For a long time, abundant natural resources brought Iceland a high and volatile real exchange rate with adverse effects on manufacturing and services. During 2003During -2008, another national treasure, the sovereign's AAA rating, was used by privatized banks to attract foreign capital, elevating the real exchange rate even further. The financial collapse and the associated collapse of the currency in 2008 left the country with a large foreign debt which offset some of the effect of the natural resources on the real exchange rate. In effect, this was the Dutch disease in reverse as witnessed, in particular, by a massive increase in the number of tourists following the financial collapse. This paper discusses the behavior of the exchange rate of the Icelandic króna before and after 2008 as well as its relationship to natural resources, capital flows, output, exports and imports, including tourism. JEL-Codes: F410, O230, O330. Rarely does the opportunity arise for economists to revisit their theories using data from natural experiments. The recent economic history of Iceland offers such an opportunity. We refer to the literature, relaunched by Sachs and Warner (1995), on various aspects of the potentially adverse effects of natural resource discoveries on employment and investment as well as on economic growth. The inverse cross-country relationship between natural resources and growth has been broadly confirmed in several studies 1 while questioned by others. 2 The literature on the macroeconomic consequences of natural resources highlights several channels through which economic growth can be retarded. These include rent seeking, 3 the Dutch disease, 4 poor governance, 5 political or ethnic conflict, 6 corruption, 7 autocracy, 8 excessive borrowing 9 and low levels of education. 10 Ross (2011), van der Ploeg (2011), Frankel (2014) and Venables (2016) survey the literature.If learning-by-doing occurs mostly in the secondary (i.e., manufacturing and services) export sector and not in the primary (i.e., natural-resource-based) sector, a large and volatile primary sector will adversely affect the production of tradable goods by increasing real wages and the real exchange rate, lowering the relative price of tradable goods (i.e., exports and import-competing goods) and hampering employment, investment and growth. 11 Insofar as the trouble with abundant natural resources has to do with the real appreciation of the currency, the depreciation resulting from the sudden stop of a capital inflow and a financial crash can be viewed as a bout of the Dutch disease in reverse.