More proof (as if our own mortgage meltdown wasn’t enough) that one should be wary of “irrational exuberance” during economic booms: Iceland’s Government Topples Amid Financial Mess
The value of the country’s krona currency has plummeted, hitting many Icelanders who took out special loans denoted in foreign currencies for new homes and cars during the boom years. In addition, Iceland must repay billions of dollars to Europeans who held accounts with subsidiaries of collapsed Icelandic banks.
Oops.
On the bright side, the krona’s slide means visiting Iceland is cheaper than usual (last I checked, the exchange rate had dropped from $1=100kr to $1=225kr). Looks like for all the crap I had to put up with on my vacation last summer, putting off visiting Iceland for another year is going to work out in my favor.
Well, so long as the Øbama/Pelosi/Reid triumvirate holds off on hyperinflating the dollar until after I get back.
One curious point in the article is the description of outgoing Prime Minister Geir Haarde as a “fiscal conservative”. Wikipedia’s bio page describes his education so:
He received his bachelor’s degree in the United States at Brandeis University as a Wien Scholar, graduating with a degree in Economics, then went on to earn two Master’s degrees – in International Relations from the School of Advanced International Studies of The Johns Hopkins University and in economics from the University of Minnesota.
Unfortunately, I’m not familiar with the economic philosophies of those schools to assess just how conservative Geir might be.
