Iceland's currency, the Krona, has lost so much of its value, they have had to take it off the market and fix the value. Why? Did they debase their currency more than everyone else? Yes and no. Then what happened?
A: I believe large a amount of Euros are being exchanged for Krona because the Euro is seen as risky due to their own inflation problems in Europe. It's called "flight from risk" or "flight to safety." When enough people fly to a single currency, the risk of failure is greatly heightened, especially when the nation in question is as small as Iceland.
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