Bloomberg reports that icelanders take to streets to protest policy makers' failures:

(emphasis mine)

Icelanders Take to Streets to Protest Policy Makers' Failures
By Helga Kristin Einarsdottir and Tasneem Brogger

Nov. 15 (Bloomberg) -- Icelanders demanding the resignation of Prime Minister Geir Haarde and central bank governor David Oddsson marched to the parliament today to protest the leaders they hold responsible for the collapse of the nation's economy.

About 6,000 people out of a national population of 320,000 participated in Reykjavik, according to police Chief Superintendent Geir Jon Thorisson. Turnout doubled from a similar demonstration one week before, he said.

The march was peaceful, though some eggs, tomatoes and yogurt were thrown at the parliament building and rolls of toilet paper were burned in front of the main entrance.

``I criticize that those who made the mess are still in office,'' said Gunnar Hersveinn, a philosopher. ``I want to see change in the central bank, the government and the Financial Supervisory Authority. Elections should be held soon.''

The Atlantic island, which had the fifth-highest per capita income in the world last year, now needs a $6 billion International Monetary Fund-led loan to finance imports and to create enough foreign currency reserves to support a free- floating currency.

Central bank forecasts that the economy will contract 8.3 percent next year may prove optimistic if the loan isn't approved soon, said Lars Christensen, chief analyst at Danske Bank A/S in Copenhagen.

``There has been nothing but secrecy surrounding what happened,'' Hersveinn said. ``Every time I wake up, something new I did not know has emerged. It feels like being in a fog all the time.''

IMF

The IMF is withholding approval of its $2.1 billion loan until other lenders agree to fulfill their commitments to a wider bailout, Fund spokesman Bill Murray said on Nov. 11.

Norway has pledged 500 million euros ($635 million), the Faroe Islands 300 million kroner ($50 million) and Poland $200 million. That still leaves Iceland well short of the $6 billion it says it needs.

Complicating talks are U.K. and Dutch demands that the government repay depositors at the Internet unit of Iceland's collapsed Landsbanki Island hf. Those debts may amount to as much as 5.5 billion pounds ($8.2 billion), the size of Iceland's economy, according to a report by Jon Danielsson, an economist at the London School of Economics.

Iceland's government has accepted it will have to reach a negotiated solution to the dispute with the U.K. and the Netherlands to get the IMF loan, the newspaper Morgunbladid said on Nov. 13, without saying where it got the information.

The krona collapsed last month, and has lost more than two thirds of its value since the start of the year, following the failure and state takeover of the country's three biggest banks. The central bank tried to peg the krona to a basket of currencies on Oct. 7 and abandoned the effort the following day. Policy makers are now striving to resurrect the currency through daily auctions with local banks.

My reaction: The situation in Iceland is worth watching because it offers an ominous preview of what awaits the United States. Right now, Iceland's Krona is under foreign-currency lockdown, and the small island state is using up its currency reserves to buy essentials such as oil, grain and medical supplies for the winter. Luckily for Iceland, since it failed early (more countries will go under) and is a small country, it will get partially bailed out by the IMF and a few other countries. Unfortunately for the US, there is no way the IMF or anyone else will bail us out when the dollar collapses.

In case you are wondering, a 6 billion dollar loan for a country of 300,000 works out at about $20,000 per capita. It is going to take a lot of fish to repay that (Iceland's only major industry left is fishing).