After reading Brenda Yun's piece on Iceland (the most recent Photo of the Day), memories of the Blue Lagoon's warm waters rushed back to me ... as it did yesterday, when I saw Slate's coverage of the country's economic collapse. When I came home from Iceland back in June, I joked that its population was roughly the size of my neighborhood's. Thanks to Slate, I have confirmation. Thanks to Nathan Heller, I can now say with confidence that Iceland's population of 313,000 is slightly less than that of Manhattan's Upper West Side, which, I learned, is around 2,600 miles away.

Reinforcing the notion that now is the time to visit Europe's most remote corner, the Blue Lagoon's average temperature is 100 degrees, even in winter! So, make their loss your gain. Hey, had the locals heeded the word on the street, they would have known that the economy was about to tank.

When the waters have worked their magic, head back into Reykjavik to witness the street protests that have occurred every Saturday since the middle of October. Despite the cold, outraged locals gather to call for the jobs of the leaders who sent the economy swirling down the drain.

I never knew there could be a book so thoughtful and inspiring for women as this one. Stephanie Elizondo Griest's second travel book, which lists far more than just 100 Places Every Woman Should Go, is truly an encyclopedia for women travelers. It's the kind of book that could never have existed fifty years ago, but is so refreshing that free-spirited, female travelers should feel grateful that it exists now, and fully prepared for that next trip into the wide, wonderful world.

Griest's great book is packed with helpful historical information, inspiring stories, and travel tips. It's broken up into nine sections -- my favorite being the first: "Powerful Women and Their Places in History." There's so much worth digesting in each locale described. For instance, I had no idea that the word "lesbian" came from the birthplace of Sappho (Lesbos, Greece). Griest fills each description with great travel tips that often include specific street addresses for particularly noteworthy sights.

If you're going to walk around Reykjavik, Iceland, do it with Jonas Thorsteinsson. A guide on the GoEcco walking tour of the city, he knows more than which Viking killed who, where and how. In fact, the only word to describe Thorsteinsson is "prophetic."

I took his free walking tour backing June. The most insightful moment came when Thorsteinsson showed us one of Reykjavik's oldest houses, which was then on the market for $1 million-thanks to the decimation of the Icelandic Kroner, the price has probably come way down since then. Thorsteinsson explained that Iceland had been caught up in a real estate bubble, with mortgage rates reaching an absurd 20 percent. Think about putting a $1 million home on your credit card.

"It's not going to last," he noted. "It can't." Remember: he said this in June 2008.

Thorsteinsson called it well. By October, Iceland was on the verge of financial destruction, because of a credit-fueled disaster. For tourists, the moral of the story is clear: take the GoEcco walking tour. You'll learn more about the locals than you will anywhere else.

By the way, Thorsteinsson suggests that you buy a hot dog at Baejarins Beztu. I agree. The mustard has a hint of the same taste you'll find in Oscar Mayer cheesedogs, which I happen to enjoy.

Hidden far away in the North Atlantic, Iceland may seem like one of the last outposts for globalization to reach. One economist stressed that a century ago, Iceland was essentially Ghana in terms of economic development. And even as late as the 1970s, Iceland still remained one of the poorest countries in Western Europe, with a major portion of its economy reliant on fishing. Yet today, Iceland is, according to the United Nations Human Development Index, the most developed country in the world, with one of the highest rates of life expectancy, literacy, and per capita GDP.

So how has Iceland gotten where it is today and what exactly went wrong in the last month?

The answer to both is financial globalization. The very forces of global integration, which led to deregulation of the banking sector and creation of a national stock exchange, nearly pushed this distinctly first-world country a few weeks ago into "national bankruptcy," in the words of Prime Minister Geir Haarde.

What's really scary is that the on-going Icelandic crisis has been in large parts an external crisis of confidence. Its three major banks were quite well-behaved, with little exposure to the "toxic" subprime loans we've all heard so much about. But ultimately foreign lenders to Iceland's banks did not see the government as a credible lender of last resort. In other words, although the banks were too big to fail, they were also too big to bail (out).

These are not great economic times, and they're taking a toll on the travel industry. Icelandic-owned and Denmark-based Nordic budget airline Sterling announced today that it will file for bankruptcy, halting all of its aircraft. The slowdown of the travel market and rising oil prices put financial strains on the airline a year ago, but now with the fall of the Icelandic economy, and hence the funds of the airline's owner, Sterling had no choice but to call it quits.

And although things are obviously bad for the airline, things aren't any better for its passengers: the halting of flights has left thousands of them stranded at airports across Europe. Sterling announced that tickets purchased online at the Sterling website would not be refunded, nor would return flights be honored. Coming to the rescue, rival airline Scandinavian Airlines announced that it would offer Sterling passengers and crew members seats on its flights to Copenhagen, depending on availability. But that will only help a small handful; all in all, an estimated 40,000 customers are said to be affected by the bankruptcy.

A lot of foreigners are taking advantage of the ridiculously depreciated Icelandic krona and flying there this winter. Which is a bit weird because it's Iceland. And winter.

As one Icelandic native said to me, "The nation is surviving right now on foreign journalists and tourists."

I'm in the middle of figuring out the logistics of my trip. My top priority is booking a rental car and hopefully making it around the 800 or so mile of the ring road, an epic journey that will take me all the way around the island. Alas, here's what the local guru had to say about my foolhardy idea:

Unless you're an extremely skilled winter driver, I highly, highly discourage you from driving the Ring Road in late Nov. Roads aren't salted and though even the rental cars have studded tires, the conditions are freakishly scary and just not something an utlengur (foreigner) should be doing. Even the road between Keflavik (the airport) and Reykjavik can be treacherous. Take my word on this... not a good idea. Also, late November is really dark. You'll have only a few hours of light a day, which makes conditions even worse and not good for a travel piece.

This week Gadling picked up another blogger Mike Barish who considers Lunchables unusual food.

When I browsed the week's offerings, money popped out as one of the prevailing themes. With the stock markets doing a roller coaster act, forgetting that the ups give riders a reprieve, it's no wonder.

• Scott's post on American Airlines possible plan to do àla carte pricing offers great suggestions for getting the most umph out of the dollars you fork over for flying.
• In another managing your travel money venture, Grant outlined how a person can take a short cut to Gold status for Hilton Hotels. Gold status offers more perks and deals.
• When it comes to traveling in Europe, Jeffery delved into how the current financial crisis might be making European jaunts a cheaper venture for Americans. Considering that I'm heading to Denmark in December, that's happy news.
• Aaron wondered just how rich he is and found out that he's the 730 millionth richest person in the world. His post points out how you can find out your own financial standing in the world. Perhaps the news will give you the feeling that you can afford at least a mini vacation to the next town over.
• And to round it off, although there is more, Jerry is on the quest for cheap travel in Iceland. He's already scored a $400 RT ticket. Not bad, Jerry.

Also, for anyone who is looking for some Gadling glory, check out our series Catching the Travel Bug. We're looking for your stories and will publish our reader submitted favorites.

So I just took advantage of Grant's tipoff last week to $400 roundtrip airfare to Iceland. I'm flying out of Boston the weekend before Thanksgiving, and staying for a week. And I believe my flight came out to something like $550, not bad at all for a departure on Saturday and return on Sunday.

Now I'm trying to scoop up some dirt-cheap hotel rooms, a rental car, and hmm, maybe a mid-sized bank somewhere. Yes, I do feel a bit awkward just parachuting into a country that's, according to news today, running out of food in 3-5 weeks.

It's a beautiful country, but I'm almost more excited to go walk down Main Street and just see what a "bankrupt" country is like, in the dead of winter no less. I mean, when does that ever happen? Or did I just speak too soon.

On a related note, I'm working on a research paper about Iceland's economic collapse, and it's somewhat humorous to read the predictions made by distinguished economists from just a couple years back. Take this one from 2006, posted on the Icelandic consulate's website:

"Recent volatility in Iceland's asset markets has raised concerns about the fragility of Iceland's economy," comment Frederic S. Mishkin and his co-author Tryggvi T. Herberrtsson in their report, "Financial Stability in Iceland." But these concerns, particularly those that raise comparisons with certain financial issues in emerging market countries, are "misguided."

Ha! Oh, that reminds me. I have to go get a visa from that consulate ... whoops.

With the financial sector steadily imploding, Iceland is in a bit of trouble. As Aaron wrote about earlier this week, much of the Atlantic island's economy was built upon credit and finance, and now that those industries are failing, the country needs extra income to keep up its highbrow status.

And where else can you quickly reap foreign investment but in tourism? Iceland Air, long one of the premium transatlantic carriers (if you want to stop in Reykjavik) is leading the charge to get American dollars by offering some killer fares to the North Atlantic this winter. Book by October 21st and you can get cheap round trip tickets from New York or Boston to the Icelandic capital for only $400 plus tax.

Add the fact that the dollar is suddenly making a killing in Iceland (as of this morning, 222 Krona to 1 dollar, from 80Krona a couple of weeks ago), and you could have a pretty nice inexpensive vacation on your hands.

Check out Icelandair's website for further details on the deal, and while you're in town make sure to check out the ice ring road, blue lagoon (pictured) and drink with some vikings.

Considering Iceland's location and climate, perhaps it's no surprise that the country's credit markets are in a deep freeze. During the "boom years" of the '90s, Iceland became one of the richest countries in the world per capita, thanks to economic reform, a booming stock market, and an increased demand for the fish off its coasts.

But as the Guardian points out, "Iceland built its extraordinary wealth on the crest of the worldwide credit boom and now the crunch is sweeping it away, bankrupting a people for whom the past eight years have been, for most of them and by their own admission, one long party."

Iceland's currency is plunging towards the center of the Earth-- almost as weak as the currencies of Zimbabwe and Turkmenistan-- and supermarkets are having trouble paying for more food to be imported.

All of this is obviously terrible news for Icelanders, but travelers might find some unbelievable deals if they want to visit any time soon. Not only that, you'd be helping out the locals by providing some much-needed foreign investment.

More here.

(Photo via ContemplationDC)