In Iceland's specific case, broad-based monetary aggregates such as M1, grew at a rate of 20–30% per annum every year between 2002 and 2007 (...) With a bountiful quantity of liquidity available at historically low prices, the outlets of this monetary expansion saw their values rise to ever greater heights. The average house price in Iceland saw its value increase almost 30% in domestic króna, and every year between 2003 and 2007 saw a greater-than 10% annual price appreciation.
A significant boom had materialized, much of it realized in foreign currency at captivatingly low interest rates. However, when the house of cards finally came tumbling down, this boom sustained on foreign currencies soon came to an end.
Iceland's Banking Crisis: The Meltdown of an Interventionist Financial System, Mises Daily by Philipp Bagus and David Howden
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