WND column

The Dire Sign of Dubai

In 2007, the international financial elite knew very well that there were serious problems with the world’s largest banks. Perfectly good loans were being called, long-standing corporate relationships were being cast aside for short-term benefit and there was a palpable perception of something wicked on its way. While news of the so-called credit crunch was duly reported by all the major newspapers, few outside the financial world had any idea that consequences such as the meltdown of 2008 were rapidly approaching.

But if you knew what to look for, it was fairly obvious that something big and ugly was developing, which was why I wrote that “the United States was fast approaching an interesting juncture” in my WND column published March 24, 2008. In a similar manner, what appears to be the minor matter of a Dubai-based corporation requesting a six-month moratorium on its debt payments looks very much like a warning that the next stage in the global financial crisis will be upon us soon.

UPDATE – Karl Denninger notes the irony of an Arab government being more free market-oriented than the USA:

Dubai’s government said it hasn’t guaranteed the debt of Dubai World, the state-controlled holding company struggling with $59 billion in liabilities, and that creditors must help it restructure.

“The company received financing based on its project schedule, not a government guarantee,” Abdulrahman Al Saleh, director general of the emirate’s Department of Finance, said in an interview with Dubai TV, when asked whether the government was backing the debt. “Lenders should bear part of the responsibility.”