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Uh, Iceland's problem was that it was running its banking system on GB£ rather than local currency.

How did that become a point in favor of surrendering sovereignty over your currency?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Sep 9th, 2014 at 04:53:13 AM EST
The definitive report on the Iceland banking collapse is Willem Buiter's and Anne Sibert's.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Sep 9th, 2014 at 04:59:41 AM EST
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I would contend that the small size of the economy relative to the foreign cash inflows were capital in the inadequate monetary policy the country held fr so long.

luis_de_sousa@mastodon.social
by Luis de Sousa (luis[dot]de[dot]sousa[at]protonmail[dot]ch) on Tue Sep 9th, 2014 at 02:08:47 PM EST
[ Parent ]
That is trivially solved by procuring, in the open market, foreign exchange to match domestic liabilities and essential imports.

Of course, if a state insists on running insane economic policy, then it will be better off in receivership.

But a state which insist on running insane policies would generally be better off not being sovereign in the first place.

Moreover, the propensity of right-wing governments toward insane policies is only a weak argument against voting for independence, but a very strong argument against voting for right-wing governments.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Sep 9th, 2014 at 02:16:27 PM EST
[ Parent ]

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