Quote:
Originally Posted by Steve_A
Hi jonhallur,
I think we need to understand that we can only make assumptions from the information we receive. We knew that Icelands' major bank went bell up and that the UK banks wanted their money back. That was the beginning as I understand it.
We also know that the Icelandic currency has been smashed by around 15% of its' value making imported products very expensive for the local people.
However, on the plus side, Iceland is now a very good place to go for international tourism as the visitors will get a favourable exchange rate and localproducts will be alot cheaper for these tourists.
I think Iceland is very interesting as it was one of (if not the) first nation to go into a serious crisis. Could it be the first to come out of one?
It could well be, as with being only a small country and the values that we are talking about are not all that great in relation to the global crisis in general, that with a strategy which works could set precedent for the rest of the world to follow suit. Could Ireland follow the Iceland recovery model?
Also it's good to communicate with an Icelandic person living in Iceland to give first hand information, which is ever so important these days. We all know what the media is like!
Best regards,
Steve
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British and Netherlands governments wanted the money back from savings accounts insurance.
Currency is now 126 isk for the dollar, was before around 60, so currency has dropped 50%. Back in 2001 the isk went to 112 for the dollar, so it's not an unprecedented disaster.
Tourism has dropped somewhat from last year, but I guess that is a global phenomenon due to the credit crunch.
My opinion (can not stress that more) is if we accept to pay UK and NL for the insurance on savings accounts we will go bankrupt (if a nation can go bankrupt, the Icelandic loan rating just dropped 60 points yesterday). These debts are were made by private banks, but like always the whole nation has to pay it back.
My point with the previous post was that for instance P. Peterson spoke with such conviction, like he knew what he was talking about, when he clearly does not know what he is talking about. Perhaps Iceland is technically bankrupt, I'll give him that, but that is not what he said.
Except for the fact that everything that is imported is 30-50% more expensive my life hasn't changed all that much after the crash. I can still travel abroad, import goods, etc. and the unemployment rate here is about 8%, which is way less then most European countries.
If anyone has other question about Iceland I'd be happy to answer them.
Regards,
Jón Hallur