Iceland is a cold country with a very hot economy. Like us, it suffered a housing-related financial crisis in the Fall of 2008. Its stock market plunged, the country’s largest banks collapsed and were nationalized.
Unlike us, Iceland declined to bail out the bank bondholders (no TARPs in Iceland!)
Three years later, we’re flirting with a double dip recession and still have double-digit unemployment. And Iceland? Well, let’s hear from their Central Bank:
The Monetary Policy Committee of the Central Bank of Iceland has decided to raise the Bank’s interest rates by 0.25 percentage points.
…newly released data and the updated Central Bank forecast, published in Monetary Bulletin today, indicate that domestic demand and employment will grow more strongly in 2011 than was assumed in the last forecast.
“Unexpectedly” good results.
In view of the growing momentum in the domestic economy, as is described in the Bank’s updated forecast, the risk that a modest interest rate hike at the current juncture will derail the economic recovery is low…
Ben Bernanke and Barack Obama would kill for that kind of economic news, but won’t do something sensible like butting out and letting the private sector work.
Maybe because Wall St. banks donate big to Democrats and Obama (more so than to Republicans) and are really just welfare cheats in power suits.
Maybe because the collapse gave pols an excuse to create big pots of money (“The Stimulus”) and power-grabs (“Obamacare”) which became sources of goodies for their cronies and themselves.
Or maybe because just they’re idiots who can’t find their villages.
Regardless, Iceland is now sailing along like a Senator’s yacht while we’re headed for the rocky shore.
– Written by Bonfire of the Absurdities
Source: Sedlabank.is
