What happens when a country goes bankrupt?

gingin_2

Can anyone explain, please, what happens when a country goes bankrupt.

Obviously, I am thinking of Iceland, but is this likely happen to the UK or US and when it does happen, what happens to the country's banks, industries, personal savings, mortages, house prices?

Please move if it is on the wrong board.

WTF?_2

gingin wrote: »

Can anyone explain, please, what happens when a country goes bankrupt.

Obviously, I am thinking of Iceland, but is this likely happen to the UK or US and when it does happen, what happens to the country's banks, industries, personal savings, mortages, house prices?

Please move if it is on the wrong board.

It would severely impede economic output as getting finance would be close to impossible for individuals and very difficult for all but the most robust business.

You'd see a decimated retail and service sector with resulting high unemployment. Imports would cost a fortune (your currency would have collapsed), enough to be out of the reach of most people. A definite decline in the standard of living.

The good thing would be that exports would be competitive. Over time the export business would pick up and drive growth. But you're likely talking a decade of being in the poop and in a global recession who are you going to export anything but food/energy to?

House prices would be the least of your worries.....

lostinrates

What historical precident is there for this happening? Presumably in the past if this were an issue they was military takeove adding to one empire or another? (I'm not suggesting that is an issue atm btw, I'm just aking a question)

PasturesNew

It has happened before.

Brazil went bankrupt in the 1990s.

Dan:_4

Everything will be written off and we can all start over.

leviathan

For Iceland it wont be anywhere near as bad as it could be for say the UK.

They have lots of resources, a population that knows about hardship and the drive to make something of their country.

TBH I think it might be a good thing for them.

Watch them emerge as a hydrogen/electric economy with no need to rely upon oil imports.
Plenty of cheap power for energy intensive foreign industry such as aluminium smelting, gorwing their own food for their own people and able to export the surplus for hard currency to trade for goods in other countries.

WTF?_2

leviathan wrote: »

For Iceland it wont be anywhere near as bad as it could be for say the UK.

They have lots of resources, a population that knows about hardship and the drive to make something of their country.

TBH I think it might be a good thing for them.

Watch them emerge as a hydrogen/electric economy with no need to rely upon oil imports.
Plenty of cheap power for energy intensive foreign industry such as aluminium smelting, gorwing their own food for their own people and able to export the surplus for hard currency to trade for goods in other countries.

If hydrogen fuel cell cars catch on they are in a good position with lots of cheap hydro and geothermal energy with which to split water into Hydrogen and Oxygen.

However, until then they are in dire straights.

neas

what happens when the world goes bankrupt?

hethmar

http://www.youtube.com/watch?v=c4TdPxOXuYw

BiggaThanBen

neas wrote: »

what happens when the world goes bankrupt?

I think we will see how this story would develop in the next generation of Hollywood movies .. blockbuster"Bail-out"starring Bruce Willis in the role of an old banker who is trying to save the system and help the whole world

MrMonkey

neas wrote: »

what happens when the world goes bankrupt?

The handful of rich people left will buy the world, just as they planned it.

George Soros times a million.