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Delhommey

Icelandic Recovery

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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.

Amazing how that works...
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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.

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

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

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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.

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

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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)

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

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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...

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