Snow wolves??? What's that about? I treked across Iceland. There are no wolves, bears, or dangerous predators. Definitely no snow wolves.

Or you can defer to civicmon who has a better insight into these things. I did forget to mesure the krona vs dollar/euro. With that said there would be three reasons to invest in Iceland:

1. You live in Iceland and/or plan on retiring there, with the returns beating inflation your money should outlive you.
2. You know for a fact that they will be joining the EU and converting to the Euro (doubt it)
3. You thought you were ordering a Corona.

Before opening your checkbook take a look at their benchmarked inflation, I just did they they have a target of 2.5% with a diviation of +/- 1.25%. That is redonkulous. They have a stable govenment and economy but they are not part of the EU which could make investing there a bit of a headache.

However, if you can get a 15% return over a year on a $100K with 7% towards fees, taxes and exchange you've only made about 8 grand which is $2K more than you could make here with the best bonds/cds, but you've got a headach to show for it.

I ended up losing a decent chunk of virtual money after wasting some time and gave up on it. :)

What this post is missing is that the Icelandic Krona has lost nearly 20% of it's value this year alone.

The Wall St Journal next to my desk says that the Krona has lost about 20% of it's value vs. the USD. I think the real amount has been 25%.

So, with a 15.5% interest rate, the real return is negative 4.5%

That's not a good investment in my world.

[finance.google.com]

The current rate for today is 82 Krona/$1 - it started the year around ~63/$1.

This is a bad article and while written for the right reason, a person who invested in Krona-denominated bonds would have a negative real-return after expenses and the forex depreciation.

I do this for a living... I really suggest that the novice even avoid these sorts of investments since the currency dynamics can really kill an investment's value.

There's a reason why the Krona has lost ~25% this year. There's another reason why their bonds pay 15.5%... it's because inflation is probably closer to 20%.

It depends, though, on where these people are looking. Overseas investments can be more lucrative because they're harder to research and thus have more perceived risk. If you do the legwork, you might find good deals. Factor in currency risk, transaction fees, etc, before making a decision. You might still be able to squeak 7-8%, but only you can determine whether it's worth it or not.

Saying that someone is smarter and has lots more money might mean that they're lazy and stay home watching for domestic market opportunities. There's a reason why most mutual funds only offer a few international funds - it's more work to do the research and due diligence, and you might have to read documents in a language other than English (horrors!).

Again, run the numbers yourself and see. There's no reason to listen to any of us yahoos doing a priori analysis and running thought experiments. If you had numbers, then we could dig in and really see if it was possible or not. Then again, if you had the numbers you wouldn't need to ask this board (you'd be asking over at fatwallet).

There is an ETF that specifically invests in high-yield currencies. It's the PowerShares DB G10 Currency Harvest (DBV). This tracks an index which is "comprised of long futures positions on the three G10 currencies associated with the highest interest rates and short futures positions on the three currencies associated with the lowest interest rates." This fund is invested in the 3 highest rate G10 currencies, all of which are more stable than the ISK. If you are specifically interested in taking advantage of high rates in certain countries, this is a reasonably safe way to do that since only the G10 are included; however, this strategy is no sure thing.

In general, I recommend EverBank highly, low fees, high interest, good friendly fast customer service, refunds ATM fees.

Foreign currency CDs:
[www.everbank.com]

At the end of the day, just remember, if it seems too good to be true...

especially in the world of finance, where hundreds of people WAAAAY smarter than you, with hundreds of millions of dollars more than you have probably already taken away the opportunity through their investments.

"This year, though, the country's currency, the króna, has fallen twenty-two per cent against the euro; the economy has stagnated; and a global rating agency has put the nation's three major banks on a credit watch. Now analysts are wondering whether the new Nordic Tiger will end up, instead, as 'the Bear Stearns of the North Atlantic.'"

Not exactly a great time to invest there.

To heck with interest rates, where can I get one of those money-eyed dogs? Walk one of those around the park and chicks would be all over me...

Those numbers piqued my interest

HORRIBLE Ben...just horrible. But you forgot to say "i'll be here all week, be sure to tip your waitress".

Because when doing foreign exchange the word of a stranger on the internet means something. :)

Seriously, though, I've done development work with both of them and they're both real, reputable companies.

I heard an interview on Marketplace Money(maybe?) about someone asking a similar question about investing in foreign companies/currency. They talked breifly about some of the laws/regulations/penalties/etc associated with said investing. The expert opinion: invest in mutual funds with holdings in the companies and or countries you are interested in.