Thursday, February 25, 2010

Ice Cold Inflation

I've made many posts in the past regarding the challenges in Iceland. I continue to like the "layering of an onion" as a great metaphor for the economic contraction that continues to unfold. The "outer layer", being the most exposed, gets impacted first. The impact on the "inner layers" depends on the depth of the contraction.

The chart below indicates how quickly inflation can rear it's ugly head.

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