In the third of her four-part retrospective series, Martha Harris Myron reflects on events of significant economic impact that she has chronicled. Next week, she will sign off after 25 years as the author of the Moneywise column.

At the beginning of the new millennium, Bermuda's people were about to embark on a decade of dramatic events, unprecedented for this small island community.

Bermuda was evolving rapidly from a closed economy where pulling money out of Bermuda was enforced swiftly and punitively. Even so, some sailed away in the stealth of night, leaving large, untidy debts and unpaid employees.

New digital ways of doing business exploded, especially in shopping and investing. Barriers to international business ownership were falling rapidly, with more access to world capital markets. And there was heightened collaboration with global taxing authorities, the US Internal Revenue Service (IRS) predominant among them, with the launch of the Qualified Intermediary Programme.

On January 1, 2000, the Bermuda National Pension Scheme became fully operative as the private working population community was challenged with decisions on investment choices, risk profile preferences, complex mutual fund structures, etc.

Choices were often an enigma to so many who had never had the opportunity, or the cash flows to be exposed to the investment world. Our community had to consider graduating from the comfort of fixed deposits to the vagaries of ever-fluctuating capital-market valuations.

Given the steep learning curve, pension plan providers did their best to assist employees in appropriate pension plan choices, but investing knowledge cannot be grasped overnight.

“I thought the fund rate of return was guaranteed” or “I didn't know what to pick so I just chose one” were often heard.

Three months later, the US dot-com bubble burst, eviscerating those unsustainable 80 per cent returns (with no corporate profits) and more. The working community had barely signed on to the new pension, only to witness loss of wage capital.

In 2001, the United States tragedy of 911 struck right home on island, too, while when the US immediately closed air and sea lanes access for more than six days, Bermudian survivalists all stepped up to the challenge of hosting 6,000 stranded air passengers while grieving the horrific loss of our own people and hundreds of associated working colleagues.

Who can forget wondering if the New York Stock Exchange could reopen to a semblance of normalcy?

At that sad time, I remember Brian Duperreault, former CEO of Ace Group, eloquently stating that Bermuda insurers would provide immediate payment of claims to parties insured, and that Ace Insurance had established a $5 million fund for the families of 911 victims.

For the Ace Group, in 2001, losses for 911 alone exceeded $550 million. Fortuitously, the tragedy engendered new attention to Bermuda’s insurance landscape with more than $10 billion in capital and six big new companies established and writing business by January 2002.

In 2003, the Bank of Bermuda was sold to an outside financial entity, thereby eliminating the 60:40 rule for ever, while the concentration of risk in the remaining publicly-traded local Bermuda shares increased dramatically.

All Bank of Bermuda shares were automatically redeemed in US dollars, an estimated $1.5 billion, generating the greatest immediate infusion of personal and corporate individual cash in Bermuda’s history.

Not everyone was happy about this decision as we witnessed a grown man have a radical “temper tantrum” railing against employees, the bank, the Government, everyone.

Salaciously, too, the register list of all shareholders and their holdings was published, electing fury at invasion of privacy.

Once again, it was very apparent that investing in publicly-traded companies was not well understood.

As this enormous sum of immediate cash flowed through the Bermuda economy, the Bermuda Bakery closed its doors, losing for ever the memory I had as a child going to school enveloped in the wonderful smell of baking bread.

The Bermuda real estate market overheated precipitously over the next four years.

Individuals and companies escalated property prices in soaring bidding wars. Everyone was borrowing ready cash, frantically building, or thinking of building, rental homes with high annual rental values.

Government spending increased dramatically, leveraged by increasing bond issues.

In 2007, the traditional trust in Britain’s London Interbank Offered Rate (Libor) evaporated, while the trading of commercial paper (a necessary asset in corporate money market funds) froze in August.

In 2008, intermingled with the Bernie Madoff ponzi scam, the United States’ sub-prime mortgage market calamitously melted down, and the world went into a severe global recession.

Bermuda felt for the first time and for a long time – the effects of this severe market recession. Almost instantly, the high-end Bermuda rental market collapsed and with it, even regular homeowners with mortgages were to learn about negative equity for the first time, much to their total dismay.

The exodus of more than 8,000 residents began along with increasing local redundancies.

It was the end of an era of low government debt, budget surpluses, low unemployment with the individual ability to work three jobs, or find another position a day after quitting an disliked job.

The Front Street retail flagships disappeared over time, along with the traditional horse and carriage and welcoming tourist activity.

As the Bermuda recession dragged on, with the usual inflationary cost-of-living increases, I invited the late Larry Burchall, of Nanci the Spider fame and a brilliant journalist who understood the Bermuda economy better than anyone, to lunch. We both were concerned about the recession and its long-term impact on the community. I asked him what his thoughts were for the future.

His answer: “Bermudians will survive this latest setback, they will get by, but the recovery will not return to the lifestyle they have been accustomed to.”

Predictive words indeed.

The future lies ahead. For a brief moment (25 years) in Bermuda’s 400-plus-year history, I have had the privilege of documenting and writing about it in financial terms. My thanks to all of you — readers, critics and supporters.

• Martha Harris Myron is a 25-year columnist contributor to the Moneywise column and author of Bermuda Bermy Finance Blog at www.marthamyron.com. Contact: martha.Myron@gmail.com