Iceland and economic warfare

There's conventional warfare with guns and tanks, there are cold wars of espionage and diplomatic wars of words. Of late we've heard of cyber-warfare where concentrated organized attacks are made on a country's computer and telecommunications infrastructure.

Now there's every indication that Iceland has recently been subjected to a planned and organized campaign of economic warfare perpetrated by huge multi-national hedge funds.

Getting back to the Iceland story; according to another recent Bloomberg report; Richard Portes, president of the independent Centre for Economic Policy Research, said a hedge fund tried to get him to bad mouth Iceland's economy. To his credit, he reported this event to regulators. Apparently one of the founding partners and senior executives of unnamed fund was trying to spread a meme that that Iceland's banks were in trouble for the purpose of capitalizing on the subsequent collapse in stock price (via short-sales and other 'negative bets' such as put options) that would skyrocket in price in the new global world casino bank.
As rumors are spread about Iceland, the fund sells short the Icelandic banks stock; driving the price down -- which has the effect of virtually validating the rumor -- with computers kicking in sell orders without any human intervention. More traders, hedge funds, and computers jump on the band wagon selling more stock short -- weakening the balance sheet of the bank - who is turn sends out distress signals to creditors -- and these signals get picked up by the funds (and computers) -- who in turn sell more stock short. The vicious circle repeats again.

Icelandic banks have had their ratings lowered and seen their value plummet - despite the grudging acknowledgement of the institutions doing the devaluing that nothing in their fundamentals justifies it. Nothing but a seemingly organized whisper campaign apparently planned and executed to profit a small group of hedge funds at the expense of Iceland's economy.

The same thing was supposedly done to Hong Kong and Australia and may be currently happening to banks in England and Ireland.

In other words, individual's net worths, house prices, jobs and the value of the currency in their pockets is becoming more volatile based on the behavior and rumor mill of a few hedge fund managers and bankers who operate as non-sovereign pirates on the high seas of finance. There size is now big enough to make it as easy to play around with the multi-hundred trillion dollar currency markets as it is to play around with the multi-hundred billion dollar stock and bond markets. And since the currency prices (and price signals) that are affected with these fund's raids are indistinguishable from the prices (and price signals) generated by more legitimate economic activity; used in part as the basis to determine political policies - it can be said that the funds have engineered a back door gateway into establishing a de facto world casino banking operation that can influence laws as well as currency prices to their benefit.