How we got screwed by the president

[Pekka]

No no no absolutely not forgetting debt as in you screw up your initial loan. And I mean mostly small businesses here, not individuals who get a loan to buy crap and then can't pay it back.

And there are such things as this done, in the US for example.

[Pekka]

However, as I support the system of loans and credit, I do have to note, that the future is looking weak in this sense. As of last year, I've been following the RFID-development with a strong interest in it, mostly about hacking it, modifying it etc.. in purposes of identity theft etc.

But they are actually thinking of putting RFID on money. Do you understand what this means? It means there will be no anonymity through money. SO what you say, this could be benefitial when you cross the borders etc, they see how much money you have, and even can record the individual bills.

Well, that creates a trace, you also who had that money before you etc. That also kinds of kills your chances for anonymity altogether.

You want to have privacy? Fine. Don't use money. Eat air.

It's seriously screwed up. I bet there will be proposal for imposing these both in US and EU, and they will both pass without public debate.

There are so many implications that any such proposal should be shut down before they are even introduced seriously. It also gives a new power shift paradigm. Now, the one who has the most money does not carry power as much as the one who controls the data on that money. That is, you can be truly ****ed if someone decides to mess with you.

[VetLegion]

Originally posted by laurentius
Capitalism schcapitalism I dunno. Some people just were very unfortunate, thats all.

You can always blame on the market forces or the value of Dollar or D-mark. It doesnt really matter who you blame. But it was you who took that loan and had it converted to foreign currency. A very stupid move. So which one do you want to sue, yourself or the currency rates?

(emphasis mine)

I'm trying to make sense of this thread. Let me see if I got it straight: many Finns in 1988-1992 took out loans tied to a foreign currency. When the exchange rate collapsed, they, being still payed in domestic curreny, found themselves unable to pay them back. Why weren't loans in Finnish markka in the first place? As far as I know, loans are usually tied to a foreign currency when the economy has inflation problems. Was that the case in 1980s Finland?

Also, can I get a figure of how much did bank sanation cost as percentage of BDP?

[VetLegion]

Bump?

I go through the trouble of reading a thread about Finland of all places and I ask an intelligent question too and ... what? Where's my T-shirt?

[laurentius]

Yeah yeah, sorry I didnt see it(was buried in the second page or something)

The Finnish finacial markets were largely deregulated towards the end of the 1980ties. This is essentially the ground from where the disaster stems. Neither people, the FA nor the banks had much experience in dealing with free flow of capital. Couple this with the 80ties optimism and you are in trouble.

The inflation was quite moderate in Finland ranging from early 80ties 3% to about 6.5% in 1990. The reason why the loans were taken in foreign currency was above all that the Finnish currency appeared to be stronger than it actually was. So people may have though their debts would get smaller when the Finnish Markka would rise against the D-mark for example. Essentially the banks were encouraging people to gamble.

[VetLegion]

I see. What about the total cost of bank sanation? I'd like to compare it to the cost of famous US Loan&Savings crisis and our own Croatian bank bailouts during the economic transition from communism.