By Dave Gonigam
Hooray for Iceland. The nation has effectively purged an entire class of zombies.
Late on Friday, the Icelandic government repaid $483.7 million in loans to the International Monetary Fund. Ahead of schedule. On top of another early payment totaling $900 million in March.
“Iceland’s main commercial banks collapsed in the space of a week as the global financial crisis struck in late 2008,” says a Reuters dispatch, “imploding under the weight of huge debts built up during an aggressive overseas expansion.”
“But the country’s rebound has been equally surprising,” the article goes on. “Iceland’s economy expanded in the first quarter at its fastest pace since its near meltdown, powered by a surge in exports, tourism and domestic consumption.”
No, it’s not surprising at all. Iceland allowed its rotten-to-the core banks to fail. A couple of bank executives have even — gasp — been hauled off to prison.
Meanwhile in the United States, “the productive sector of our economy is being eaten alive by the unproductive, zombie sector,” wrote Bill Bonner recently.
A “Safe Haven” for Tough Times
5minforecast (26 June 12)