You may think the nation is safe heaven and banks are just as safe as the national economy 🏦.

Oh, well. It is not true at all.

Any nation can default, and your wealth can wipe out immediately!

It happened in Iceland, one of the economic miracles in the 90s until the 2008 global financial crisis hit.

The GDP of Iceland grew from 100% in 1998 to 900% in 2008!

Nothing in human history can beat that pace of growth, and not even the current economic miracle in China can beat that rate of growth 🤯.

How can a total of 330,000 population make such an economic miracle?

Well, it is all thanks to their banks.

➡️ Only three banks

Image credit:

Thanks to these three most prominent banks in the nation, which composed 95% of the national GDP, Iceland can grow faster through financial engineering rather than the true growth of their economy.

➡️ Privatizing banks

Image credit:

Thanks to the inspiration from the US, banks follow a credit default swap that brings more cash flow into the three banks.

➡️ Everything is cheap

The nation's rapid growth makes dilution on the cost of living cheaper, and many Icelanders take more risks on their mortgages.

➡️ Expansive housing

The economy is so good that everyone assumes they can afford more expensive houses. As a result, people are buying up houses like crazy.

➡️ High inflation

Inflation is high, but everyone can still afford it!

➡️ Then the market crashed 😱

The global market crashed in 2008, banks collapsed, and the brought down of the government. As a result, the government was out of money.

How long can the government support and save the economy when the crisis happens?

Nobody knows. At least we got cryptocurrencies 😉.