Monday: Watch Dubai and the international response closely.
By Daniel at 28 November, 2009, 3:56 pm
Dubai is one of the seven emirates of the UAE. It is a monarchy and has been ruled by the Al Maktoum family since 1833. The source of it’s wealth is primarily finance and banking. What little oil it has is almost depleted. Over the past decade Dubai’s spending has been profligate to the point of being obscene. The question now is; will the Monarchy and elite of Dubai be bailed out by Abu Dhabi and/or the west or will they be allowed to suffer the consequences of their folly?
Behind the facade of “recovery” there is a slow motion and inexorable economic collapse taking place. Countries are failing, municipalities and states in this country are failing, serious problems are being masked by “better than expected”, and around the globe governments are spending money they don’t have and lying about debt that cannot be paid. Dubai is the tip of the iceburg. They are bigger than Iceland, but much smaller than China. Who will be next and how will it be explained?
Watch Dubai and the international response closely because the actions and results will tell an interesting story. A big save by the west is probably an indication that there is a great fear that letting Dubai fall will cause financial and political repercussions. If Abu Dhabi doesn’t intercede, it may be an indication that with lower demand for oil and falling oil prices, along with poor investment returns, the Arabs may be afraid for their own finances.
Stay tuned.
- cynicalguy
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