Radix malorum est cupiditas.

In May of 2006, me and four of my colleagues did a 30 page research project. Its title and research question were the same; "Is Iceland heading towards a currency crisis?"

Our research methods were simplistic and our findings accordingly vague. Our conclusions were cautious, and mostly built around our tentative methods. However, we all did a lot of reading and research for the project, and our unofficial conclusion, the one we couldn't write about because we had no evidence to support it, was that it wasn't a matter of if, it was a matter of when. We did get this across when we presented the project, and the teachers thought we were being overly grim.

I just dug up this project and read it again. The methodology is still simplistic but on occasion the damn thing sounds almost prescient.

Praemonitus praemunitus.

There seems to be a lot of surprise at home, a lot of "How could this happen?"

I've been waiting for this for two years now. I was starting to think I'd been wrong.

Here's a fact, for those who have no background in economics; spending money you don't have is unwise. It is also the crux of the problem.

O tempora o mores!

Sometimes, when I explain how my parents built their first house, people tell me that their method of financing it was mad. What they did was build as much as they could, with the money that they had. Then they used what they had as a security, to take out a loan. Which meant they had more money, so they could improve the house, which heightened its financial value. Which meant that the value of the house could support a security for a higher loan. Which meant they could borrow more money to improve the house again...

This is, more or less, how the Icelandic banks could afford to expand in all directions. This is how we bought Magasin du Nord, Hamleys, and half of the London High Street.

Except here's the kicker; those Icelandic companies and banks were expected to be Icelandic companies and banks.

Pacta sunt servanda.

It means that just by virtue of having their headquarters in Iceland, it those financial institutions used the brand name Iceland as backing. It's like expecting your parents to support you when you buy your first apartment: of course they will, the question is, are they living in a villa in the richest part of town, or in an apartment in a high-rise in the slums?

And make no mistake; there's only three hundred thousand of us; our parents are the ones in the apartments in the high-rise in the slums.

The banks somehow managed to become eight times the size of the Icelandic economy. How the hell is the Icelandic economy expected to back that? And what's more important; why on earth didn't anybody ask the right questions? Such as, "is this wise?"

Because it wasn't. Oh, it wasn't. And not only did the banks create a bloated financial economy eight times the size of the economy of the country, oh no. They amassed debt that somehow became 700% of the Icelandic Gross Domestic Product.

This was beginning to happen in 2006.

Pecunia non olet.

So what really did happen? Well, basically, the Icelandic banks, having bought stuff with borrowed money they essentially did not own, ran into a bit of a pickle when it came time to pay some money back.

See, a loan isn't the same thing as a loan. Long term loans aren't much to be worried about. You can almost always get another one. Short term loans, however, are more or less equivalent to owing the mob money. It's not easy to get a long term loan to pay a short term loan (you were stupid enough to borrow money from the mob? I'm not coming near you with a five feet pole!) and once your deadline to pay off a short term loan is up, well, the thumbscrews go on.

I'm not saying things haven't been done wrong in the past two weeks. Some drastic, epic mistakes have been made.

I'm just saying, the writing was on the wall. And we ignored it. We did. Don't tell me we didn't, I've been paying attention. We did.

Solamen miseris socios habuisse doloris.

But it wasn't enough for the Icelandic banks just to use our money to finance their loan-asset-loan-asset-loan-asset purchase game. Oh no. They realized there was a great big world out there, and plenty of people wanted to make their money work for them. So they started banks wherever they could get a foot in the door, offering rates that honestly? Should have been questioned, but when somebody says something is 100% safe, well, it's finance. Us neophytes tend to trust the voices of experience.

And then suddenly the mob turns up on the doorstep, thumbscrews in hand, and the banks come running back to mommy with their tail between their legs, asking for a little pocket money. Except oops, the banks are 10 times bigger than the Icelandic economy, what the hell are we supposed to do?

And now we're faced with a situation where our errant banks haven't just been squandering our money, but other people's money too. And I don't know about you, but in my honest opinion, that is just not on. Because spending other people's money is really not all that far away from stealing, and the banks have been doing it in my name.

Of course it's damn fucking frustrating that the UK is asking for its money back, but guess what? I'd rather spend the rest of my life eating dried fish and working in a factory, paying off that debt, rather than let some high-falutin idiots with delusions of grandeur besmirch my name stealing from people like me in a country not my own. Seriously.

There's not a lot of money to go around at the moment. The UK has promised to help out savers who left their money in our care, even if they have plenty of problems of their own. I happen to think that's damn decent of them.

I'm not saying we only have ourselves to blame. I'm saying that the difference between Mrs. Jones in the UK who put her entire life savings into an account with Icesave and now can't access it, and Guðrún next door over who lost all her savings in the infamous Fund 9 are slim to none, and just because there's more of them than there are of us, we shouldn't be making the distinction. We should care just as much about Mrs. Jones as we do about Guðrún. And I know it's harder, but it's the right thing to do.

And okay, maybe I AM saying we have ourselves to blame, a little. We weren't paying attention. This is actually endemic of Icelandic society: We don't care much, as long as we're fed and watered. If we'd have cared, questions would have been asked long before now. If we'd have cared, we would probably have more qualified people dealing with this crisis.

Yes, I mean that. This didn't just magically happen because of the global credit crunch. The thing about borrowing from the mob is that they're going to turn up with the thumbscrews eventually. Maybe it wouldn't have happened today if the global economic realities were easier, but then it would just have happened a year from now. It was going to happen.

Let me repeat that one more time; this was inevitable.

Okay. I feel better, getting that off my chest.

Now for god's sake, someone please stage a coup d'état over there.