Unfortunately for Icelanders, that included a plethora of highly leveraged deals made at the top of the market, much of it in foreign real estate. Unlike the U.S., the island nation of 300,000 had no strong federal safety net to save it when everything came crashing down. The country's stock market is off 95% over the past 12 months.
That's bad news for Iceland, but great news for American travelers, whose dollars are worth 60% more in Iceland than they were a year ago.
"The economic collapse has brought hardship on many people," says Urdur Gunnarsdóttir, spokeswoman for Iceland's Ministry for Foreign Affairs. "But it has made life much easier for tourists, that's for sure."
Though peak nonstop fares from New York to Reykjavik exceed $1,000, midweek fares are often available for less than $600. Once in Iceland's capital, a beer in a swanky downtown bar is about $5; a posh hotel room can be had for $80 or so. It's not exactly cheap, but the dollar goes twice as far in Reykjavik as it does in Europe's cosmopolitan capitals like London and Moscow.
Keep taking discount vacations, and you might just be able to save up enough for an extreme vacation in Sierra Leone, which doesn't make our list but will certainly be affordable--though far from luxurious--upon arrival.
Better yet, you could pack your bags for Fiji--for good.
"It's a really good buy," says De Domenico of his 800-acre, $35 million island. "People pay that much for a condo in Manhattan."