Prescient blog from 2006

Kindleberger’s seventh and final stage is when everyone realises that there is no value in the asset. This is what happened in Iceland last week. The rating agencies have downgraded Icelandic debts, money is flowing out and interest rates are rising in response. The currency is falling in tandem with the panic, and share prices across the board are falling.

Iceland, unlike Ireland, is not a member of the eurozone and therefore, its excesses cannot be fudged in the way ours can. Luckily, we do not have to endure the sudden stop/go characteristics of a country with its own currency and exchange rate. In many ways, this protects us, but in others, it desensitises us from the excesses of our own boom. 

From Irishman’s David McWilliams’ blog from 2006 no less 

Thanks Wilhjalm A. for the tip on David’s blog

Who will be the next Iceland?

This is a remarkable article because of the way it uses the word Iceland as a self-explanatory synonym for an economic crisis. 

From The Harvard Law Record

It seems the intangible price we have paid is to be universally known as a financial disaster.

To quote the VF article once more: 
Iceland instantly became the only nation on earth that Americans could point to and say, “Well, at least we didn’t do that.”

Which by the way seems to be the mantra of most politicians running for office in Iceland right now.