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Yes, it's possible, though since Macs don't have USB3, you'd only get USB2 speeds which would make things pretty slow. Ideally you need Thunderbolt which will work out more expensive.
 
Yeah, don't bother with an SSD if you're using USB 2. If you're going to pay for the SSD, you might as well get a thunderbolt enclosure.

But yes, to answer your question, you can in fact boot from an external drive.
 
Do the newer Macs have USB3? Would it be fast now even if you booted from external drive?
 
Do the newer Macs have USB3? Would it be fast now even if you booted from external drive?

All new Macs have USB3, but it would probably still be better to use a Thunderbolt SSD (like the Elgato or Lacie) instead of USB3, or just get a new Mac mini or iMac with the Fusion Drive.

I've actually been running my late 2009 i7 iMac off of an external FW800 SSD for the better part of three years. Since FW800 isn't as fast as SATA, you'd think it wouldn't work well, but the latency/seek time benefits outweigh the burst transfer speed to make the system more responsive than when booted off of the internal WD 7200rpm drive.
 
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