The strength of any nation is its manufacturing and natural resources. England has North Sea oil but does it manufacture anything? Look to Ireland for your inspiration. Low taxes and high tech industries are making a huge difference.

russ, Franklin, North Carolina USA

I hope Obama is the FDR

Jim Miller, Huntington,WV, USA

watch www.zeitgeistmovie.com people!

jan, london, GB

Both the US and the UK are more "service" and specialty manufacturing economies these days.
One of the things that may drag out the recovery is that everybody has pretty much rung all the "productivity" out our latest tech wave, the IT age. So the recovery might be at the end of a long flat spot

Douglas R. Chandler, Plano, Texas

UK Problem is worse, taxpayer will pay in UK for the rescue of the banks in Iceland the foreign creditors will have to pay not the people of Iceland

Helgi, Reykjavik,

The UK amazes me, u don't seem to produce anything much of value, yet your currency provides you with spending power for imported goods we here in Canada could only dream of; despite our massive trade surpluses, balanced budgets, vast oil deposits, our gold, high tech & manufacturing, what gives?

John, Ottawa, Canada

come and emigrate to western australia or queensland,the weather is warm most of the year so outdoor activities are low cost,low heating bills ,plenty of work ,you can still buy a house for under 1250000 pounds in a lot of places and the economy is still ticking over ok.very good lifestyle indeed.

henry, mandurah , australia

What makes me laugh is that the problem was caused by people borrowing money that was not there. Now the government is doing it. It never took a rocket scientist in the first place to see this all coming. How all these bankers, economist and government advisors couldnt see it is beyond me.

simon, Edinburgh, UK

Let it all slide to its natural low. Most people have become to greedy and focused on worth and having more. This is just the world's natural way of rebalancing things. Maybe now the focus will be on more important things than a new car with a better badge.

Charlie Cheshire, Wensleydale Well, UK

The economic situation is becoming critical. I wonder how anyone can say that Mr Brown is doing a good job of cleaning up the mess he made. We need action now. The government should start lending to companies now and cut the rate of VAT now!

Phil, Watford,

Remarkably, the BNP's Nick Griffin has been saying something very similar for a long time. I suggest people go the the BNP website & read it.

My own opinion is that Globalisation can only make everything worse. International trade is fine, but it needs to be very carefully balanced.

Herbert Thornton, Victoria, Canada

"mass unemployment and social unrest. "

It is a legitimate concern that inner-city populations of poor people will ignite in a larger version of the 70's riots.

Will the banking collapse result in troops having to keep order on the streets? It is not impossible.

Pete Tesseyman, Birmingham,

The weather is similar to Iceland too...!

Tom W, cheshire,

Well that's it then. I'm going off to the canal to see what I can catch!

colin, wolverhampton, uk

Great article. Alarming, but well thought out analysis. I wish that people had listened to the warnings like this before it was too late. Depression is on the way, 5 years of economic gloom and political turmoil worldwide. Very alarming, never give the banks so much responsibility ever again.

Paul, Carlow, Ireland

When we get out of this mess we are going to have to find another, non-delusional way to make our national living. Playing around with property adds little value and finance is much the same if it can't be constrained to lower risk strategies. Now is the time to be thinking about this key issue.

Colin, shrewsbury,

It just gets better and better! Good article, well done. Now where can I put my cash? Gold, sliver, mattress-anyone with an answer?

MGrelton, London, UK

The best concise summary of our present circumstances that I have seen.

Gordon, Kirkcaldy, Scotland

when iceland went bankrupt it was local but if the city goes under it will drag the entire world with it. The key statement you made was we borrowed everyone else money. The entire world has a stake in the city it truely an international problem just as much for the lenders as the borrowers

paul gilboy, newcastle , england

Although the title is catching and an interesting thought, it is getting tiresome reading such negative articles.

I'm not an expert and would like a balanced view. Experience tells me this situation is probably an opportunity for most people even if only in a relatively small way.

Peter, Lancashire, UK

Mr Hosking brings to light some uncomfortable similarities. One wonders then whether the same conditions will apply for the UK as enforced for Iceland by Mr Brown if and when he seeks a loan from the IMF? These conditions could leave you in more debt per person than the Germans after WW I.

Engilbert Sigurdsson, Reykjavik, Iceland

What nobody seems to realise is that the real damage and destruction is done during the boom, not the bust: the bust is merely the inevitable manifestation of the earlier damage (although much of the damage often manifests itself more subtly, but no less destructively, during the boom itself).

James E. Petts, Burnham, England

In 1975 (under Labour) the UK became only the second democracy, after Iceland, to survive an inflation rate over 25% without a revolution.
In 1976 (under Labour) the IMF bailed the UK out. The next advanced economy to get the IMF in was Iceland, in 2008.
Spooky or what?

Dave, Slough,

Spot on. Well said. Same goes for Australia.

David, Melbourne, Australia

Things are not so bad, yet!

People in Iceland will start feeling the pain in Jan/Feb/March. Most people still have work, but many have been laid off and are working their 3 month notice period.

The worst is yet to come...

Omar, Reykjavik, Iceland