So Iceland is just one giant financial crater. To add insult to injury, someone even put the whole country on eBay. The listing was withdrawn because even eBay has standards.
Here’s a chart of the Icelandic Krona against the US dollar for the past few years:
There is nothing but doom and gloom in this tiny half-frozen nation. Just recently their 90th anniversary as a country was marred by protesters breaking into the Icelandic Central Bank. Things ended peacefully because, well, this is Iceland, after all.
But I can’t shake the feeling that this is actually an opportunity for a vulture-minded and deep-pocketed investor. There are many different ways to play an Icelandic recovery. I would avoid a straight play for government bonds or going long the currency (especially since there is little if no trading taking place).
Real estate would be a good alternative. Land isn’t going anywhere and neither will a building disappear. People still need a place to live, after all. Another possibility would be equities - blue chip stocks.
Argentina went through something similar in 2002 - although alone and unaccompanied by the rest of the world. But their currency did recover. From its deep slump, it rallied around 30% actually. And just recently has started to weaken again:
Of course, Argentina isn’t doing that hot right now. They were just getting back on their feet (or knees at least) when this new worldwide economic storm buffeted them again.
But I just can’t shake the feeling that Iceland will still be there a year from now, 10 years from now, and beyond. And someone will make a lot of money betting on that.
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