Excellent, though long, article on the current economic crisis and Iceland. Iceland is a small country that joined the globalized finance and banking bubble in a big way in the last 10 years. The credit crunch and US housing price declines of 2007-09 have brutally punished this small northern Atlantic country.
Read all about it here at Wall Street on The Tundra from Vanity Fair. Here’s their intro.
Iceland’s de facto bankruptcy—its currency (the krona) is kaput, its debt is 850 percent of G.D.P., its people are hoarding food and cash and blowing up their new Range Rovers for the insurance—resulted from a stunning collective madness. What led a tiny fishing nation, population 300,000, to decide, around 2003, to re-invent itself as a global financial power? In Reykjavík, where men are men, and the women seem to have completely given up on them, the author follows the peculiarly Icelandic logic behind the meltdown.