We have been warning about Iceland since September 1. 2005.
Now finally it is coming.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/23/cckrona123.xml
I visited Iceland 2005 ago and have been following it closely since.
Iceland is a microcosm of what goes wrong in a bubble economy.
All the financial companies have cross ownership in each other.
The central bank lost control, interest rates where 11+%.
The economy is so small that irrational exuberance had little to counter it. There is one, ONE, financial newspaper that everyone reads, and it was euphoric.
Now the bubble has burst and the whole thing is imploding in a deleveraging process, this will only get worse.
I have been warning about this on www.farmann.no since September 2005. I have told people to get out.
See my article from September 1 2005 (In Norwegian, I trust everyones Norwegian is fully up to speed, I should write everything in English…):
http://www.farmann.no/arkiv/2005/09/islandsk_oppkjo.html
The Icelandic banks are going to go belly up.
Their assets are going on a fire sale before long, opportunities for some.
This is going to get much worse.
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Updated October 6. 2008
See this video from today were I comment on Iceland:
[youtube]http://www.youtube.com/watch?v=gZA_f12t0QE[/youtube]
Farmann - TV Norway