Time to Acquire Iceland?

I haven’t had much time to post lately on the financial crisis.  I have queued up a number of topics, but just haven’t found the minutes to commit them to WordPress… yet.  I hope to soon.

In the meantime, catch this late breaking news:

AP: Iceland’s Banks Falter

This is extremely serious.  Iceland’s banks are severely hit by the large amount of assets (including pensions) invested in now underwater securities.  Unlike larger countries, like the US, the GDP of Iceland is insufficient to actually let the government bail out their banking sector.  In fact, the banking sector in Iceland has assets of approximately 9x the GDP of the country, mostly invested in European companies.

From the article:

Prime Minister Geir H. Haarde warned late Monday that the heavy exposure of the tiny country’s banking sector to the global financial turmoil was raising the specter of “national bankruptcy.”

The government’s attempt to gain control of the increasingly dire situation and restore some confidence in the country’s hard-hit banking sector followed a day of panic Monday that saw trading in shares of major banks suspended and the Icelandic krona shrink in value against the euro.

I know things seem tough right now in the US.  However ironic as it may seem, however, the incredibly large size of the United States balance sheet (total national assets) and annual income (GDP) are formidable.  As a result, despite the current account and budget deficits, in the end, our economy is large enough to weather the storm if we don’t panic.

We may want to begin with a small acquisition at this point of a country with a small, weaker balance sheet.  Iceland seems like a good start.  The country has a GDP of $19B dollars (14B Euro) on a population of 300K.

With sufficient warrant coverage, we should be able to line up our potential 51st state with limited downside, assuming we can provide liquidity.  It would be good to have a subsidiary with currency exposure to the Euro, and we can easily assign them the requisite 2 senators and congressman based on demographics.

BTW Who does handle M&A for the US these days?  State department?