Lets see what happens before predicting the apocalypse again but here is the story off the Guardian.
“The crisis in Dubai has brought up speculation about how many more skeletons might be left in the cupboard,” said Richard McGuire, a strategist at Royal Bank of Canada in London.
Graham Turner, of consultancy GFC Economics, said: “It gives you a picture of the fact that credit problem persists, despite everything that’s been done.”
Governments have cut interest rates, created new electronic money and allowed budget deficits to reach record levels in an attempt to boost growth after the near-collapse of the global financial system, but Turner said the problems in Dubai were indicative of widespread malaise. “Despite having oil, it’s still the case that many of these countries had explosive credit growth. It’s very clear that in 2010, we’ve got plenty more problems in store.”Investors had recently begun to recover appetite for high-risk, high-return assets, showing more confidence in the global economy, including emerging markets. Stocks and bonds had rallied since March, with the FTSE – which dropped by more than 3% today – showing a gain of 50%.
“The crisis in Dubai has brought up speculation about how many more skeletons might be left in the cupboard,” said Richard McGuire, a strategist at Royal Bank of Canada in London.
Graham Turner, of consultancy GFC Economics, said: “It gives you a picture of the fact that credit problem persists, despite everything that’s been done.”
Governments have cut interest rates, created new electronic money and allowed budget deficits to reach record levels in an attempt to boost growth after the near-collapse of the global financial system, but Turner said the problems in Dubai were indicative of widespread malaise. “Despite having oil, it’s still the case that many of these countries had explosive credit growth. It’s very clear that in 2010, we’ve got plenty more problems in store.”Investors had recently begun to recover appetite for high-risk, high-return assets, showing more confidence in the global economy, including emerging markets. Stocks and bonds had rallied since March, with the FTSE – which dropped by more than 3% today – showing a gain of 50%.
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- Observer: Financial hurricanes shake the tax havens
- So What Happened After The Big Message Was Sent To The World With The IceSave “No” Vote?
Vilhjalm A.
2 years ago
It’s fairly obvious that the worldwide “recovery” (mainly in stock markets) has been fueled by massive amounts of liquidity (i.e. printed money) injected into the money supply and capital markets, and by accounting tricks and government assumption of private debt. This has been a “bailout bubble”, and like the rest of the bubbles it too will pop and the world will plunge back into depression. When? That’s not clear – it could come next year, or in several years (I suspect that governments will turn to desperate measures to try to prevent this, such as artificially fixing the Dow stock market at 12000). The problem is there is simply too much debt and no one to buy it all. Right now governments like the US and UK are financing their debt by issuing government bonds, but they are facing increasing difficulty in finding anyone (like China, India or Russia) to buy their paper IOUs.
This debt crisis will probably not end until all the major countries of the world devaluate their currencies at once, or cause massive inflation. The effect of this would be to confiscate (ie steal) the savings of ordinary working people to cover government debt. Or governments will simply default on their national bonds and refuse to pay.
Is Dubai’s culture of excess too good to last? « BBC World Have Your Say
2 years ago
[...] plunging work markets into mayhem. Are we about to embark on global financial crisis ’round two’? And after decades of lavish living, is it time to say bye bye to [...]
Spread betting
2 years ago
Now could be the time begin trading gold. Gold prices are continuing to soar to new highs as the Chinese government attempt to stock pile the precious metal.
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