Comments on: It Came To The Point Where I Saw No Sense In Continuing To Pay http://www.economicdisasterarea.com/index.php/news/it-came-to-the-point-where-i-saw-no-sense-in-continuing-to-pay/ Iceland Financial Crisis Wed, 07 Sep 2011 07:45:55 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Bromley86 http://www.economicdisasterarea.com/index.php/news/it-came-to-the-point-where-i-saw-no-sense-in-continuing-to-pay/comment-page-1/#comment-1996 Bromley86 Wed, 02 Sep 2009 09:21:21 +0000 http://www.economicdisasterarea.com/?p=2784#comment-1996 >Indexation of loans is not something that developed countries do! And they thought they could be international bankers? What a joke! Whilst I agree, is there really any actual difference between the Icelandic system of indexation and the rest of the world? As I understand it (which is probably imperfectly), Icelanders experienced a lower rate of interest on those ISK loans than they would otherwise have faced precisely because they were indexed. No one is going to lend money for extended periods of time at less than inflation. So variable interest rates in the rest of the world effectively include indexation, whereas those in ISK Icelandic loans separate the two elements out. >Indexation of loans is not something that developed countries do! And they thought they could be international bankers? What a joke!

Whilst I agree, is there really any actual difference between the Icelandic system of indexation and the rest of the world?

As I understand it (which is probably imperfectly), Icelanders experienced a lower rate of interest on those ISK loans than they would otherwise have faced precisely because they were indexed.

No one is going to lend money for extended periods of time at less than inflation. So variable interest rates in the rest of the world effectively include indexation, whereas those in ISK Icelandic loans separate the two elements out.

]]> By: Bert Pachetta http://www.economicdisasterarea.com/index.php/news/it-came-to-the-point-where-i-saw-no-sense-in-continuing-to-pay/comment-page-1/#comment-1992 Bert Pachetta Tue, 01 Sep 2009 18:03:11 +0000 http://www.economicdisasterarea.com/?p=2784#comment-1992 Indexation of loans is not something that developed countries do! And they thought they could be international bankers? What a joke! Indexation of loans is not something that developed countries do! And they thought they could be international bankers? What a joke!

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