When debt-stricken Dubai got a desperately needed $10 billion from neighbouring Abu Dhabi on Monday, the financial world breathed a collective sign of relief. However, the whole world's growth is built on a debt bubble which is about to pop. Dubai is a tiny bubble by comparison. The other large debt bubbles are in China - which hedge fund manager Jim Chanos calls "Dubai times 1,000" - and in government debt. The China bubble and the U.S. Treasury bond bubble are what we should be worried about now.
In the meantime, there has been some "collateral damage" in Dubai as illustrated. So, building ski slopes in the desert wasn't such a good idea? What next? Back to exporting egg-timers?
