Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. While I do make mistakes, I try hard to do my analysis thoroughly, and to make sure my data are correct (old habits die hard!) Also, don't ask me why I called it "Volewica". It's too late, now.
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Thursday, February 23, 2012
When the GFC hit Iceland, the authorities at first attempted to do the orthodox (but not necessarily the right) thing. They proposed a massive austerity program. The president of Iceland refused to sign the laws into effect. The people supported him. The government fell, and Iceland defaulted on its debts.
And guess what? Iceland's recovering.
One beneficial factor that Iceland had which Greece, Ireland etc don't, is that it had its own currency, the krona, which was allowed to devalue. But it's such an open economy and so small that that won't have had any major impact.
Posted by Nikolaos at 7:33 AM