Iceland Wants To Adopt The Dollar... No, Not That One, The Other One

Tyler Durden's picture

Not the US Dollar of course: why would the only country to successfully overthrow the chains of banker tyranny and default in their face want to ever have anything to do with the USD, the source of all the world's problems. No, the dollar in question is that of Canada. According to the Globe and Mail tiny Iceland, "is looking longingly to the loonie as the salvation from wild economic gyrations and suffocating capital controls...And for the first time, the Canadian government says it’s open to discussing idea. There’s a compelling economic case why Iceland would want to adopt the Canadian dollar. It offers the tantalizing prospect of a stable, liquid currency that roughly tracks global commodity prices, nicely matching Iceland’s own economy, which is dependent on fish and aluminum exports." Yes, yes, there are all the fundamental reasons, but more importantly, it is a huge slap in the face of those statists (and the United States of course) who keep repeating no matter the facts that the USD will never lose its reserve status. Here's a hint: it can and it will. And so much for the thought experiment of printing endless amounts of currency in non-reserve format and getting away with everything unpunished. Finally, there is this startling dose of reality from an earlier and calmer time, when S&P, back in 2006, released its long-term baseline scenario of sovereign debt ratings. This oddly prescient table speaks for itself.

And yes, reserve currencies come and go, not talking of Michaelangelo but of endless currency devaluation.

And some more from the Globe and Mail:

In brief remarks to be delivered Saturday in Reykjavik, Canadian ambassador Alan Bones will tell Icelanders that if they truly want the Canadian dollar, Canada is ready to talk.


But he will warn Icelanders that unilaterally adopting the loonie comes with significant risk, including complete loss of control over their monetary policy because the Bank of Canada makes decisions only for Canadians and the Canadian economy. He’ll caution, for example, that giving up the krona in favour of the Canadian dollar (CAD/USD-I1.01-0.004-0.34%) will leave the country with few levers, short of layoffs, to counter financial shocks and fluctuations in the loonie.


A group of prominent Icelandic business leaders approached Mr. Bones last year about the idea. And his speech Saturday, to a meeting of the opposition Progressive Party, marks Canada’s first public response.

Which is all well and fine, and congratulations to Canada, however remember that in a Keynesian world it is all relative, and the second one scale is tipped in your favor, it immediately starts the countdown on your own self-destruction, if one proceeds with reckless abandon. Such as the US.

So be careful Canada: with great power, comes great a desire to distribute wealth. And we have all seen what happens next.

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withnmeans's picture

Well well, looks like the FED is back in again today. buying "UP" the market. It is tough to play this market when the government owns all of the paint. They sure can paint the picture of "All is well".
Granted that sometimes you have to make the mood, however there is bad times and we have to take our lumps to make us stronger. Other wise if momma keeps giving us everything we want we become spoiled rotten brats with no backbone.

The trend is your friend's picture

I am slightly optimistic seeing the russell off 1.5% even though the other indexes are hanging in.  They can't buy up everything (at least not yet) and reality may come back to the markets at all is not well

Pladizow's picture

What does Iceland have the America can "liberate"?

VelvetHog's picture

Mmmm, I dunno?  Ice?  Volcanic ash? 

BW's picture

More fiat currency?  They never learn.  Back their currency with Gold and Silver and free themselves from the bankers control.

dwdollar's picture

Although the Icelanders are further along in their redicovery of what money really is, they still have a ways to go apparently.

Ghordius's picture

at the moment the only option is fiat - no country (for individuals the preference is different) wants a too hard currency

and no country wants to have a too small currency, too. It's not the optimal environment for small/hard.

There is simply too much liquidity sloshing around looking for bets to be made and speculative pressure to be applied.

I'm told by a good source that Iceland opened talks about joining the euro (politically this was on the table there) but they were "persuaded" to be quiet about it...

Game theory would predict further amalgamations and some small-currencies-disasters ahead...


I repeat: collective preferences are often not in line with personal preferences - particularly when a collective is engaged in some form of conflict with another - a lesson lost to many

Fiat Currency's picture

Yep - Fiat Follies.

Canada sold off almost all of its Gold Reserves. Guess what backs the $CDN ??

Yep ... US Treasuries.

Stupid is as stupid does. 

flacon's picture

Paper is paper....

Canada has a major debt problem - and housing bubble, IMHO...

Savvy's picture

Oh yes. We bought this house in 2005 for $139k it's now appraised at $290k. thas a bubble. Also Canadian banks have been hypothecating client assets (about $125 bn between RBC and CIBC alone) may smell pretty from a distance but the shit is just under the surface.

Alpha Monkey's picture

Do they convert thermal to other forms of energy?

steelhead23's picture

I am surprised no one bothered to respond.  Iceland has fantastic energy resources, primarily geothermal energy which it has exploited and is producing copious amounts of hydrogen and has conducted a number of hydrogen-based pilot projects.  I suspect that within 10 years most transportation will be pure electric, hydrogen, or electric/hydrogen hybrids.

bonderøven-farm ass's picture

The Svalbard Global Seed Vault......(to protect the public from non-GMO life forms of course........)

spiral_eyes's picture

That's (as you might expect from the name) in Svalbard.

GoodMorningMr.VanRumpoy...'s picture

It's there to protect someone, certainty not the public.

There is not much protection to come from the Svalbard Global Seed Vault when is owned by Bill Gates, the same international eugenicist who owns Monsanto, the company that is sowing the world with GMO destroyer seeds.

Cathartes Aura's picture

thank you for this link - it very simply details an exact agenda that anyone who cares can understand.

well worth a read.

Village Smithy's picture

Make sure you emphasize the "slightly" part of being optimistic.

Mark Carney's picture

Crap, thought they said they would dump all their Corona's for our dollar....shit.  BRB, gotta get a Labatt

Western's picture

Don't do anything stupid, Jamie Dimon might beat you up again.

Mark Carney's picture

Crap, thought they said they would dump all their Corona's for our dollar....shit.  BRB, gotta get a Labatt

memyselfiu's picture

A Labatt....I'm pretty sure you're not Canadian

A Nanny Moose's picture

I Prefer a Maudite or a Fin du Monde.

CPL's picture

Man they are good beers, there isn't anything that Unibrew makes that won't make a grown man cry in shame for drinking anything else.

debtandtaxes's picture

I love a good micro-brewery, too but Maudite??!  It's shite! Clearly you are not Canadian! Try Mills Street, Great Lakes Brewery or Okanogan. You'll probably go catatonic.

LongSoupLine's picture

LMAO...Spain, UK and Germany "AAA in 2020".  Great work (yet again) S&P.

GOSPLAN HERO's picture

Belize is better ... very lttle snow.

oddjob's picture

Some people like snow, you should go to Lytton in the summer,its a pleasant 40 C

redpill's picture

Time to go for the 1000x levered CAD/USD trade finally?


Good luck to Iceland

prains's picture

If iceland wants the loonie the canadians should force them to take the edmonton oilers in trade and have them renamed the panty soilers

Desert Irish's picture

Screw that send the Oilers to Toronto and the Leafs to wouldn't notice the difference and we get first draft pick.

Toronto Kid's picture

Would this mean we would finally be able to watch the team on the tv play in the finals ... in colour?



Savvy's picture

Can they take Luongo too? Pretty please?

GeneMarchbanks's picture

Canucks starting their own Ponzi? Can't say I'm surprised.

CPL's picture

As a Canadian all I can say is one thing.


Turks and Cacos


...don't need to go any farther in the conversation than that.  If anyone recalls the tiny island community wanted to be part of the dominion of Canada.  It was however kiboshed by Quebec because it would lessen their bargaining position (aka welfare payments).


I don't see Iceland getting much farther than T&C

ZeroPower's picture

Interesting, thanks for that.

Pretty ridiculous that quebec has any say in these sorts of things. They should be happy the country allows those seperatists (not speaking for all Quebecers (i.e. Montreal) here, just the hicks) to stay within the nation despite its attempts.

FranSix's picture

Haven't heard the words:  'The Dominion' since Deep Six Nine went off the air.  Icelanders are obviously loonie.

GoinFawr's picture

If the separatist referendum that province held in the mid 90's had involved all Canadians, like it should have, I'd wager Quebec would have become a US state, and lost every last one of it's privileged 'distinctions', years ago.

Why tf does Iceland want to adopt the currency of a heavily indebted country that is in all likelihood about to be Manifest Destinied by the US anyway? Don't they know  'mark to mark' Carney works...oer worked for GS for 13 years? You'd think they'd have learned their lesson on that one...

fiddy pence haff pound's picture

you got it right, goinF.

The latest politicians in Canada are doing the old Conservative trick of passing their legislation

under the noses of the Amerks first, before it goes to parliament. They did that lately for

copyright. So, they are already in the pocket of the American government.

It's only a matter of time before the US asks for Canadian help for a disaster which the US

will cause to happen to itself, and then ask for Canada to house hundreds of thousands of

Americans, and before you can say 'ipso facto', Canada becomes "Northern America".

I'm thinking of fracking victims with poisioned water as potential migrants. Maybe a nuclear

accident. Either one is the perfect crime. rich guys get richer and shift the plebes out of their own homes

and into the lap of the hapless Canucks.


I'm sure the conspiracy guys will say that it's already been written.


So, there's absolutely no chance of the US spinning this Iceland/Canuck currency to their favour. @sarc

GoinFawr's picture

Conspiracy? Nah, Canucks know all about it, they must, ~26% of the eligible electorate gave a majority gov't to a party whose leader says shit like,

"And we cannot be effective at major economic matters any longer unless we work with our economic partners around the world and work with them closely and intimately. That is essential. I know some people don't like it. It is a loss of National Sovereignty but it is a simple reality. It is a simple reality." - PM Stephen Harper (emphasis mine)

Since when does losing National Sovereignty have to follow 'working closely and intimately' with your partner exactly? Oh. Oooooooooooooh.

Like you said,

"The latest politicians in Canada are doing the old Conservative trick of passing their legislation under the noses of the Amerks first, before it goes to parliament." Old tricks are the best ones when you're dealing with the unbelievably short memories of Great White Northers, apparently.

 USean tag alongs the lot these days, for the most part.   Suits me: let's clean 'em out and let 'em clean it up! They'll probably thank their 'intimate partners' for the privilege,  and apologize for not doing it sooner too, lol! Hapless berks indeud.

Tread carefully Iceland.

memyselfiu's picture

yeah wtf is that about? Seems like we're lockstep with the americans now on mideast policy, see netanyahu trolling for kisses on his way to the US?

Cathartes Aura's picture

we're already trading troops in the homelands, BFF!!!!

Canada and the U.S. have signed an agreement that paves the way for the militaries from either nation to send troops across each other’s borders during an emergency, but some are questioning why the Harper government has kept silent on the deal.


solves that pesky question of "firing on your fellow countrymen" eh?

debtandtaxes's picture

The new Canadian copyright act has been shelved because our politicians have been forced to listen to us.  Tho, like the US, our political parties are all corporate footsoldiers - every party backed it! My emails demanding that the new law be quashed were met with pro forma replies about the need to protect copyright holders.  Such bullshit. 

But at least I can still legally download peer to peer at my house without worrying about the Emergency Task Force (Cdn SWAT) descending upon me OR being hit with a lawsuit from CRIA (our RIAA).

jackinrichmond's picture

the french get special treatment in canada.  most canadians don't understand why.

according to the history, if it wasn't for the french and the canadian indians, there wouldn't be any 'canada'.  their support during the war of 1812 and 1814 played a pivotal role in repelling the american invading force (which was about 10x the size of the combined canadian and british forces at that time in north america).  so, we sorta owe our sovereignty to them.  canada would not exist today if they did not cooperate in our defense at that crucial point in our history.