 million ISK mortgage seems ridiculous right now but in 2005-2007, it was assumed to be “average” for a mortgage(insert; what I meant here is that 45 million ISK could only buy you an average house in Reykjavik and surrounding municipalities). I wholeheartedly agree with you that it is mindblowingly risky to assume this sort of mortgage at that age but the environment contributed to this madness, for better or worse.

What the whole Icelandic debacle tells me is that we had a useless currency that fewer and fewer people trusted and more and more people wanted to escape from. Icelanders are not greedier or more stupid than the citizens of Western Europe or the US for example. We were just living in a make believe economy. A 25 year old is not supposed to know better, neither is someone 15 years older who’s skills lie elsewhere. Those who were supposed to know better (government, financial institutions, media etc) didn’t either or didn’t care.

And for almost a year now, our leaders have been absolutely unable to display any care for the perils of Icelandic households. And it becomes all the more frustrating to hear about massive debt-foregiveness of businesses that have been run into the ground by the very elite that is most to blame for the economic crash.

Now the Household Interest Group is making noise with their proposal of a debt strike on October 1. The group is encouraging borrowers to withold payments on their mortgages for 15 days in October, thereby calling the government to action.

Personally I like the idea and in September my household will consider whether we’ll participate. I realise that a successful action like this could have unprecedented consequences. Imagine a whole nation rebelling against its financial system. It could even deepen the trouble Iceland is in, as the citizens would be declaring a vote of no confidence against the system which depends on trust.

Personally I have no faith in the system. Since I left college I have spent seven years of battling this inhumane system . The capital of ten year loan I took for college which now has reached its sixth year is bigger than it was in the beginning. In three years my mortgage has grown by 25% even though I have paid 25% of the original amount to the bank.

I am reaching the point where I have got to say stop. I do not want to live in a country where price-indexation and an invalid currency enslave me for the rest of my life. If the strike or threat thereof sends a powerful message then I am definitely in.

If it doesn’t then I am most definitely out of here.

Related posts:

1. No To Useless Government “Solution”
2. Finally Debt Relief…For Independence Party MP
3. Inflation At 16%
4. A 110% Folly
5. The Currency Loans Were Legal – The Dark Side Of The Government’s Inept Solutions