Wednesday, May 30, 2012

Forever blowing bubbles

Bloomberg: Iceland Property Bubble Grows With Currency Controls

Iceland’s crisis-management policies are creating the island’s next property bubble less than four years after its banking meltdown threw the economy into its worst recession. Prices for new homes touched a record last quarter, having surged 40.1 percent since the final three months of 2010, according to estimates by the National Registry of Iceland in Reykjavik. Average house prices have risen 11.3 percent since the market bottomed at the end of 2009, according to central bank data at the end of the first quarter.

Posted by wanderinman @ 09:32 PM (783 views) Add Comment

4 Comments

1. general congreve said...

I saw a program recently with a politician stating that they had only one the first battle against the banksta's in Iceland - when they didn't bailout their banks in 2008, but just ring fenced deposits (with printed money of course) - but not the war

Apparently the crooks just sloped off into the shadows and bought all their old loan books on Icelandic property on the cheap from their former banks! No real punishment, all that really changed was the name of the company holding the mortgage! They are still collecting mortgage payments on property that hardly crashed after 2008 and is now bubbling again.

May they all die on a cross of gold, scum bags!

Wednesday, May 30, 2012 09:45PM Report Comment
 

2. mark wadsworth said...

Ha! Another one of my theories turns out to be probably true.

Namely: that to get proper high inflation going, you need currency controls. it doesn't really seem to matter whether the country is trying to prop up or depress it's currency, whether it's using a peg, a cap, a floor, split exchange rates, limits on transfers, all these seem to lead to high inflation (i.e. ten per cent or more). If you have no currency controls, you can do what you want (see e.g. Japan) and print as much as you like, you don't seem to get high price inflation. The UK in its past few years of total monetary incontinence has barely managed 5% annual inflation.

Wednesday, May 30, 2012 10:57PM Report Comment
 

3. nomad said...

Presumable UK inflation is ready to fly with BoE Pension Fund 95% index linked.

Cynical, moi?

Thursday, May 31, 2012 10:12AM Report Comment
 

4. This comment has been removed as it was found to be in breach of our Blog Policies.

 

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