A year ago people were talking about the “Icelandic economic miracle.” There were clever headlines and symposiums. If you google the phrase you can find PowerPoint presentations and long-winded explanations of what it is and how it works. As I peer out the window today, nowhere do I see a miracle in the works.

Jesus walking on water? That’s a miracle. Getting bumped up to Saga Class on my way to New York and again on the way back to Keflavík? A veritable miracle. The 58 newborns who were found alive in the rubble of a maternity ward three days after a massive earthquake struck Mexico City in 1985? That was a true miracle. Iceland performs well economically? Not a miracle. Not even in the slightest.

It’s miserable what’s happening now. Last year a friend took out a foreign-currency-linked car loan for ISK 1.6 million. The finance companies were pushing them hard. No one was taking out loans in krónur anymore. Today he owes over ISK 2.8 million, more than the car was every worth, and he’s already been making car payments for a year.

A two-child family in Ísafjördur took part of their mortgage out in foreign currency, as their bank recommended, and over the past month their monthly mortgage payments have more than tripled. If this continues they are looking default in the face and thinking about how all four of them can move in with her mother.

My friend working at one of the banks has to check the Internet news every morning to see if she should bother going in to work. When she does go in, she says everyone walks around like zombies, talking in hushed voices about where an out-of-work banker can make enough money to pay off their enormous-and-growing debt every month.

Another friend, who had all his retirement savings tied up in bank investments, has lost nearly everything. Entire life savings have been wiped clean. Careers are coming to a screeching halt. Families are out of their homes.

Luckily my car is paid off. My mortgage is in millions of krónur. My exposure to failing bank investment is negligible. And I left my bank job two years ago to come work for one of the world’s foremost magazines! Well, one of Iceland’s foremost magazines at least. But I am not most of the country.

This recession is not about reaching for the virgin olive oil instead extra virgin olive oil or getting the cloth seats instead of leather in the new Range Rover. The prospects are grim right now, and as the government rushes to patch this gushing wound, the grimacing nation freefalls with fingers crossed that the rumored safely net of socialism (that same one that the gung-ho capitalist have been pooh-poohing up until now) is strong enough to catch them all. The jokes made in passing about converting what’s left of your savings into rubles, or better yet, canned cabbage (which apparently has a longer shelf life than many Icelandic stocks), are receiving less and less laughter.

But there is laughter all the same. The Icelanders are nodding their heads and smirking as the financial system unravels, like a badly knit, albeit fashionable, sweater. The people exhibit such restrained grace as the economy goes down in flames because in the back of their minds they know that what happened in Iceland wasn’t a miracle at all.

Jesus might have been able to change water into wine, but Vikings, no matter how gruff, no matter how big their beards, simply cannot turn cold, hard ice into cold, hard cash. There are buoyant fundamentals to this country that even the heaviest of depressions can’t keep it down: ample natural resources, an educated workforce with the lowest dependency rate in Europe, 50-hour work weeks and an appetite for spending.

With everyone driving luxury cars and eating imported cheese, the boughie Icelanders aren’t too keen on going back to fishing and farming. However, Iceland does see krónur signs in its natural resources. Whether they will sell off their geothermal and hydro power to aluminum smelters, server farms or tiny electric cars from Japan is still uncertain, but it’s clear that the country’s foothold as a mover and shaker in the distribution of green energy technology is as firm as that winsome wave in President Grímsson’s immaculate hair.

Once the economy recovers some semblance of stability, anxious families move back into their homes, dejected retirees find ways to do without, and desperate people start looking for new jobs there will be a big question to answer: what now?

When a hungry man stumbles home at the end of a long night out on the town, he doesn’t reach for what’s good for him, he stuffs his face with what fills him up fastest. I only hope that as the Icelanders close the book on the “economic miracle” and open up the book on the “green energy miracle” they write their first chapters with a provident hand. That will be the true miracle.

JM – jonas@icelandrevierw.com