Thursday, Oct 16, 2008
Iceland inflation could hit 75% as collapsed financial sector destroys currency (UK next?)
Bloomberg: Iceland Cuts Key Interest Rate to 12% From 15.5%
"Iceland's economy may contract as much as 10 percent after the collapse of the banks sent the krona [their currency] into a tailspin. The rate cut indicates the central bank has given up on controlling inflation, which may accelerate to as much as 75 percent in the next few months. The krona hasn't been traded between banks outside of Iceland this week after the central bank tried and failed to fix its value the week before. Its value remains undetermined. Iceland's benchmark stock index yesterday plunged 77 percent. Credit agencies don't expect the banks to be able to honor their foreign liabilities to bond investors. The government has so far failed to respond to questions on how it plans to pay back foreign bank debt."
Posted by drewster @ 12:38 PM (304 views) Add Comment
3 Comments
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1. Fjcruiser said...
Icelanders are probably already stock piling food.
2. mountain goat said...
Which country is next? Switzerland thanks to UBS?
European bank assets as percentages of their host country’s GDP
3. planning4acrash said...
Apparently the Swiss owns enough gold to back its currency, so, Switzerland may no be quite as bad off as you think, but they may loose all their gold to goldman sachs, who will be glad to buy it with funny money.