Here is an interesting read that will surely cause some debate on the internet forums. Iceland encountered the same debt issues as many others however, Iceland’s government was never in a position to actually bailout their banks. The debt was just too large for the small government to guarantee so, they had to go bankrupt and see devaluation instead.
Since everyone seems to be getting bailed out, it originally appeared we (United States) might not know what would have happened (only theory/speculation) if we actually went through the bankruptcy system that was in place for a reason, as many argued. Iceland provides us some insight. After writing off the bad debt, Iceland now has a clean banking system and is now showing a 1.2% growth in the third quarter with a full year of growth projected in 2011. This was all done without a bailout and 2 years later. Obviously, America is not a complete apples to apples comparison but, it creates an interesting question to ponder now that we have an actual test subject to compare us to.
So what should America have done? Bailout or Bankruptcy? If you’ve been following me for a while, you surely know my answer.
Full article here: http://www.theaustralian.com.au/business/news/iceland-in-better-shape-than-ireland/story-e6frg90o-1225967438036
CLICK HERE TO REQUEST CHART ANALYSIS ON YOUR FAVORITE STOCK
CLICK HERE TO STAY UPDATED WITH OUR FREE STOCK MARKET CHAT
CLICK HERE TO VIEW THE FREE FDA CALENDAR
CLICK HERE FOR YOUR FREE EMAIL SUBSCRIPTION
