SurvivalBlog calls this an economic cold war which is apt. Gorden Brown is one goose step short of a Stalinist so this sort of petty dictator move isn’t a surprise, but it should show you how serious the world’s debt fueled financial meltdown is:

Chelsea Building Society announced it has £55million invested in Iceland today as treasury officials flew out to Reykjavik for emergency talks.

The building society said the exposure represents 1.55 per cent of its marketable assets, but added the potential loss will not affect its ongoing business model.

The news came as Gordon Brown declared diplomatic war on Iceland.

A treasury delegation flew out amid fresh evidence that the effects of the collapse of three Icelandic banks was wider even than the £1billion known to be at risk in council savings.

The Prime Minister yesterday launched a furious attack on the ‘illegal’ refusal to pay back billions owed to British investors in the country’s failed banks.

He invoked rarely-used anti-terrorism powers to freeze Icelandic assets here as fears grew that vast sums of British cash could be lost.

Private savers, companies, town halls, police authorities and charities have seen up to £20billion frozen after Iceland nationalised its three top banks.

Most private savers should be compensated under UK government guarantees.

But these do not apply to public sector bodies and charities, and it emerged yesterday that more than 100 councils had invested up to £1billion of taxpayers’ money in Icelandic banks, lured by high interest rates.

Financial experts said that if the cash is lost for good, council taxes could rise every year for the next 25 years.

The article goes on to explain how Scotland Yard has lost 20 million pounds. More importantly he details the almost war like footing Gorden Brown is putting his government on in dealing with Iceland, who are effectively bankrupt and cannot pay off any debts. From the Mail:

The Treasury plans to send a team of senior officials to Reykjavik to thrash out concerns about the impact on Britain. Chancellor Alistair Darling said last night: ‘The Icelandic government, believe it or not, told me yesterday they have no intention of honouring their obligations here.’

Mr Brown said the attitude was ‘totally unacceptable’. He said: ‘I have been in touch with Iceland’s prime minister. I have said that this is effectively illegal action.

‘We are freezing the assets of Icelandic companies in the UK where we can. We will take further action against Icelandic authorities wherever necessary to recover the money.’

This is economic war, with Socialist Britain looting a floundering Iceland rather than admit their welfare state is unsustainable without huge influxes of imaginary wealth. When this doesn’t work Brown will no doubt send raiding parties to Iceland to pillage coastal towns.

That bailout we’re all on the hook for didn’t save the world after all. Can we get a refund?