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Iceland Booms As The World Struggles

REYKJAVIK, Iceland – For a country that four years ago plunged into a financial abyss so deep it all but shut down over­night, Iceland seems to be doing surprisingly well.

It has repaid, early, many of the international loans that kept it afloat. Unemployment is hov­ering around 6 percent, and fall­ing. And while much of Europe is struggling to pull itself out of the recessionary swamp, Ice­land’s economy is expected to grow by 2.8 percent this year.

“Everything has turned around,” said Adalheidur Hedin-sdottir, who owns and runs the coffee chain Kaffitar, the Star­bucks of Iceland, and has plans to open a new cafe and start a ■ bakery business. “When we told the bank we wanted to make a new company, they said, ‘Do you want to borrow money?’” she went on. ‘We haven’t been hear­ing that for a while.”

Analysts attribute the surpris­ing turn of events to a combination of fortuitous decisions and good luck, and caution that the lessons of Iceland’s turnaround are not readily applicable to the larger and more complex econo­mies of Europe.

But during the crisis, the country did many things dif­ferent from its European coun­terparts. It let its three larg­est banks fail, instead of bail­ing them out. It ensured that domestic depositors got their money back and gave debt relief to struggling homeowners and to businesses facing bankruptcy.

Read the rest here: http://itmakessenseblog.com/2012/07/09/iceland-booms-as-the-...

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God bless the country who took in the great Bobby Fischer.

After America chased him all around the world for playing chess in Yugoslavia against U.S. sanctions.

Bobby spit on the order from the State Department ordering him not to play.

Then he wadded it up and threw it on the floor!

God bless Bobby Fischer and Iceland who took him in.

Unfortunately Bobby died 2 years after moving there.

"We have allowed our nation to be over-taxed, over-regulated, and overrun by bureaucrats. The founders would be ashamed of us for what we are putting up with."
-Ron Paul

Of course

throw off all the blood suckers and of course you will be more healthy.


Freedom - Peace - Prosperity

Bailing out homeowners isn't something I necessarily

agree with, but, it's a whole lot better than bailing out the foreign investors and banks. When government helps to distort the housing market and then people end up losing their homes, I think the government owes a little compensation. Even Ron Paul said he would give a tax break to people who lost their homes during the recession. Plus, with Iceland being such a small country, a social safety net isn't as big of a deal for them as it is for larger countries. Norway and Sweden managed to prosper for decades with bloated social safety nets because they were small, extremely productive, and there wasn't much poverty to begin with.

It was my understanding that

It was my understanding that Iceland had a referendum and voted to default on loans. The Icelanders refused to pay out the bankers' debts. Am I wrong on this?

You are right

You are right


so they didn't bail out the banks, but bailed out homeowners and businesses. Rather than taking the bad debt off the books, they still propped it up and surprise, now they have inflation.

Iceland not as bad as most,

in that they bailed out their citizens who had invested in Iceland's bonds and made the foreign investors(crony banks and other countries mostly) take the haircut. Yes they are still Keynesian but took steps that all libertarians should recognize as positive for the individual. Contrast that to what happened in the US where the banks were bailed out as they kicked foreclosed homeowners to the curb. Some folks need to read more Walter Block to understand this well thought out line of libertarian reasoning. My take on it is, just as our liberties have regressed by baby-steps, we may have to push back in baby-steps as well.


Heard from a friend in Iceland

This story mirrors what a friend (coincidentally living in Reykjavik) has told me. Anyone, ANYONE, who is able-bodied can find good work at the drop of a hat and make a living. He moved from England to be there and hasn't regretted it one bit.

Your friend is misinformed (partly, at least)

I am an Icelander, I live in Iceland and I can tell you that inflation is rampant, government debt is soaring and unemployment numbers are low largely due to an exodus of the country's workforce(mainly to Norway).

There are severe restrictions on foreign trade and imports, Icelandic citizens residing in the country are barred from owning foreign currency and the government keeps on writing off its friends' debts to the banks that it nationalized during the crash of '08. Two of those banks have been sold, with one left for the government to play with a little more.

I am currently saving my money for college abroad and am likely to make a permanent move later on, seeing as future prospects do not look so good.

I do not for a minute doubt your friend´s sincerity and he is right about there being some work here and there for those willing(especially low-income service jobs), but if you get the chance to ask him to check his sources about the economy, please be so kind. No offense intended.

Ron Paul 2012!

A. Kristjansson

Did you actually read the article?!

Judging from the positive comments on this post, nobody must have actually read the article because the writer attributes artificially inflating the money supply, bailing out delinquent homeowners with taxpayers dollars, and a "large social safety net" as key reasons that Iceland is supposedly doing better.

All of things that are commonly criticized on here from Keynsian inflationary monetary policies to Marxian welfare state programs are praised in this article.

This is why the liberty movement will peak out soon, because fewer actually read or understand the issues. The 2008 Ron Paulers were very well read but the newer 2012ers are unfortunately very ignorant of economics. The whole movement is become contrarian for the sake of being contrarian. Everything is wrong or a conspiracy.

"Capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism." - Murray Rothbard

"Everything is wrong or a conspiracy."

Thank you for sharing.


"Make the lie big, make it simple, keep saying it, and eventually they will believe it." -- Joseph Goebbels

They did one thing right which no one else is close to doing,

...during the crisis, the country did many things dif­ferent from its European coun­terparts. It let its three larg­est banks fail, instead of bail­ing them out.

But unfortunately, they've got a ways to go, and the banksters have got to be smiling still, unless they see movement to correct these other things:

...It ensured that domestic depositors got their money back and gave debt relief to struggling homeowners and to businesses facing bankruptcy. Oh, dear.

"If you want something you've never had before, you have to do something you've never done before." Debra Medina

Linda Cross's picture

A mortgage whose principal raises with the inflation rate??!

Only a banker could have thought of that one! "weighed down by inflation-indexed mortgages in which the principal, disastrously, rises with the inflation rate" For those of you thinking of moving to Iceland, that's a Polar Bear standing on the sidewalk. ;)

If you see something, say something, the government is listening.
Silence isn't golden, it's yellow.

It should be called....

"Ice City" because it's really only got the population of a small city in the US. What they did makes sense and is proof of how you can turn things around. But it's like comparing all the businesses in the US to one business in another country. There are some businesses booming here - but add them all up and we're hurting.

Note that the original article

Note that the original article comes from the New York Times:


Saddens me to say, but

Iceland and Ireland are the true leaders in this world of hurt, not the U.S.

If Shakespeare were alive today, he would be saying, " Something stinks in America."

Good for Iceland and Ireland!

"If you want something you've never had before, you have to do something you've never done before." Debra Medina

Doing some research into moving to iceland

America is done, with or without 'uncle ronnie'

This is what our politicians should have done with U.S. banks

as Ron Paul suggested. Nice article. Thanks for sharing.

"For Life, For Liberty, and For Freedom, OUR MOVEMENT IS ONE... And We Will Change The Course of History!!"