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ICELAND, this volcanic island near the Arctic Circle, is on the brink of becoming the first “National Bankruptcy” of the global financial meltdown.

Iceland, which appears just before India in the Country drop-down list, revealed on Thursday that the whole of Iceland has gone bankrupt following the collapse of the only Icelandic Bank, Landsbankinn. The government of Iceland shut down the stock market and seized control of its last major independent bank. The Country is struggling to get a grip on the collapse of its banking system and thousands of people have been left without jobs as the credit crunch hit Iceland.

ICELAND is all but officially bankrupt. The only option left with Iceland is to be bailed out by the International Monetary Fund. That’s a clear sign that the global financial crisis is entering a new and vastly more dangerous phase, where we are paying the price of the lack of a global financial regulator and global central bank.

Million dollar question: Which other countries are heading in the same direction as Iceland — BANKRUPTCY?

Most exposed are countries with large amounts of external debt relative to the size of their economy. By this measure, the U.S. is relatively well off, with external debt about equal to GDP. The euro zone has some weaknesses — Belgium, Ireland and the Netherlands have uncomfortably high debt levels. Italy is at about 100%, and Germany and France are in the 140-150% range.

The only savior will be the ‘political framework’ of a Country.

The road is slippery, which is looking like the Great Depression. The question is: Will these major players act collectively?

On October 10, we were at a situation that we may even touch below 10,000 level. Prime Minister Manmohan Singh who was in Srinagar to inaugurate the first train service in the troubled valley was forced to acknowledge the problem and assure the people across the country and beyond that everything was in control and there was no reason to panic.

Finance Minister P Chidambram who has been reassuring the industry and the country about the stability and good health of the economy today cancelled an important visit to Washington DC.

As an investor, I also felt that markets will stop at one point but there is no end for this erratic market which is not in the mood to listen any positive news but reacts on a slightest of negative news.

Chidambram has recently reviewed the Balance Sheets of the leading banks and has assured that our banks are based on strong platform. Indian economy is still intact and companies are still acquiring businesses from all around the world.

The problem lies with US and which is partially spread to Europe. Yes, up to some extent we may be affected as we are taking the beating as a result of problems faced by the global leaders but at some point of time our markets will derail from the crisis and may trade stable. I feel the moment is very near.

The key is to have patience and watch the market closely. According to me, a retail investor should not look at selling options and should show some patience, as it always pays. Also, this may not be a good time to enter the market to average your positions. Retail investor should wait for the market to show some stablility, let it recover some part and then intelligently invest in fundamentally strong stocks.

BUT THE KEY IS PATIENCE!!! WE ARE HERE TO STAY as our grounding is strong.