It looks like the better part of Eastern Europe is going into IMF receivership. On Monday Hungary put in a request for financing with the IMF, followed by the Ukraine, Serbia and possibly the Baltic states in the last few days.
According to the Daily Telegraph, Iceland made a request to the IMF board for help in the financial crisis, over the weekend. A week earlier Iceland said it would seek a loan from Russia, but perhaps the terms were not so favorable. (I can imagine Putin/Medvedev demanding the air base at Keflavik and an annual tribute of sacrificial virgins.)
So the financial meltdown won't be a dramatic apocalypse, but rather a long, drawn-out, slide into austerity for the US and Western Europe. Eastern Europe and the rest of the semi-periphery will take it in the shorts in the form of lower consumption, lower pay and the drive to produce more exports to pay off the latest round of loans. The social safety net will also take another beating in the interest of cutting government debt at the behest of the IMF.
And I promise that the next post will be about food. Honest.
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