Sunday, September 15, 2013
It's reasonable to question whether it's prudent to invest in stamps issued by a country in which the economy is in a shambles, and I offer three reasons for doing so. Firstly, I believe that Iceland will eventually recover from its current economic problems, and as I commented in an earlier article, often the best time to invest is when there's "blood in the streets." Secondly, there are many stamp collectors who focus on Scandinavia as a region, so demand for stamps of Iceland is broad- based. Thirdly, the stamp is a Bird Topical.
While I usually recommend obtaining expertization when purchasing scarce overprinted issues, it's not necessary in this case, because the basic airmail stamp is worth about the same as the air official.
A nation of about 320,000, Iceland has been hard-hit by the European Debt Crisis. Prior to the recent economic contraction, Iceland was the seventh most productive country in the world per capita (US $54,858), and the fifth most productive by GDP at purchasing power parity ($40,112). Except for its abundant hydroelectric and geothermal power, Iceland lacks natural resources; historically its economy depended heavily on fishing, which still provides 40% of export earnings and employs 7% of the work force. It was hit especially hard by the ongoing late-2000s recession, because of the failure of its banking system and a subsequent economic crisis. Before the crash of the country's three largest banks, their combined debt exceeded by approximately six times the nation's gross domestic product of €14 billion ($19 billion). Since then, the government has instituted some financial reforms, and by June 2012 managed to repay about half of the debt. Average annual GDP growth has been flat over the last 5 years, but seems to be recovering.