Icelanders are used to obscurity but their country was suddenly catapulted into the limelight last year when the UK, Germany, the Netherlands, and other European nations cut off its central bank from access to much needed funding. Ministerial ire was focused on a tiny clique of people - the so called "Viking Raiders" - a close knit bunch of hedge fund managers, central bankers, lax regulators, and institutional speculators that managed to gamble away their entire country's fortunes several times over. The government was forced to nationalize ALL of the country's banks and assume their debts.
A deal was finally reached between Iceland's embattled Prime Minister (the prior government had collapsed) and European regulators over Icesave, the most notorious of the clique of banks that promised to pay out more than it collected in funds. Unfortunately, the deal came at the price of Icelanders' economic freedom as it basically enslaved the next 10 generations to debt repayment.
So, how are things one year later?
The Financial Times reports:
It is estimated that 65 per cent of Icelandic businesses and 25 per cent of households are on the brink of bankruptcy. Inflation is at 12 per cent, unemployment close to 10 per cent. House prices have plunged. Burglaries have doubled in the past six months
A recent poll revealed that almost a third of all adults and a disturbing 50 per cent of 18- to 24-year-olds were considering emigration. . . . One young Icelander put it more emphatically: “I don’t really have any great interest in spending my earnings to be paying down some daft debts my government is obtaining ... I’ll scrape some money together for a one-way ticket far away and take it from there. Maybe we’ll see each other in 15 years or so, who knows?”
Now, Icelanders seem like quite nice people. I've never actually met one but my sympathies go out to them. As an American, I am all too familiar w/being cheated by inept government officials and scheming bankers. We too have been burdened by decades of debt repayment. There are startling similarities between the last Icelander's comments about emmigration and many Americans' thoughts. Not necessarily emmigration OUT of the country but emmigration between states is becoming a more common trend - particularly as taxes continue to rise in certain areas (California and New York I am looking at you).
Now, if anything in this post is wrong, I welcome the opportunity to exchange thoughts w/an Icelander in order to set the record straight. On a more personal note, I've been meaning to visit the country for some time - it's only 5 hours away from where I live and I can appreciate a good bargain when I see one (the exchange rate is very favorable even after dollar debasement).