Tuesday, October 28, 2008

Iceland's Financial Crisis

Last January when I visited Iceland I was astonished by many things, from the art to the geothermal baths, but most of all the thriving economy. The first thing I noticed--- the first thing most visitors notice--- was Reykjavik's slick modern airport and the ubiquitous and even slicker bank advertisements. It was a mystery to me how such a tiny county (population equivalent to Palo Alto CA) could have become, in the space of only a generation, what appeared to be an island of paradise--- if with the crappiest weather outside of Fargo ND. As anyone who's been reading the news now knows, what I was witnessing was the bubble at its biggest--- just before the pop. So what's going on now? I've been checking in with Iceland Eyes and Iceland Review. Here's the latest, from The Daily Beast, by Arianne Cohen:

Is Iceland’s Collapse a Harbinger for What’s to Come in America?

I hear two things a lot here: “Kreppa,” which means “depression” in Icelandic. And, “We’re waiting.” That sums it up. Waiting. The first weekend after the crash, the partying was loud, as it always is. Then it got quiet. The AA meetings, always well-attended, have reached overflow capacity.

Iceland’s banking system was the first to go. You saw the same headlines they did on October 2nd: “Icelandic Banks Collapse!” “Billions Frozen!” “Icelanders See Icarus-Like Fall of Greed!”

The nation’s stunning economic implosion tipped off the domino chain that’s cascaded around the world. So does the aftermath of Iceland’s spectacular collapse foreshadow what’s to come for the rest of the world?

Until food and supplies run out, the country remains in the quiet before the storm...