Iceland Wants to Adopt the Loonie

[Toro]

Canadian envoy to Iceland sparks loonie controversy - The Globe and Mail

 

[Valerie]

That's kinda loony...

The Bank of Canada referred all calls about the issue to the Finance Department, where officials were tight-lipped.

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, and in the future, energy.

There’s also a more sentimental reason. They’re both cold, Arctic countries.

“The average person looks at it this way: Canada is a younger version of the U.S. Canada has more natural resources than the U.S., it’s less developed, has more land, lots of water,” explained Heidar Gudjonsson, an economist and chairman of the Research Centre for Social and Economic Studies, Iceland’s largest think tank.

“And Canada thinks about the Arctic.”

Officially, the Icelandic government is targeting membership in the 27-member euro zone. But support among Icelanders is slipping.

In a recent Gallup poll, seven out of 10 Icelanders said they would happily dump their volatile and fragile krona for another currency. Their favoured alternative is the Canadian dollar, easily outscoring the U.S. dollar, the euro and the Norwegian krone.

Iceland is in a bind. The country imposed strict currency controls after its spectacular banking collapse in 2008. Foreign-exchange transactions are capped at 350,000 kronur (about $3,500). A major downside of those controls is that foreign investors can’t repatriate their profits, making Iceland an unattractive place to do business.

Those capital controls are slated to start coming off next year. And many experts fear a return to the wild swings of the past – in inflation, lending rates and the currency itself. Iceland is the smallest country in the world still clinging to its own currency and monetary policy. The krona soared nearly 90 per cent between 2001 and 2007, only to crash 92 per cent after the financial crisis in 2008.

The official Icelandic government plan is to adopt the euro. Iceland has applied to join the European Union and eventually the euro zone.

 

[Ropey]

I wonder if they'll take Rex too as that could be a fair trade.

 

[Toro]

No way! Rex is awesome!

 

[Ropey]

No way! Rex is awesome!

Yeah, you've got a point.

[ame=http://www.youtube.com/watch?v=tshmrYZnjXs]CBC's Rex Murphy Rips Environmentalists - YouTube[/ame]

Rex:

Q: How many Canadians does it take to screw in a light bulb?

A: Every one of them.

 

[Procrustes Stretched]

Canadian envoy to Iceland sparks loonie controversy - The Globe and Mail

The Official Monster Raving Loony Party

United States National Official Monster Raving Loony Party