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Icelandic Recovery


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#1 Delhommey

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Posted 05 December 2012 - 01:22 PM

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Iceland fell hard in 2008. Its engorged banking system sunk and unemployment soared. The government was jeered out of office by dispirited voters in angry street protests. Young people packed their bags. As in the euro zone, the International Monetary Fund parachuted in with a bailout.


Its currency devalued by half. That boosted exports, like Mr. Palsson's fish, and trimmed costly imports, like cars. The weakened krona was hard on homeowners who borrowed in foreign currency, but Iceland's judges and policy makers orchestrated mortgage relief. Expensive foreign goods also ignited inflation. Consumer prices have risen 26% since 2008.


That rescue, in turn, weighed on the financial system. But unlike Ireland, for example, Iceland let its banks fail and made foreign creditors, not Icelandic taxpayers, largely responsible for covering losses.


Iceland also imposed draconian capital controls—anathema to the European Union doctrine of open financial borders—that have warded off the terrifying capital and credit flights that hit Greece, Ireland and Portugal, and now test Spain and Italy.


And instead of rushing into the sort of spending cuts that have ravaged Greece and Spain, Iceland delayed austerity. Initially, the country even increased social-welfare payments to its poorest citizens, whose continued spending helped cushion the economy.


http://online.wsj.co...1007652042.html


Amazing how that works...



#2 Kurb

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Posted 05 December 2012 - 01:26 PM

Can't see whole article.

Its currency devalued by half. That boosted exports, like Mr. Palsson's fish, and trimmed costly imports, like cars. The weakened krona was hard on homeowners who borrowed in foreign currency, but Iceland's judges and policy makers orchestrated mortgage relief. Expensive foreign goods also ignited inflation. Consumer prices have risen 26% since 2008.

That rescue, in turn, weighed on the financial system. But unlike Ireland, for example, Iceland let its banks fail and made foreign creditors, not Icelandic taxpayers, largely responsible for covering losses.


Iceland also imposed draconian capital controls—anathema to the European Union doctrine of open financial borders—that have warded off the terrifying capital and credit flights that hit Greece, Ireland and Portugal, and now test Spain and Italy.


I find this section much more interesting than the bolded part.

#3 pstall

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Posted 05 December 2012 - 01:31 PM

There was some congressman saying here how unemployment was a good investment because of someone being able to buy

#4 Delhommey

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Posted 05 December 2012 - 01:39 PM

The biggest thing was the devaluation of their currency, I'd say. And that's what's really hurting Greece, Ireland, Italy, and Spain.

#5 Davidson Deac II

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Posted 05 December 2012 - 01:45 PM

Good for them. But Iceland has an population and economy smaller than Charlotte. Any comparison between them and the US or them and the Eurozone (which btw they decided to join, a huge factor in their recovery) is not really relevant imo.

I do agree about the currency though. I think the greeks especially were hurt by their entry into the Eurozone and their inability to manipulate their currency.

#6 Proudiddy

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Posted 05 December 2012 - 01:45 PM

This is awesome. Why haven't we already followed suit?

#7 Kurb

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Posted 05 December 2012 - 02:08 PM

This is awesome. Why haven't we already followed suit?


Short opinionated answer ?

Unions/Big Banks dumping billions into campaigns on both sides/Failure of Leadership in Gov (top to bottom---- R to D)

#8 venom

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Posted 05 December 2012 - 02:47 PM

It would be moronic of the entire world to not follow Iceland's lead. Just shows how corrupt the western governments are.

#9 Wolf Stansson

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Posted 05 December 2012 - 03:07 PM

Aha! Taking the lead

#10 Bronn

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Posted 05 December 2012 - 03:55 PM

Be careful... When you start wanting and believing in things like this, you get on the slippery slope right into the rabbit hole that many of you accuse some of us here of being in...

#11 Davidson Deac II

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Posted 05 December 2012 - 04:13 PM

Short opinionated answer ?

Unions/Big Banks dumping billions into campaigns on both sides/Failure of Leadership in Gov (top to bottom---- R to D)



Even shorter answer. Because Iceland is very small and in no way comparable to the US.

#12 venom

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Posted 05 December 2012 - 05:25 PM

Even shorter answer. Because Iceland is very small and in no way comparable to the US.


That doesnt mean you cant draw foundational parallels in which to build on. The main blocker from similar measures coming to the US right now is that the banks and governments are so entirely corrupt and in bed with eachother, that they wouldnt allow it. They'd rather stuff their pockets and prolong their own selfish needs for all of eternity at the expense of millions.

#13 GOOGLE RON PAUL

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Posted 05 December 2012 - 05:56 PM

There was some congressman saying here how unemployment was a good investment because of someone being able to buy


welfare stimulates the economy, yes

#14 GOOGLE RON PAUL

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Posted 05 December 2012 - 05:56 PM

Even shorter answer. Because Iceland is very small and in no way comparable to the US.


you see because america is bigger it's totally unfeasible to throw bankers under the fuging prisons

#15 Proudiddy

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Posted 05 December 2012 - 07:07 PM

Yeah, I'm sorry DD, I can't agree with that... As Floppin said, I view it as a microcosm of our own system, and therefore, the policies implemented adjusted to scale should still yield the same or extremely similar results. And the big takeaway from their story regardless is that we are doing the opposite of what would turn our entire economy and system around, and our leaders continue to try to force a square peg into a round hole, knowing it's destined to collapse... But, hey, the top 1% are able to keep padding their pockets, so kewl beans.


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