Iceland at the brink of failure

By Jeff Benjamin Iceland’s economic meltdown, fueled by its exposure to foreign debt, could bring the country to the brink of failure, according to research from Hennessee Group LLC. “Iceland had one of the highest standards of living in the world just a few months ago,” said Charles Gradante, co-founder of the New York-based hedge fund advisory firm. “Now after experiencing the fastest economic collapse in history, Iceland is suffering from soaring unemployment, as well as double-digit interest rates and inflation,” Mr. Gradante said. … A study of the external debt in relation to GDP in several countries suggests the risk is not limited to Iceland, according to Hennessee’s research. Like Iceland, Ireland’s external debt, at $1.8 trillion, equals 900% of the country’s $200 billion GDP. The United Kingdom’s external debt of $10.5 trillion equals 456% of its $2.3 trillion GDP. Switzerland’s external debt of $1.3 trillion equals 433% of its $300 billion GDP. Even though it might not feel like it right now, the United States is in better shape with $12.3 trillion worth of external debt and a $14.6 trillion GDP for an 84% debt-to-GDP ratio. …

Iceland at the brink of failure