Iceland became a bullet train heading at 100 miles an hour into a future upheld via a paper Valhalla rainbow of massive fiat-money infusions, which could fall away at any time. FULL ARTICLE by Andy Duncan
Source link: http://archive.mises.org/16875/how-iceland-became-paperland/
How Iceland Became Paperland
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Read it together with “This time is different” and you can see it even “more” clearly. Ah yes the “merits” of Fiat-money. It’s institutionalized superstition. Others name it Voodo-Capitalism…
Others have seen it before. Even if not getting in touch with the elder books one can see the end just by looking at Germany history of bank runs and state bankruptcies.
Or even better read Krugman an do the opposite of his suggestions
Bravo to you, Mr. Duncan, for recognizing a small, modern classic and doing it justice in your excellent review. I admired Philip Bagus’ “The Tragedy of the Euro” and read this warning tale from the cold depths of Iceland as soon as it became available. But what did Iceland do that the rest of the world has not done? Aside from engaging in currency mismatching, Iceland is a poster child for the consequences of massive moral hazard.
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